Debt can feel overwhelming, especially when you're struggling to keep up with payments. If you're a Wisconsin resident, you might have heard about Chapter 128. This state-specific alternative to bankruptcy offers a structured way to repay your debts over time. Let's break down how it works and whether it's the right option for you.
What is Wisconsin Chapter 128?
Chapter 128 of the Wisconsin Statutes is a debt amortization plan. Essentially, it allows you to consolidate your debts into a single, manageable monthly payment. Unlike bankruptcy, it doesn't discharge your debts; instead, it creates a court-supervised repayment plan, typically lasting up to three years.
How Does it Work?
- Consult with an Attorney: This is crucial. A qualified attorney specializing in debt management can assess your financial situation and determine if Chapter 128 is suitable. They'll guide you through the process and ensure you understand your rights and obligations.
- File a Petition: Your attorney will file a petition with the Circuit Court in your county. This petition outlines your income and debts.
- Develop a Repayment Plan: A repayment plan is created, detailing how you'll pay back your creditors over a specified period of 36 months.
- Court Approval: The court reviews and approves the repayment plan. Once approved, your creditors are legally bound to accept the payments outlined in the plan.
- Make Monthly Payments: You'll make regular monthly payments to a court-appointed trustee, who will then distribute the funds to your creditors according to the approved plan.
- Completion: Upon successful completion of the repayment plan, your debts are considered paid in full.
Benefits of Chapter 128:
- Avoid Bankruptcy: Chapter 128 offers an alternative to bankruptcy, which can have a more significant negative impact on your credit score.
- Stop Creditor Harassment: Once the plan is in place, creditors are prohibited from trying to garnish your wages or other assets.
- Consolidated Payments: Simplify your finances by making a single monthly payment instead of juggling multiple bills.
- Maintain Assets: Unlike some bankruptcy proceedings, Chapter 128 allows you to keep your assets, such as your car and home.
Who Qualifies for Chapter 128?
To be eligible for Chapter 128, you must:
- Be a resident of Wisconsin.
- Have a regular source of income.
- Have unsecured debts (e.g., credit card debt, medical bills).
- Be able to make regular payments to the trustee.
Important Considerations:
- Costs: Filing a Chapter 128 involves court fees and attorney fees. DeLadurantey Law Office offers flexible arrangements so you can get your Chapter 128 filed as soon as possible.
- Credit Impact: While less severe than bankruptcy, Chapter 128 can still negatively impact your credit score.
- Long-Term Commitment: You'll be obligated to adhere to the repayment plan for the duration of the agreed-upon period.
- Not all debts can be included: Certain debts cannot be included.
Is Chapter 128 Right for You?
Chapter 128 can be a valuable tool for individuals facing overwhelming debt. However, it's essential to consult with a qualified attorney to determine if it's the best course of action for your specific situation. They can help you weigh the pros and cons and explore other debt management options.
Attorney Nathan DeLadurantey offers free consultations to explain your legal rights in Wisconsin. Free consultations can be scheduled online.
