Navigating financial challenges can be a complex journey, but for Wisconsin residents seeking an alternative to traditional bankruptcy, Chapter 128 provides a unique avenue for debt reorganization. In this blog post, we'll explore the key aspects of Chapter 128, shedding light on what it is, how it works, and whether it might be the right solution for your financial situation.

Understanding Chapter 128:

Chapter 128 is a provision under Wisconsin state law that offers individuals an opportunity to reorganize their debts outside the federal bankruptcy system. Unlike traditional bankruptcy filings, Chapter 128 does not involve the liquidation of assets or a discharge of debts. Instead, it provides a structured repayment plan to help individuals regain control of their financial situation.

Key Features of Chapter 128:

1. Debt Consolidation:

   • Chapter 128 allows individuals to consolidate their debts into a single, manageable repayment plan.

2. No Asset Liquidation:

   • Unlike Chapter 7 bankruptcy, Chapter 128 does not involve the liquidation of assets to repay creditors.

3. Automatic Stay:

   • Upon filing a Chapter 128 petition, an automatic stay goes into effect, preventing creditors from pursuing certain collection actions during the process.

4. Structured Repayment Plan:

   • The debtor proposes a repayment plan, typically spanning 36 months or less, outlining how debts will be repaid over time.

5. Court Oversight:

   • The court reviews and approves the proposed repayment plan, ensuring it is reasonable and feasible based on the debtor's financial circumstances.

6. Creditors' Approval Not Required:

   • Unlike some debt consolidation programs, Chapter 128 does not require the approval of creditors for the proposed plan.

Is Chapter 128 Right for You?

While Chapter 128 offers a unique approach to debt reorganization, it may not be suitable for everyone. Consider the following factors:

1. Regular Income:

   • Chapter 128 is generally more accessible to individuals with a regular income and the ability to repay debts within a reasonable time frame.

2. Types of Debts:

   • Chapter 128 is effective for various types of unsecured debts, such as credit cards and medical bills, but it may not address secured debts like mortgages.

3. Financial Goals:

   • Evaluate your financial goals and whether Chapter 128 aligns with your objectives. It provides a structured plan for debt repayment but does not discharge debts at the end of the process.

How to Initiate Chapter 128:

1. Consult with an Attorney:

   • Seek advice from a qualified attorney specializing in Wisconsin debt relief. They can assess your eligibility and guide you through the process.

2. Prepare and File the Petition:

   • Work with your attorney to prepare a Chapter 128 petition, detailing your financial situation and proposing a repayment plan. File the petition with the appropriate county court in Wisconsin.

3. Automatic Stay and Repayment Plan:

   • Upon filing, the automatic stay takes effect, and the court reviews and approves the proposed repayment plan.

4. Make Payments:

   • After approval, make regular payments to a court-appointed trustee, who then distributes funds to creditors according to the approved plan.

5. Completion and Fresh Start:

   • Successfully completing the repayment plan provides relief, and any remaining eligible debts may be discharged, offering a fresh financial start.

Conclusion:

Chapter 128 in Wisconsin offers a viable alternative for individuals seeking to reorganize their debts without resorting to traditional bankruptcy. Consulting with a qualified attorney is crucial to navigating the complexities of Chapter 128 and determining whether it aligns with your financial goals. With careful consideration and professional guidance, Chapter 128 can be a valuable tool on your journey to financial stability.

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