Facing a wage garnishment in Wisconsin can be stressful. Creditors seeking to collect on a debt can legally take a portion of your paycheck, leaving you with less to cover essential expenses. However, Chapter 128 of the Wisconsin Statutes offers a potential lifeline, providing a structured way to repay debts and, importantly, stop an existing wage garnishment.
Understanding Wage Garnishment in Wisconsin
Before diving into Chapter 128, it's crucial to understand how wage garnishment works in Wisconsin. When a creditor obtains a court judgment against you for unpaid debt, they can seek a wage garnishment order. This order compels your employer to withhold a specified portion of your earnings and send it directly to the creditor until the debt is satisfied. This can significantly impact your finances and make it difficult to manage your budget.
Chapter 128: A Path to Debt Management and Garnishment Relief
Chapter 128 of the Wisconsin Statutes provides a debt amortization plan process. It allows individuals with regular income to create a repayment plan that's approved by the court. This plan consolidates your debts and establishes a monthly payment schedule that's more manageable than dealing with individual creditors and potential garnishments. Critically, filing a Chapter 128 plan often immediately stops an existing wage garnishment.
How Chapter 128 Stops Garnishment:
When you file a Chapter 128 petition with the court, an automatic stay usually goes into effect. This stay acts as a legal injunction, preventing creditors from taking further collection actions, including wage garnishment. The garnishment stops because the court now oversees the debt repayment process through the Chapter 128 plan. Instead of the creditor directly taking a portion of your wages, payments are made according to the court-approved plan.
Key Steps in the Chapter 128 Process:
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Consult with an Attorney: This is arguably the most crucial step. A qualified attorney specializing in debt and bankruptcy law can assess your situation, explain the implications of Chapter 128, and guide you through the entire process. They can also advise you on whether Chapter 128 is the right solution for your specific circumstances.
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File a Petition: Your attorney will help you prepare and file a Chapter 128 petition with the court. This petition includes detailed information about your income, debts, and proposed repayment plan.
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Automatic Stay: As mentioned, the automatic stay typically takes effect upon filing, halting the wage garnishment.
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Plan Approval: The court reviews your proposed repayment plan to ensure it's fair to both you and your creditors.
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Payments and Distribution: Once the plan is approved, you'll make regular payments according to the schedule outlined in the plan. These payments are made through a trustee who then distributes the funds to your creditors.
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Completion and Discharge: Upon successful completion of the Chapter 128 plan, the remaining debts included in the plan are deemed paid in full.
Benefits of Chapter 128 Beyond Stopping Garnishment:
- Consolidated Payments: Instead of juggling multiple payments to different creditors, you make one monthly payment.
- Structured Repayment: The court-approved plan provides a clear and manageable repayment schedule.
- Protection from Creditors: Chapter 128 offers protection from aggressive debt collection tactics, including garnishments, as long as you adhere to the plan.
Important Considerations:
- Eligibility Requirements: There are specific eligibility requirements for filing a Chapter 128 plan, including income and debt limitations.
- Impact on Credit Score: While Chapter 128 can provide debt relief, it will likely have a negative impact on your credit score.
- Legal Assistance is Essential: Navigating the Chapter 128 process can be complex. Seeking guidance from an experienced attorney is highly recommended.
Attorney Nathan DeLadurantey offers free consultations to explain your legal rights in Wisconsin. Free consultations can be scheduled online.