Home » Chapter 128

From Chapter 128

Wisconsin 128 Debt Relief Option

One alternative to bankruptcy, available only to Wisconsin residents, is a “Wisconsin 128.” I advise this option for clients who are only facing issues with unsecured debt, and who can afford to pay back some or all of their unsecured creditors, over a three year period. Once you identify all the unsecured creditors that you wish to include, a plan is proposed and filed in state court, who then appoints a trustee who acts as a receiver for the plan payments and makes distributions according to the plan. You enjoy the protections of the Wisconsin 128 plan if you remain current on your payments to the trustee (which can be deducted automatically from your paycheck and save you on trustee fees.)

What benefits do I receive if I put my bills in a Wisconsin 128 plan?

Upon filing your plan, all collection efforts of the creditors included in the plan must cease, including garnishments. The creditor then files a claim, and future interest and penalties are not included in the claim. Interest accrued prior to filing the Wisconsin 128 is usually included in the creditor’s claim, which must be paid through the plan. You receive many of the same benefits that you would under a bankruptcy stay (I won’t address distinctions here, which could be important to your case and why you should speak to an attorney who is familiar with both bankruptcy and the laws of the Wisconsin 128, before deciding.)  However, the creditor may still pursue a judgment (but can’t collect on it) and if you fail your plan, the interest and penalty can accrue as though you never filed.   Always be sure you can afford a Wisconsin 128 before going into it.

What debts can be included in a Wisconsin 128 plan?

Unsecured debt that can be placed in a Wisconsin 128 includes medical bills, dental bills, late rent, credit card bills, pay day loans, personal loans, civil judgments, tickets and fines, past due utility bills, and in limited cases, state and municipal taxes.

What debts cannot be included in a Wisconsin 128 plan?

Secured debts cannot be solved through a Wisconsin 128, such as past due mortgage payments, and past due car payments. Domestic support obligations such as child support arrears should not be included. A Wisconsin 128 cannot resolve property taxes, and the IRS will not recognize a Wisconsin 128 for any tax liability.

Must I include all my unsecured creditors in a Wisconsin 128 plan?

No. There are some circumstances where it won’t make sense to include all of your unsecured debt, and you can always include creditors that you initially left out of the plan by amendment.

How do I know if I should consider a Wisconsin 128 plan?

A Wisconsin 128 is an excellent solution for the right circumstance. You should speak to an attorney who is familiar with both bankruptcy and Wisconsin 128 procedure before you decide. A good starting point is to estimate your plan payment after you total the unsecured debt balances you wish to include, add 10%* to represent costs and administration, and then divide it by 36. For example, if you are getting garnished on a debt that is $3,000.00 and wish to only include that debt in your Wisconsin 128 plan, you would estimate a total debt obligation of $3,300.00 ($3,000 + $300) and divide it by 36 to estimate a payment of: $91.67 per month.

*The trustee will usually only charge 7% if withheld through your paycheck.

Can I file a Wisconsin 128 without an attorney?

A Wisconsin 128 can be filed through my office for a fraction of the price of a bankruptcy. I’ll give you a firm price once I’ve met with you and reviewed your circumstances.

Can I file a Wisconsin 128 without an attorney?

Certainly. I could pull my own teeth, too, I suppose. However, it is advised you have an attorney advocate at all stages of the Wisconsin 128 filing. Call my office at 307-460-8598 and schedule a low-cost consultation to see if a Wisconsin 128 is right for you.