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We all fall on hard times, and some of those hard times are inevitably harder than others. For some, the solution may just be bankruptcy. There are generally two types of bankruptcy that individuals seek and those include Chapter 13—which allows you to restructure your debt in a way that it can be paid—and Chapter 7—which will wipe out a majority of your debt. If the latter is the route you are considering, you may wonder, can you file Chapter 7 and Keep Your House in Wisconsin? Kingstad Law is here to help you find those answers.
Can You File Chapter 13 and Keep Your House in Wisconsin?
Before we talk about Chapter 7, it may be helpful to discuss Chapter 13 quickly. In short, Chapter 13 bankruptcy allows you to keep all of your property in Wisconsin. For most, Chapter 13 will be more difficult in the short run, but better for you in the long run. If Chapter 7 is where you need to be, then we will have to start talking about exemptions.
Read More: What Are the Benefits of Filing for Bankruptcy?
What Are Chapter 7 Bankruptcy Exemptions?
When you file for Chapter 7 bankruptcy, most of your assets are assigned to a trustee who will then use those assets to try to pay as much of your debt as possible. Yes, this means they will be selling those assets, and this sticking point means that you may lose assets. However, some assets can be exempt from bankruptcy. These exemptions are going to be key during your bankruptcy and this is why you really want a lawyer’s help during the process.
Is Your Home Exempt During a Chapter 7 Bankruptcy
Whether or not your home is entirely exempt actually depends on two things. The value of the equity you have in your home and whether you are using Wisconsin exemptions or federal exemptions. Wisconsin is one of 20 states that allows you to choose whether to use Wisconsin bankruptcy exemptions or federal bankruptcy exemptions. Let’s take a look at the differences.
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Difference Between Wisconsin and Federal Bankruptcy Exemptions
There are a lot of differences between the Wisconsin and federal bankruptcy exemptions, and no clear winner between the two. A lawyer can help you navigate both sets of exemptions to determine which will be best for you. This is important because you cannot mix and match state and federal exemptions. You are either going by the state exemptions for the entirety of your bankruptcy or the federal ones.
In terms of the house, or homestead exemptions specifically. Both federal and state exemptions require that the home be your primary residence. Federal law provides $40,000 worth of equity exemptions and Wisconsin state law provides $75,000 of exemptions. Talk with the lawyers at Kingstad Law in Greenfield, Wisconsin to learn which exemptions will benefit you the most.
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