While most people are somewhat familiar with bankruptcy (an action under federal law), many are not aware of the debt relief available to them under Wisconsin Law.  Perhaps the best way to explain a Chapter 128 Repayment Plan is to start by comparing it to both a Chapter 7 bankruptcy (the discharge of debt after possible liquidation of assets) and a Chapter 13 bankruptcy (3 to 5 year payment plan of some debts after possible liquidation of assets).   "Liquidation of assets" means the sale of your property, which can include your home, jewelry, furniture and any and all of your belongings.   If you do not qualify for relief under Chapter 128 of the Wisconsin Statutes, you may need an attorney to help you plan relief under the bankruptcy code in a way that protects your assets from being sold. 

Chapter 128 requires that a person have an income; that income could be employment, disability payments, social security, or any other type of regular (not necessarily weekly or monthly) money that is received.  A Chapter 13 bankruptcy also requires a regular income; a Chapter 7 bankruptcy does not. 

In order to get relief under Chapter 128, a petition is filed in the circuit court that is located in the county that you live in, stating that you have the following debts that you need relief from, that you have a regular source of income, and that the debts, if frozen, can be paid off over the next three years (36 months).  You do not need to list all of the debts that you have in the petition, only those that you want to include in the plan.  Also, you do not list your assets or your income in the petition.  Along with the petition, an order for the judge to sign is submitted.  The attorney submits the petition and order on your behalf so that you do not have to make a court appearance. 

The order by the judge names who the trustee will be, freezes the debts, and prohibits the creditors from taking action against you.  The trustee is the official who will notify the creditors of the court’s order, figure out what the exact payment plan will be, collect the plan payment each month from you, and pay the creditors what they are owed.  The trustee charges a fee that is included in the monthly payment.  The legal fees for the attorney who helps you by filing the petition and order can also be included in the plan, thus it is possible to only have to pay for the expenses, including the court’s filing fee (a total charge of $30.00) and the initial preparation fee ($50.00) to get relief from creditors under Chapter 128.  You can make the payments to the plan either through a voluntary wage assignment, or pay the trustee directly.  There is a slightly higher fee charged by the trustee if a wage assignment is not used. 

At the end of 36 months, when the plan is complete, the creditors are paid in full. 

If you want to know how to get started, call ((414) 271-5798) or e-mail us today so that we can send you information regarding what you need to do, and how much it will cost. 

If you are not eligible for relief under Chapter 128, then you may have to consider relief under the bankruptcy laws. 

Congress passed the federal bankruptcy laws so that people can get a financial "fresh start" from burdensome debts. In 1934, in the case of Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934), the Supreme Court explained:

[The discharge in a bankruptcy action] gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.

This discharge, releases debtors from personal liability from certain debts and prevents creditors from acting against someone to collect the debt.  These actions include telephone calls, lawsuits and wage garnishments.  There are two basic forms of bankruptcy available to most people, the Chapter 7 and the Chapter 13.

In a Chapter 7 bankruptcy, a trustee takes control of the debtor's estate, reduces the assets to cash, and pays the creditors as much as possible.  The debtor has a right to exempt certain property; one of the main jobs of the attorney in a Chapter 7 bankruptcy is to exempt, or protect, as much of the debtor’s property as possible.  With a good lawyer handling a Chapter 7 bankruptcy, there should be little or no nonexempt property; thus there is no actual liquidation of assets.  These cases are called "no-asset cases."  A creditor with an unsecured claim gets paid in a Chapter 7 bankruptcy only if there is an asset and the creditor files a proof of claim with the bankruptcy court.  In most Chapter 7 cases, the debtor receives a discharge, or release from personal liability for certain dischargeable debts within a few months after the bankruptcy petition is filed.  In some cases, however, if the debtor's income exceeds certain thresholds, the debtor may not be eligible for Chapter 7 relief, and would only be able to file a Chapter 13.

A Chapter 13 bankruptcy is designed for someone with a regular source of income.  Chapter 13 is often preferable to Chapter 7 because it allows a person to keep a valuable asset, such as a house.  If you are facing a foreclosure, you may be able to keep your home by filing a Chapter 13 bankruptcy action.  Under a Chapter 13, a "plan" to repay creditors over time – usually three to five years is created and approved by the bankruptcy court.  Chapter 13 differs from Chapter 7 because the Chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through a trustee, based on the debtor's anticipated income over the life of the plan. Because of this, the debtor must complete the payments required under the plan before the discharge is received.  The debtor, however, is protected from collection actions such as lawsuits, and garnishments while the plan is in effect. The discharge is also somewhat broader so that more debts are eliminated under Chapter 13 than under Chapter 7.

Call us today ((414) 271-5798) if you have questions or need more information.  We would be more than happy to set up an appointment for a free consultation.