Bankruptcy Law in Wisconsin: How to Protect Your Home and Assets

Bankruptcy Law in Wisconsin: How to Protect Your Home and Assets

Bankruptcy law in Wisconsin is designed to help individuals and businesses navigate financial distress while offering protective measures for essential assets. Understanding how to effectively use these laws is crucial to ensuring that your home and other important belongings are safeguarded during the bankruptcy process.

In Wisconsin, individuals typically file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code. Each chapter serves different financial circumstances and offers unique protections.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known for its ability to quickly eliminate unsecured debts. This can include credit card debt, medical bills, and personal loans. However, many individuals worry about losing their homes and other critical assets.

Wisconsin has specific exemptions that allow you to protect your property during Chapter 7 bankruptcy. The homestead exemption in Wisconsin enables homeowners to safeguard a certain amount of equity in their primary residence. As of 2023, this exemption can protect up to $75,000 in equity for individuals, and up to $150,000 for married couples filing jointly.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, on the other hand, is a repayment plan that allows individuals to keep their assets while making structured payments to creditors over three to five years. This option is particularly beneficial for those who have fallen behind on mortgage payments but wish to keep their homes.

Under Chapter 13, you can catch up on your mortgage arrears while making regular monthly payments. Additionally, this chapter allows for the protection of non-exempt assets, enabling you to retain valuable possessions that might otherwise be subject to liquidation under Chapter 7.

Strategies to Protect Your Home

To protect your home and assets effectively, consider the following strategies:

  • Know Your Exemptions: Familiarize yourself with Wisconsin's exemption laws to understand what assets can be protected in bankruptcy.
  • Utilize Homestead Exemption: Take full advantage of the homestead exemption to shield your home equity during bankruptcy proceedings.
  • Consult a Bankruptcy Attorney: Engaging a knowledgeable attorney can significantly impact your outcomes. They can provide guidance specific to your financial situation and help navigate the complexities of bankruptcy law.
  • Proper Planning: Prior to filing, assess your assets and liabilities carefully. Proper planning can enable you to exempt as much property as possible.

Conclusion

Bankruptcy in Wisconsin can be a lifeline for those struggling with overwhelming debt, but understanding the laws and protections is essential for maintaining your home and assets. Whether you consider Chapter 7 or Chapter 13, knowing how to protect your property will empower you to make informed decisions during a challenging financial time. Always consult with a qualified attorney to explore the best options tailored to your unique circumstances.