FILING BANKRUPTCY IN WISCONSIN


Congress gave each of the states the option to create their own exemptions, and then to authorize a debtor to chose one set of exemptions which would work best in that debtor's circumstances, or limiting the debtor to the state's own exemptions, as is the case in Illinois and 34 other states.

An exemption is simply a law that indicates what property a debtor is entitled to protect from his/her creditors when he/she files for bankruptcy protection. These amounts are usually doubled for married debtors filing jointly.

--> Wisconsin is one of those unique states which provides debtors with the
opportunity to choose either the federal or state exemptions.
What is the practical difference you ask?

For example:

Homestead:            Wisconsin provides $40,000
                                Federal Bankruptcy Code - $18,450
Personal Property:  Wisconsin provides - $5,000
                                Federal Bankruptcy Code - $9,300
Vehicle:                   Wisconsin provides - $1,200
                                 Federal Bankruptcy Code - $2,775

Keep in mind that these numbers represent the amount of equity in the property that you can protect. That means if you owe more on the property than it is worth there is no equity and you do not need an exemption to protect that item in bankruptcy.

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DETERMINING WHAT PROPERTY IS PROTECTED BY EXEMPTIONS CAN BE TRICKY, SO IT IS STRONGLY SUGGESTED THAT YOU SPEAK WITH A
KNOWLEDGEABLE BANKRUPTCY  ATTORNEY BEFORE YOU DECIDE TO FILE, OTHERWISE YOU MAKE A FATAL MISTAKE.

Foley & Honigmann represented a debtor in an Arizona bankruptcy case [ In Re Lenke,  249 B.R. 1 (Bkrtcy.D.Ariz. 2000)] which Judge Randolph J. Haines found interesting and important enough to warrant publishing his decision.


Summary: The debtor was being prosecuted by the Maricopa County Prosecutor for allegedly stealing funds from a corporation of which he was a joint owner. Prior to the institution of the criminal prosecution the debtor had filed a Chapter 11 which he then converted to a
Chapter 7.  The Debtor received his discharge in October, 1998, which discharged his debts,
including those he may have owed to the corporation. Nonetheless, the debtor's business partner and attorney convinced the prosecutor's office to bring charges against the debtor.

It was shortly after the charges were filed that the debtor retained Foley & Honigmann to
argue that the criminal prosecution was essentially a disguised effort to collect a debt
discharged in bankruptcy, which is a violation of the discharge injunction. The Debtor sought to permanently enjoin the prosecutor's office from proceeding with its case.

Basic Holding: The judge ruled that criminal prosecutions to collect discharged debts may be
enjoined. However, the judge determined that the debtor must first be found guilty in order for the bankruptcy court to revisit the case and determine if the prosecutor's office was
acting in violation of bankruptcy law.  As it turns out the debtor's criminal attorney
successfully defended the case and the debtor was found innocent.

Foley & Honigmann list this case among their victories, as the court's ruling agreed with their position that criminal matters can be enjoined under certain circumstances, and despite the futile attempts made by the Arizona Attorney Generals office to argue that the bankruptcy court has no jurisdiction over criminal matters.

Phone: (630) 954-4020       Fax: (630) 954-4022

Email: foleyhonigmann@sbcglobal.net