Legal Question in Credit and Debt Law in Wisconsin

Re: Car Repossession--Beware the

Although broken lease charges are 100% dischargeable in bankruptcy (so long as you have not intentionally damaged the vehicle), only the party suing you can tell you how much they are willing to "settle" for. A "settlement" implies voluntary agreement from both parties--otherwise you are looking at a "judgment," which is a court order, which will not consider your position unless your lease contract requires it to do so. In terms of how much they can sue for, you will need to read your lease over to see what items they can accelerate. The amount they are suing for may anticipate some mileage and other surrender charges, which may not apply (depending upon the condition of the vehicle if you surrendered it under the lease terms). It is safe to assume that the amount you owe is likely to exceed the value of the vehicle. If you may need to file bankruptcy on their claim or other debts, you should do it before this October, when the bankruptcy reform bill first becomes effective. That law is likely to multiply the amount you must pay to your creditors in bankruptcy by many times. Under current law, 95% of debtors pay nothing to their creditors and lose no property or assets. However, under the new law, families earning more than the median state income will likely be forced into a chapter 13 bankruptcy. Under the new law, a chapter 13 generally involves a wage garnishment for up to six years with very little money left over for family living expenses. Allowed living allowances will be determined according to the same guidelines that the IRS currently uses against delinquent taxpayers. These guidelines may well limit many families to living in a boarding house type facility with public bathrooms and a diet consisting primarily of canned beans.