Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
Filing for bankruptcy doesn’t mean losing everything you own. In fact, both federal and Wisconsin bankruptcy laws are built to help protect the property you need to maintain a stable life. These legal protections are called bankruptcy exemptions, and they determine what you can keep during the process.
Understanding exemptions is especially important for Wisconsin residents because the state gives you a choice: you can use either the Wisconsin exemption system or the federal one. Knowing which option benefits you most can mean keeping your home, your retirement savings, and other essentials safe.
This guide explains what counts as an asset, how exemptions work, and the specific protections available in Wisconsin. It also highlights the differences between Wisconsin and federal rules so you can see which system may work better for your situation.
When filing for bankruptcy, all your assets must be listed. Assets aren’t just limited to your home or car; they include both physical and financial property.
Physical assets are items you own that have tangible value. These may include your home, vehicles, land, furniture, electronics, artwork, or jewelry. Even everyday items like clothing and appliances fall into this category, though most are protected under exemptions.
Financial assets include income, savings accounts, retirement plans, pensions, securities, and life insurance policies. Many of these are protected, but knowing the limits is crucial.
Income and retirement savings are often considered the most important assets. Without steady income, maintaining any other property becomes difficult. Similarly, retirement accounts can determine your quality of life for decades.
Exemptions are designed to help people rebuild their lives after financial setbacks. They allow you to keep certain property so you’re not left with nothing.
Bankruptcy exemptions vary by state. Some states require you to use their exemptions, but Wisconsin gives you a choice: you can use either Wisconsin’s exemptions or the federal exemption system. Once you choose, you can’t mix and match between the two.
The type of bankruptcy you file also matters. In Chapter 7, non-exempt property may be sold to pay creditors. In Chapter 13, exemptions influence how much you repay through your repayment plan. Either way, exemptions are central to protecting your property.
Under 11 U.S.C. § 522, debtors may choose between federal and state exemption systems unless state law prohibits. Wisconsin allows this choice.
Wisconsin law offers several important protections for individuals filing bankruptcy. These exemptions are especially valuable for families and individuals seeking stability.
Wisconsin Stat. § 815.20 protects up to $75,000 in equity in a primary residence ($150,000 for married couples).
If Wisconsin’s system doesn’t fit your circumstances, you may choose federal exemptions instead. This option sometimes benefits individuals with more personal property or flexible needs.
Federal exemptions cover a smaller homestead allowance around $27,900 but they include a “wildcard exemption” that allows you to protect property not covered under specific categories. This flexibility can be helpful if you don’t own a home but want to protect cash, savings, or other assets.
Most tax-exempt retirement accounts (401(k), 403(b), pensions) are fully protected. Traditional and Roth IRAs are exempt up to approximately $1.5 million (adjusted periodically).
|
Category |
Wisconsin Exemption |
Federal Exemption |
| Homestead Equity | Up to $75,000 ($150,000 joint) | Up to ~$27,900 |
| Motor Vehicle | ~$4,000 | ~$4,450 |
| Household Property | Up to $12,000 total | Up to ~$14,875 |
| Retirement Accounts | Fully exempt (IRAs capped at ~$1.5M) | Same (federal cap applies) |
| Wildcard Exemption | Limited | ~$1,475 + unused homestead up to $13,950 |
(Values approximate; always confirm with current statutes or U.S. Courts guidance)
Choosing between state and federal exemptions is more complicated than it looks. Small mistakes like misclassifying an asset or choosing the wrong exemption system can mean losing property you could have kept.
An experienced Wisconsin bankruptcy attorney understands local rules and can help you select the system that offers the most protection.
Property like home equity, a vehicle, household items, retirement accounts, and pensions are protected under Wisconsin’s bankruptcy exemptions.
Yes. Wisconsin allows debtors to choose either the state or federal system, but once chosen, you cannot combine them.
Not always. Exemptions protect only certain property. Non-exempt assets may be sold in Chapter 7 or factored into repayment under Chapter 13.
Most retirement accounts are fully protected. IRAs are protected up to about $1.5 million, though amounts may adjust for inflation.
You could risk losing assets unnecessarily. A bankruptcy attorney ensures exemptions are applied correctly for your situation.
Yes. Exemption amounts may be updated by statute or adjusted for inflation, so it’s important to confirm current figures before filing.
Bankruptcy exemptions give people in Wisconsin a way to protect essential property while managing overwhelming debt. Whether it’s your home, your retirement savings, or everyday household items, exemptions are there to ensure you can move forward with stability. Because Wisconsin allows you to choose between state and federal exemptions, understanding both systems is crucial.
If you are considering bankruptcy, working with a Wisconsin bankruptcy lawyer ensures you make the right decisions and protect as much as possible. Debt Advisors Law Offices has extensive experience guiding Wisconsin residents through bankruptcy and helping them understand how exemptions apply.
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.
