Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
Facing financial hardship that forces you to consider bankruptcy can be overwhelming especially when your home is at stake. One of the most pressing concerns for homeowners in Wisconsin is whether they can protect their homes from creditors when filing for bankruptcy.
In Wisconsin, the homestead exemption may protect up to $75,000 of equity for one qualifying homeowner. Married couples may be able to protect up to $150,000 when they meet the ownership requirements.
How much protection applies depends on your home’s value, mortgage balance, other liens, ownership, and the type of bankruptcy you file.
This guide explains how the homestead exemption works, how to calculate your equity, and how your home may be treated in Chapter 7 and Chapter 13 bankruptcy.
The homestead exemption protects a certain amount of equity in a qualifying home from creditors. Under Wisconsin law, it generally applies to a home you own and occupy. A separate vacation home or investment property does not qualify simply because you own it.
The exemption also has limits. Mortgages, certain tax liens, purchase-money liens, and some other liens are not erased because the property qualifies as a homestead.
The homestead exemption protects qualifying home equity. It does not remove your mortgage or eliminate the lender’s lien on the property.
This distinction matters when deciding how bankruptcy could affect your home.
The exemption generally applies to property you own and occupy as your home.
A few factors can affect whether you can claim it:
Review your ownership, equity, and residency history before you file.
The Wisconsin homestead exemption amount is up to $75,000 for a qualifying owner. When spouses own the home jointly, in common, or as marital property, each spouse may claim up to $75,000.
Home equity is generally the current value of your home minus mortgages and other liens against it. For example, if your home is worth $250,000 and you owe $190,000, you have about $60,000 in equity.
Wisconsin filers may generally choose between state and federal bankruptcy exemptions. The limits differ:
|
Exemption |
Wisconsin |
Federal |
| Homestead | $75,000 per qualifying owner | $31,575 per debtor |
| Motor Vehicle | $4,000 | $5,025 |
| Household Goods | $12,000 total | Up to $16,850 total |
The federal amounts above apply to cases filed on or after April 1, 2025.
The better exemption system depends on all the property you own, not just your home.
Exemptions matter in both chapters, but they affect each case differently.
Chapter 7 can involve selling property that is not protected by an exemption.
If your home equity is covered by the available exemption, that may protect the equity from the bankruptcy trustee. If you have substantial non-exempt equity, the home may be at risk of sale.
The exemption does not remove your mortgage or the lender’s lien.
Chapter 13 bankruptcy generally allows you to keep your property while making payments through a court-approved plan.
Your home equity still matters. If some of it is not protected, that value may affect how much you must pay unsecured creditors through the plan.
A Wisconsin bankruptcy attorney can review your equity, other property, and debts before you choose between Chapter 7 and Chapter 13.
Having more equity than the available exemption does not automatically mean you will lose your home.
In Chapter 7, the trustee considers your mortgage, other liens, exemption, sale costs, and whether a sale would leave enough money to benefit creditors. In Chapter 13, non-exempt equity may affect how much you need to pay unsecured creditors through the repayment plan.
Before filing, get a reasonable estimate of your home’s current value and an accurate mortgage payoff amount. Even a small difference can change your equity calculation.
The homestead exemption does not automatically remove every lien attached to your property.
In some bankruptcy cases, you may be able to avoid a judicial lien that interferes with an exemption. Whether that is possible depends on the type of lien and the facts of the case.
If a creditor already has a judgment against you, tell your attorney before filing. You can also learn more about the Wisconsin bankruptcy process.
If keeping your home is a priority, gather the numbers you need before filing:
Do this before filing. Once a Chapter 7 case begins, your options may be more limited if non-exempt equity becomes an issue.
Yes. A qualifying homeowner can generally protect up to $75,000 of equity in the home they occupy.
They may be able to. Each spouse can claim up to $75,000 when the property and ownership requirements are met.
No. You generally choose either the Wisconsin exemption system or the federal system for your bankruptcy case.
A recent move can affect which exemptions you can use. We should review your residency history before filing.
No. It protects qualifying equity, but you still need to stay current on required mortgage payments and deal with the lender’s lien.
Your home equity is only one part of the bankruptcy decision. Your mortgage, other liens, debts, income, property, and choice of chapter can all affect what happens to your home.
If your home is one of your main concerns, the experienced team at Debt Advisors Law Offices can review your property, equity, and available exemptions before you file.
Schedule a free consultation to discuss your home, debts, and bankruptcy options.
Debt Advisors Law Offices is a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.
Learn about bankruptcy protections, types of bankruptcy, how to get started, what to expect, and who to trust. Filing bankruptcy is the ONLY way to completely eliminate debt. If bankruptcy is right for you, it offers powerful protections that cannot be achieved through alternative solutions such as hardship relief, loans, or debt settlement.
