Q: I'm worried about my credit. How will a Chapter 7 bankruptcy affect my credit score?
A: Recently, Fair Isaac Corporation, the company that developed the FICO credit score, released the following estimates of credit score declines associated with several financial events (the low end of each range reflects the impact on the credit score of a hypothetical consumer with average credit, while the high end relates to that of a consumer with very good credit):
Payment 30 days late: 40 - 110 points
Payment 90 days late: 70 - 135 points
Foreclosure, short sale or deed-in-lieu: 85 - 160 points
Bankruptcy: 130 - 240 points
As these numbers demonstrate, if you're late on your bills, your credit score has already taken a serious hit, regardless of whether you've sought relief from your debts through a Chapter 7 bankruptcy.
Q: How about the impact to my credit from a Wisconsin Chapter 128 debt repayment plan?
A: Although Fair Isaac did not release data relating to Wisconsin Chapter 128 debt repayment plans (probably because Wisconsin is the only state that effectively offers this type of relief), various commentators believe that such plans are less damaging to credit scores than bankruptcy, and may actually begin to improve the credit of certain borrowers as their debts are repaid through the plan over time.
Q: Will I ever be able to get credit again after I file for Chapter 7 bankruptcy?
A: Typically, yes. While a Chapter 7 bankruptcy will remain on your credit report for 10 years, if you are prudent with your money after filing and begin paying your bills on time again, your credit score should start to improve. Some individuals have been able to purchase homes within a few years of filing Chapter 7 bankruptcy, and there are lenders who will even loan you money towards the purchase of a vehicle during a Chapter 7 bankruptcy. That being said, whenever possible, Attorney DeMoon encourages his clients to stay off the treadmill of credit and debt after they receive their fresh starts though Chapter 7 bankruptcy.
Q: What is the difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy?
A: There are a number of differences, but one of the most important is that if you qualify, a Chapter 7 bankruptcy can provide for a complete discharge of certain debts (although you may have to give up some of your property), whereas a Chapter 13 bankruptcy would require you to enter into a plan to pay back part of your debt over three to five years (but allow you to keep all of your property). There are benefits and disadvantages to each.
Q: Why don't you currently handle Chapter 13 bankruptcy cases?
A: Although Chapter 13 bankruptcy can be a great option (and sometimes the only one) for some individuals, it has been estimated that nationwide, roughly 2 out of every 3 Chapter 13 repayment plans fail, often leaving the debtor to eventually file for Chapter 7, anyway (if they qualify). If you think about it, a lot can happen over the course of the 3 to 5 years that it takes to complete a Chapter 13 repayment plan: job loss, divorce, etc. Attorney DeMoon prefers to keep his practice simple and straightforward by handling only Chapter 7 bankruptcies; if he accepts your case, and your money, he wants to make sure you actually receive the debt relief that you expected. If Chapter 13 is your only option, however, Attorney DeMoon will gladly refer you to another trusted attorney who does accept Chapter 13 clients.
Q: What kinds of debts are discharged/not discharged in a Chapter 7 bankruptcy?
A: Examples of the types of debt a Chapter 7 bankruptcy can eliminate include most credit card debt, medical bills, lawsuit judgments, back rent and utilities, and obligations under promissory notes. Examples of debts that survive a Chapter 7 bankruptcy include child support and maintenance obligations, debts owed to a spouse, former spouse or child, fines, penalties, restitution, court fees, certain tax debts, drunk driving debts, most student loan obligations, and certain other debts where the creditor successfully objects to discharge (such as debts incurred through fraud).
Q: What kinds of debts can be included in a Wisconsin Chapter 128 repayment plan?
A: Wisconsin Chapter 128 allows for most unsecured debts to be repaid without interest over the course of three years, including credit card debt, medical bills, civil judgments, past due utilities, tickets and fines. Car loans and home mortgages (which are secured debts) typically may not be included in a Wisconsin Chapter 128 repayment plan, nor can Federal tax debts and certain other past due taxes. Also, while debts for past due child support, student loan defaults and non-federal taxes can often be included in a plan, penalties and interest on such debts will usually continue to accrue.
Q: I'd like to read Wisconsin Chapter 128 for myself, where can I find it?
Q: How long does it take to obtain a discharge in a Chapter 7 bankruptcy?
A: Assuming there are no objections from your creditors or the trustee, the process usually takes approximately four months from the date of filing- sometimes a little more, sometimes less.
Q: What companies do your recommend for the required pre and post-filing Chapter 7 credit counseling?
A: If you have your own internet access, Attorney DeMoon often recommends either Cricket Debt Counseling/Fresh Start Financial or Pioneer Credit Counseling. These are not-for-profit companies that have been approved by the U.S. Trustees Office to offer credit counseling in Wisconsin. Links to each company's website can be found in the 'Interesting Links' section of this website. If you do not have internet access (or are more comfortable attending in person or over the telephone), Attorney DeMoon can recommend other approved credit counseling providers.
Q: Is filing Chapter 7 bankruptcy immoral or 'un-Christian'?
A: If you are filing in an attempt to cheat or defraud your creditors, then yes. If you are an honest person filing because you are struggling to make ends meet through no fault of your own, then absolutely not. Regardless of whatever opinions others may have shared with you, the truth is that the concept of debt forgiveness is specifically mentioned (and in fact, required) in the Bible. See Deuteronomy 15: 1-2, which states that "At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release." Also, remember that once you receive a Chapter 7 discharge, you are not prohibited from paying back your debts, you just aren't required to do so. When you get back on your feet, you will be free to repay any creditor as you see fit. And, if you are still opposed to discharging you debts under Chapter 7, consider a Wisconsin Chapter 128 debt repayment plan.
Q: I've seen commercials on T.V. for companies offering to settle my debts for 'pennies on the dollar'. Shouldn't I just try this option instead of filing bankruptcy?
A: Not without speaking to an attorney first. In some instances, debt settlement companies offer no real relief to their 'clients' and are little more than scam operations. In other instances, the fees they charge to help you repay your debts are more expensive than the fees an attorney would charge you to wipe out your debts through a Chapter 7 bankruptcy. There are other options that Attorney DeMoon can discuss with you. For more insight on this topic, read this informative 2008 article from the Milwaukee Journal-Sentinel: http://www.jsonline.com/watchdog/pi/33315609.html
Q: Why don't you offer installment payment plans for your fee in Chapter 7 bankruptcy cases?
A: Abraham Lincoln once noted that when a client pays his attorney up front "the client knows he has an attorney, and the attorney knows he has a client". In other words, when you pay in full, you won't have to worry about whether Attorney DeMoon will really work his hardest for you, and Attorney DeMoon won't have to worry about whether he'll be paid for his hard work. Again, many clients either borrow the money from family or a friend (and pay it back after their case is filed), or they will stop making credit card payments and save that money until they have full amount of the fee.
Q: Does reading the information on this website create an attorney-client relationship between me and Attorney DeMoon?
A: No. But, we hope you found it informative (and again, nothing on this website constitutes legal advice). If you are interested in having Attorney DeMoon review your situation, give him a call today at (262) 248-2488.Your initial case evaluation is free, so why wait?
Q: Does Attorney DeMoon really return his phone calls?
