Can You Keep Your Home in Wisconsin Bankruptcy?

Filing for bankruptcy can be a daunting process, especially when it comes to protecting your most valuable assets. If you are a homeowner in Wisconsin and considering bankruptcy, you may be wondering, "Can I keep my home?" The answer largely depends on the type of bankruptcy you file and specific exemptions that apply to your situation.

In Wisconsin, individuals typically file for either Chapter 7 or Chapter 13 bankruptcy, each having different implications for your home.

Chapter 7 Bankruptcy and Homeownership

Chapter 7 bankruptcy is often referred to as a liquidation bankruptcy. In this process, a trustee is appointed to sell non-exempt assets to repay creditors. However, many filers can retain their homes if they qualify for exemptions.

Wisconsin provides a homestead exemption that allows individuals to protect a certain amount of equity in their primary residence. As of 2023, the homestead exemption in Wisconsin is $75,000 for individuals and $150,000 for married couples filing jointly. If the equity in your home is less than these amounts, you can typically keep your home even after filing for Chapter 7 bankruptcy.

If your home’s equity exceeds the exemption limits, you may have a few options. You might be able to pay the difference to the bankruptcy estate and retain your home or consider negotiating with your creditors outside of bankruptcy to keep your property.

Chapter 13 Bankruptcy and Homeownership

Chapter 13 bankruptcy, also known as a reorganization bankruptcy, allows you to create a repayment plan to pay off your debts over three to five years. This option is often favorable for homeowners who are behind on their mortgage payments but want to keep their home.

In Chapter 13, you can catch up on missed payments through the repayment plan while also keeping your home. This is particularly beneficial if you are facing foreclosure. As long as you adhere to the court-approved repayment plan, your lender cannot foreclose on your home during this time.

Key Considerations

It's essential to know that while bankruptcy can help you keep your home, ongoing mortgage payments must continue throughout the bankruptcy process. Failure to make these payments could jeopardize your ability to retain the property.

Additionally, consulting with a bankruptcy attorney can provide you with tailored advice. They can help you navigate the complexities of bankruptcy, evaluate your equity, and ensure you take advantage of all available exemptions.

Conclusion

Whether you can keep your home in Wisconsin following bankruptcy depends on various factors, including the type of bankruptcy you file and your unique financial situation. Understanding the state's exemption laws and working with a qualified professional can significantly impact your ability to retain your home. Being informed is the first step in safeguarding your financial future.