Wipe Out Debt: Gain Clarity on Debts You Can Eliminate with Wisconsin Bankruptcy
Dealing with overwhelming debt can feel like an insurmountable challenge. The constant calls from creditors, the stress of unpaid bills, and the fear of losing your assets can take a toll on your well-being. In times like these, understanding which debts can be wiped out through bankruptcy becomes crucial.
Bankruptcy offers a path to financial relief, allowing you to start fresh and regain control of your life. However, not all debts are dischargeable in bankruptcy, and it’s essential to be aware of the types of debts that can and cannot be eliminated. In this guide, we’ll explore the debts you can wipe out with bankruptcy, providing you with clarity on your journey to financial freedom.
Wipe Out Debt: Dischargeable Debts in Bankruptcy
When you file for bankruptcy, whether it’s under Chapter 7 or Chapter 13 in Wisconsin, certain debts can be eliminated, providing you with significant relief. Here are the types of debts that are typically dischargeable:
Wipe Out Debt: Credit Card Debt
If you’re drowning in credit card debt, bankruptcy can provide a lifeline. Credit card balances are generally dischargeable, allowing you to wipe out these high-interest obligations.
Wipe Out Debt: Medical Bills
Medical expenses can quickly accumulate, especially in the face of unexpected illnesses or accidents. Bankruptcy can help you eliminate medical bills, giving you a fresh start for your health and finances.
Wipe Out Debt: Personal Loans
Whether it’s a personal loan from a bank or an unsecured personal loan, bankruptcy can often wipe out these debts, freeing you from the burden of repayment.
Wipe Out Debt: Utility Bills
Past-due utility bills, such as electricity, water, or gas, can also be discharged through bankruptcy, ensuring you have a clean slate to restart your financial life.
Wipe out Debt: Collection Agency Debts
Debts that have been sold to collection agencies are typically dischargeable. These agencies purchase debts for a fraction of the original amount, and bankruptcy can relieve you of the full obligation.
Non-Dischargeable Debts in Wisconsin
While bankruptcy offers significant relief, there are certain debts that cannot be wiped out regardless of whether you file for Chapter 7 or Chapter 13 in Wisconsin. It’s crucial to be aware of these non-dischargeable debts:
Back Child Support and Alimony
Family support obligations, including back child support and alimony, cannot be discharged. You remain responsible for fulfilling these financial commitments.
Debts Resulting from Driving Under the Influence
If you have debts related to personal injury or death caused by driving while intoxicated, they are non-dischargeable, emphasizing the importance of responsible behavior.
Student Loans
Student loans are generally non-dischargeable, unless you can demonstrate an undue hardship, which is a challenging standard to meet.
Legal Fines and Penalties
Debts arising from violating the law, such as traffic tickets and criminal restitution, cannot be discharged through bankruptcy.
Recent Income Tax Debts
Income tax debts incurred within the last three years are non-dischargeable. Other tax debts are also typically not dischargeable.
Unlisted Debts
If you forget to include a debt in your bankruptcy paperwork, it may not be discharged unless the creditor becomes aware of your bankruptcy case.
Potentially Non-Dischargeable Debts
In some cases, a bankruptcy judge in Chapter 7 may declare certain debts as non-dischargeable if the creditor challenges your request. These debts include:
Fraudulent Debts
Debts incurred through fraud can be deemed non-dischargeable if the creditor proves the fraudulent intent.
Luxury Purchases
Credit purchases of $1,150 or more for luxury goods or services made within 60 days of filing may be non-dischargeable.
Cash Advances
Loans or cash advances of $1,150 or more taken within 60 days of filing could be declared non-dischargeable.
Willful or Malicious Injury
Debts resulting from willful or malicious injury to another person or their property may not be dischargeable.
Embezzlement, Larceny, or Breach of Trust
Debts stemming from embezzlement, larceny, or breach of trust are typically not dischargeable.
Divorce-Related Debts
Debts owed under a divorce decree or settlement may be non-dischargeable unless certain conditions are met.
Understanding which debts can be discharged and which cannot is essential when considering bankruptcy as a debt relief option. It’s crucial to consult with experienced professionals, like the attorneys at Dahlberg Law Group, who can provide guidance tailored to your unique situation.
Want to Wipe Out Debts? Contact Us Today!
If you’re struggling with debt and seeking clarity on whether bankruptcy is the right solution for you, don’t hesitate to reach out to the experts at Dahlberg Law Group. Our experienced attorneys, including Attorney Steve Eichsteadt, can provide you with the guidance you need to make informed decisions about your financial future and how to wipe out debt. Contact us today to take the first step toward wiping out debt and gaining the fresh start you deserve at (262) 677-8999.
Frequently Asked Questions to Wipe Out Debts
- Can bankruptcy wipe out debts of any kind? Bankruptcy can eliminate many types of unsecured debts, including credit card debt, medical bills, and personal loans. However, certain debts, such as child support, alimony, and recent tax debts, are generally non-dischargeable.
- What is the difference between Chapter 7 and Chapter 13 bankruptcy in Wisconsin? Is there a difference about how much each wipe out debt? Chapter 7 bankruptcy typically involves the liquidation of assets to pay off debts, while Chapter 13 bankruptcy involves creating a repayment plan to gradually pay off debts. The specifics of each case can vary, so it’s essential to consult with an attorney to determine the best option for you.
- How long does bankruptcy stay on my credit report? Bankruptcy can remain on your credit report for up to ten years. However, you can begin rebuilding your credit immediately by practicing responsible financial habits.
- What is considered an “undue hardship” for discharging student loans in bankruptcy? Proving an undue hardship for discharging student loans in bankruptcy can be challenging and typically requires demonstrating that you cannot maintain a minimal standard of living while repaying the loans. It’s advisable to consult with an attorney for guidance on this matter.
For additional information and step-by-step guidance on the bankruptcy process in Wisconsin, please visit the Wisconsin Bankruptcy FAQs and explore the available forms for download.
