Filing bankruptcy in Wisconsin enables residents to escape irresolvable debts. For most people, straight bankruptcy allows for a fresh financial start. For a few people that want to retain their assets and pay their bills, restructuring bankruptcy brings debt to a more affordable level, so the debtor can repay creditors.
Wisconsin Bankruptcy Topics
- Personal Bankruptcy Options
- Keep Your Home: Bankruptcy and Foreclosure
- Wisconsin Exemptions to Bankruptcy Liquidation
- Options for Filing Bankruptcy
- Local Bankruptcy Courts and Trustees
Personal Bankruptcy in Wisconsin
State residents may file Chapter 7 or Chapter 13 bankruptcy. Wisconsin follows the U.S. Bankruptcy Code, Title 11.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is for those individuals drowning in a sea of debt, with no hope of ever being financially free in the near future, if ever. A court appointed trustee seizes and sells all applicable assets, to distribute the monies evenly among the creditors. Although some debts like student loans are exempt from bankruptcy, the rest are totally forgiven. The debtor has a fresh start, with the opportunity to make better financial choices in the future. However, not everyone qualifies for Chapter 7. A means test is given, to prevent abuse of bankruptcy law. Wages are part of the equation. The average single wage earner makes $42,816; a family of two earns $57,657; and a family of three has an average income of $67,103.
Chapter 13 Bankruptcy
In an effort to save a small business, home, family car, and other assets, a debtor opts to file under Chapter 13. The court will negotiate with creditors to lower the balance of the debts. Oftentimes, creditors are willing to forego late fees or part of the interest. Then, the court will calculate a new repayment plan for 3-5 years. Payments are made to the trustee, and the court, in turn, pays the creditors. However, no every debtor will qualify, because the amount of unsecured debt is greater than $336,900, and the balance of secured debt is more than $1,010,650. (See more on Filing Chapter 13 in Wisconsin).
Filing Bankruptcy during Foreclosure
Debtors should not wait for foreclosure proceedings to be initiated, before filing bankruptcy. For any hope of keeping a home or other major assets, it is better to consult a bankruptcy attorney once the payments are two months behind. Legal counsel may save the family home and car. Otherwise, the lien holder can petition the court for the property stay to be lifted. If granted, the asset is sold.
Wisconsin Bankruptcy Exemptions
Wisconsin has a specific list of assets that the debtor can keep, despite bankruptcy. The following chart is a partial representation of those assets:
Type of Asset(s)
Details on Applicable Exemption(s)
Property of abode worth $40,000-couple cannot double. Proceed from sale are exempt for two years-if meant for new home
Federal disability, society and fraternal benefits, proceeds from property destroyed in fire, life insurance benefits for wife-up to $5000, insurance proceeds prohibited from paying beneficiary debts, unmatured life insurance valued at no more than $4000, life insurance benefits for dependent
Property of business partnership, alimony and child support
Some municipal and public employees, military pensions, retirement, firefighters and policemen of cities greater than 100,000
$1000 in deposits, burial plots, $1200 motor vehicle, household goods, furnishings and personal items valued at $5000, $25,000 in personal injury compensation, lost future earnings compensation, tenants lease or housing co-op equal to homestead amount, wrongful death compensation
Compensation for workers, crime victims, and the unemployed; veterans benefits, Social Security
At least 75% of unpaid wages
Wisconsin Bankruptcy Court Filing Options
Use a Bankruptcy Lawyer
It is not advisable to attend bankruptcy court without the services of an attorney. A bankruptcy lawyer knows all of the laws, can answer legal questions asked by the court, provide sage legal advice, and give moral support during stressful proceedings. Legal counsel can prevent financial mistakes and potential legal troubles.
Use a Filing Service
Using a filing service is a risky proposition. All of the documents may not be filed with the court. Any mistakes are the debtor’s responsibility, and can lead to more financial and legal trouble. The service will no answer any questions in court or provide legal advice.
File “Pro Se”
For debtors unable to hire a lawyer, the court allows for filing pro se. However, the consequences of self-representation often lead to costly financial mistakes and legal confusion. No layperson can understand all of the complexities of bankruptcy law, prior to the court date.
Courts and Wisconsin Bankruptcy Trustee Information
Wisconsin Eastern District Court Main Office
362 United States Courthouse and
517 East Wisconsin Avenue
Milwaukee, WI 53202
Wisconsin Western District Court Main Office
320 Robert W. Kastenmeier
United States Courthouse
120 North Henry Street
Madison, WI 53703-4304