Legal Question in Bankruptcy in Wisconsin

Bankruptcy or Foreclosure; Which is Better?

Although bankruptcy is always an option when one cannot handle debt, it is not always trouble free. The new bankruptcy law uses a formula comparing income to household size and secured debt. If your available income is too high (as compared to state averages), you may not be eligible for chapter 7 and instead be forced into chapter 13. There, you would still need to make at least some level of payments to your trustee over a five year period. If you send me a private e-mail, I would be happy to go over these guidelines with you. Foreclosures in WI may or may not end with personal liability for leftover debt after the property is auctioned off by the bank. Although most mortgages and promissory notes allow the bank to sue the borrower personally, it is rare for first mortgage holders to do so--the bank is generally happy with simply getting the property back. The opposite is generally true, however, with second or third mortgages as well as with any type of business loans secured by mortgage(s). Those who undergo foreclosure often also need to go bankrupt as well, depending upon their financial situation, so it is not a simply an "even/or" issue. If one does go bankrupt and/or face a foreclosure, one can claim a $40,000.00 homestead exemption on a new property being purchased on a land contract or by any other means such as a different mortgage. Homestead equity values worth more than $40,000.00, however, are available to creditors. You need to consult with an experienced bankruptcy attorney prior to making your decision.