Don’t get trapped by years and years of making minimum payments. Don’t get scammed by a debt relief agency that makes empty promises. Ensure that you obtain different points of view from legitimate sources. One way to check your source is to make sure they are a highly rated member of the Wisconsin Better Business Bureau. Reputable and experienced bankruptcy attorneys can provide both bankruptcy and non-bankruptcy options to get your finances back on track. In addition, most bankruptcy law firms offer a free initial consultation. Understanding the meaning behind some common bankruptcy terms would be excellent preparation for your first meeting with an attorney.
Debtor: The person or entity seeking protection from creditors under the bankruptcy laws.
Creditor – a person to whom or business to which the debtor owes money or that claims to be owed money by the debtor.
Chapter 7: “Liquidation” or “complete” bankruptcy to discharge credit card and other debts in a process that takes approximately 4-5 months. Chapter 7 leaves you debt free and, in most cases, able to keep your property.
Chapter 13: Bankruptcy allows a debtor to keep property and pay debts over time, typically 3-5 years.
Automatic stay: Suspension of actions, such as debt collection or foreclosure. This occurs automatically when a bankruptcy petition is filed.
Exempt property: Property owned by a debtor that the Bankruptcy Code or WI state law permits the debtor to keep from unsecured creditors, depending upon the state the debtor resides in.
Liquidation: The dissolution of a company, or individual. Typically operations cease and assets are sold by auction; Chapter 7 is usually employed for liquidations, businesses or individuals.
Means test: A method for determining whether someone qualifies for a financial-assistance program. A common means test is the one used to determine eligibility for Chapter 7 bankruptcy.
Secured debts – debts backed by a pledge of collateral mortgage, or other lien. It is debt for which the creditor has the right to pursue specific pledged property upon default.
Unsecured debts are not secured by your property. If you default, the creditor cannot take anything of yours without first obtaining a money judgment against you in court. (Ex: Medical bills, student loans, rent, utility payments, etc.)
Dischargeable debt : Debt for which the bankruptcy code allows the debtor’s personal liability to be eliminated.
*Debt Advisors Law Offices has a reputation across Wisconsin as reputable and experienced bankruptcy attorneys. Get honest answers and solutions for real financial problems.