Facing debt can be overwhelming, and sometimes, a fresh start feels necessary. In Wisconsin, Chapter 128, also known as the Debt Adjustment Act, offers an alternative to traditional bankruptcy for consumers struggling with manageable debt. Here's a breakdown of what Chapter 128 entails and how to file for it in Wisconsin.

Understanding Chapter 128

• Debt Consolidation: Chapter 128 allows you to consolidate unsecured debts (credit cards, medical bills, etc.) into a single monthly payment plan typically lasting three years.
• Court-Ordered Repayment: The court approves the repayment plan and oversees its execution. This provides some legal protection from creditors while you're making your payments.
• Focus on Specific Debts: You choose which debts to include in the plan, unlike bankruptcy where all debts are addressed.
• No Automatic Stay: Unlike bankruptcy, Chapter 128 doesn't automatically stop creditors from collection actions. However, the court can intervene if a creditor violates the terms of the approved plan and attempts to garnish you. 

Who Qualifies for Chapter 128?

• Wisconsin Residency: You must be a resident of Wisconsin to file for Chapter 128.
• Regular Income: You need to have a demonstrably employment income source to ensure you can make consistent payments under the plan.
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The Chapter 128 Filing Process:

• Seek Professional Guidance: While you can technically file for Chapter 128 yourself, consulting with an attorney specializing in debt relief is highly recommended. They can guide you through the process, ensure proper paperwork, and represent you in court if necessary.
• Gather Information: Collect documents like income statements, debt verification letters, and proof of residency.
• Petition and Repayment Plan: Your attorney will help prepare a petition outlining your financial situation and a proposed repayment plan.
• Filing with the Court: The petition and plan are filed with the circuit court in the county where you reside. There are associated filing fees.
• Court Hearing and Approval: A court hearing might be scheduled to review your plan and ensure its feasibility.
• Making Payments: Once approved, you'll start making your monthly payments to a court-appointed trustee who distributes them to your creditors.

Things to Consider

• Alternatives to Chapter 128: Explore options like debt consolidation loans or credit counseling before committing to a court-ordered plan.
• Impact on Credit Score: Filing for Chapter 128 may negatively affect your credit score, although the impact is generally less severe than bankruptcy.
• Meeting Your Obligations: Failing to make timely payments under the court-approved plan can have legal consequences.

Getting Help with Chapter 128

If you're considering Chapter 128, consulting with a qualified debt relief attorney is crucial. They can assess your situation, determine your eligibility, and guide you through the filing process to maximize your chances of success. Remember, this blog post offers general information and shouldn't be considered legal advice.

Attorney Nathan DeLadurantey offers free consultations to explain your legal rights in Wisconsin. Free consultations can be scheduled online.