Chapter 128 of the Wisconsin Statutes offers individuals and businesses in the state an alternative to bankruptcy when facing financial challenges. Commonly referred to as "Chapter 128 Debt Adjustment," this legal provision provides a mechanism for debt consolidation and repayment. In this blog post, we'll explore how Chapter 128 works, its benefits, and considerations for those considering this debt relief option in Wisconsin.

1. Understanding Chapter 128 Debt Adjustment: Chapter 128 is a state-specific legal provision that allows individuals and businesses in Wisconsin to restructure their debts without resorting to bankruptcy. It provides a voluntary, court-supervised debt repayment plan designed to help debtors regain control of their finances while ensuring fair treatment for creditors.

2. Filing for Chapter 128: To initiate the Chapter 128 process, an individual or business must file a petition with the county circuit court where they reside or have their principal place of business. The debtor must also submit a proposed debt repayment plan outlining how they intend to repay their creditors over a specific period.

3. Court Approval and Debt Repayment Plan: Upon filing, the court reviews the petition and proposed repayment plan. If the court finds the plan feasible and in the best interest of both the debtor and creditors, it may approve the Chapter 128 arrangement. Once approved, the debtor makes regular payments to a court-appointed trustee, who then distributes the funds among the creditors according to the approved plan.

4. Benefits of Chapter 128:

• Avoiding Bankruptcy: One of the primary advantages of Chapter 128 is that it provides an alternative to filing for bankruptcy. It allows debtors to address their financial difficulties without the long-term consequences associated with bankruptcy.

• Court Protection: Once the court approves the Chapter 128 plan, creditors are legally bound by its terms. This provides debtors with protection against legal actions, garnishments, and other collection efforts initiated by creditors.

• Single Monthly Payment: Chapter 128 consolidates debts into a single monthly payment, simplifying the repayment process for debtors. This can make it easier to manage finances and avoid the stress of dealing with multiple creditors.

5. Considerations and Limitations:

• Eligibility: Chapter 128 is available to individuals and businesses in Wisconsin, but certain limitations and eligibility criteria apply. Consulting with a bankruptcy attorney can help assess whether Chapter 128 is a suitable option based on individual circumstances.

• Debt Types: Chapter 128 is generally effective for unsecured debts, such as credit cards and medical bills. Secured debts, like mortgages and car loans, may require separate arrangements.

• Court Approval: The success of Chapter 128 depends on court approval. If the court determines that the proposed plan is not feasible or in the best interest of the parties involved, it may not be approved.

Conclusion: Chapter 128 Debt Adjustment in Wisconsin provides a valuable avenue for individuals and businesses seeking debt relief without resorting to bankruptcy. By understanding how Chapter 128 works and consulting with legal professionals, debtors can make informed decisions about their financial future. If you are facing financial challenges in Wisconsin, exploring Chapter 128 as a debt consolidation option may offer a path towards regaining financial stability.

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