Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
People hear plenty of things about bankruptcy that simply aren’t true. You may have heard that you will lose everything, ruin your credit forever, or never be able to file again.
This guide looks at some of the most common bankruptcy myths and explains what actually happens. We’ll cover your credit, your property, filing again after a previous case, debts that may remain, and how long the bankruptcy process can take.
Bankruptcy will affect your credit. But it does not mean your credit is ruined forever. The Consumer Financial Protection Bureau says Chapter 7 can stay on your credit report for up to 10 years. Chapter 13 can stay for up to seven years. Older negative information usually has less impact on your credit than newer information.
You can still work on your credit after bankruptcy. Paying bills on time, keeping new debt under control, and checking your credit reports for errors can help.
Bankruptcy may stay on your credit report for years, but its effect on your credit can change over time.
This is one of the biggest fears people have about bankruptcy. Filing does not mean you have to give up everything you own.
Bankruptcy exemptions can protect some of your property. In Wisconsin, they may cover part of the value of your home, car, household items, bank accounts, retirement funds, and other property.
What happens also depends on the type of bankruptcy. In Chapter 7 , the trustee may sell unprotected property if there is money left for creditors. With Chapter 13 , you usually keep your property while making payments under your repayment plan.
The important thing is to report all of your property and use the exemptions available to you. Do not leave something off your bankruptcy papers because you are worried about losing it.
There is no rule that says you can file bankruptcy only once in your life. The important question is whether you received a discharge in an earlier case and how much time has passed. The waiting period depends on the chapters involved.
| Earlier Discharge | Later Case | General Wait for Another Discharge |
| Chapter 7 | Chapter 7 | 8 years |
| Chapter 7 | Chapter 13 | 4 years |
| Chapter 13 | Chapter 13 | 2 years |
| Chapter 13 | Chapter 7 | 6 years, with exceptions |
These periods are generally measured from the filing date of the first case to the filing date of the later case. A Chapter 13-to-Chapter 7 case can have exceptions when enough unsecured debt was paid through the earlier plan.
These time limits mainly affect when you can get another discharge. They do not mean you can never file bankruptcy again.
If you have filed before, a bankruptcy attorney should review your earlier case before you file again.
Bankruptcy can get rid of many debts, but not all of them. Credit cards, medical bills, and many personal loans can often be discharged. Some debts, however, can still remain after bankruptcy.
These may include:
The U.S. Courts’ explanation of bankruptcy discharge explains that which debts are discharged depends on the type of debt and the bankruptcy case.
Student loans are not always excluded. In some cases, you can ask the bankruptcy court to discharge them if repaying the debt would cause undue hardship. The Department of Justice student loan process explains how federal student loan cases are reviewed.
Tax debt also depends on the situation. Some tax debts can be discharged, while others cannot.
Filing for bankruptcy involves paperwork, financial records, deadlines, and a meeting with the trustee. But most cases do not turn into a long court battle.
A typical Chapter 7 case may be completed in about four months if there are no objections or other issues. Chapter 13 takes longer because the repayment plan usually lasts three to five years.
You will also usually attend a 341 meeting of creditors. The trustee asks about your bankruptcy papers, debts, property, and finances. Creditors can attend, but this is not a trial.
Some cases take longer or become more difficult. This can happen with property disputes, missing information, creditor objections, or other legal issues. The Wisconsin bankruptcy filing process can vary based on the details of your case.
Start with your own finances instead of relying on what you have heard about bankruptcy. Make a list of your debts, income, monthly expenses, bank accounts, property, loans, and recent financial activity.
If you filed bankruptcy before, find the date of your earlier case and your discharge information. If you are considering Chapter 7, your income and the means test may matter. If you are considering Chapter 13, you need enough income to make the proposed plan payments.
Possibly. It depends on your home equity, mortgages and liens, available exemptions, and the type of bankruptcy you file.
Yes. Bankruptcy does not permanently stop you from getting credit. Approval, interest rates, and loan terms depend on your credit history, income, debts, and the lender.
Yes, in some cases. You generally need to ask the bankruptcy court to decide whether paying the debt would cause undue hardship.
Possibly. A previous bankruptcy or discharge can affect when you can receive another discharge. The rules depend on the two bankruptcy chapters involved.
Bankruptcy has rules, limits, and protections. What happens in your case depends on your debts, income, property, and past filings.
Our attorneys at Debt Advisors Law Offices can review your situation and explain what Chapter 7 or Chapter 13 could mean for you.
Have questions about bankruptcy? Schedule a consultation with our attorneys today.
Learn about bankruptcy protections, types of bankruptcy, how to get started, what to expect, and who to trust. Filing bankruptcy is the ONLY way to completely eliminate debt. If bankruptcy is right for you, it offers powerful protections that cannot be achieved through alternative solutions such as hardship relief, loans, or debt settlement.
