Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
Filing bankruptcy does not mean you lose everything you own. Bankruptcy exemptions let you protect certain property from creditors, including your home, car, household items, and some retirement accounts.
Wisconsin residents may be able to choose between Wisconsin exemptions and federal exemptions. The better choice depends on what you own, how much equity you have, and your financial situation.
A Wisconsin bankruptcy attorney can review your assets and explain which exemptions may apply to your case.
Bankruptcy exemptions are rules that protect certain property when you file bankruptcy. They allow you to keep eligible assets instead of using them to repay creditors.
The amount you can protect depends on:
For example, a vehicle exemption may protect your equity in your car, but it does not remove your car loan.
An exemption protects your equity. It does not cancel your mortgage, car loan, or other valid debt.
In Chapter 7, property that is not protected may be sold by the trustee. In Chapter 13 , you usually keep your property while making payments through a court-approved plan.
Wisconsin bankruptcy exemptions can protect different types of property, including your home, vehicle, personal belongings, bank accounts, retirement funds, and some business assets.
Common Wisconsin exemptions include:
| Property |
Wisconsin Exemption |
| Homestead | Up to $75,000 in qualifying equity |
| Household and personal goods | Up to $12,000 |
| Motor vehicle | Up to $4,000 in equity |
| Personal bank deposits | Up to $5,000 |
| Business or farm property | Up to $15,000 |
| Certain retirement benefits | Protection varies |
For a home, the exemption applies to your equity, not the property’s full value. For example, a $250,000 home with a $210,000 mortgage has around $40,000 in equity before other costs or liens.
The amount you can protect depends on the property and exemption system you choose.
Wisconsin residents may be able to use the federal bankruptcy exemptions instead of Wisconsin’s exemptions. The federal rules are set out in 11 U.S.C. § 522.
You generally have to stick with one set of exemptions. For example, you cannot use a Wisconsin exemption for your home and then switch to a federal exemption for your car.
Federal law has a 730-day residency rule, so if you recently moved to Wisconsin, you may have to use the exemption rules from the state where you lived before.
For cases filed on or after April 1, 2025, some federal exemption amounts are:
|
Property |
Federal exemption |
| Home | $31,575 |
| Motor vehicle | $5,025 |
| Household goods | $800 per item, up to $16,850 |
| Jewelry | $2,125 |
| Tools of trade | $3,175 |
| Basic wildcard | $1,675 |
| Extra wildcard | Up to $15,800 |
| Traditional and Roth IRAs | Up to $1,711,975 |
The federal wildcard can help protect property that does not fall under another exemption. This can help if you don’t have much home equity but have other property you want to protect.
There is no single answer for every person. The better exemption system depends on what you own and how much equity you have.
Wisconsin exemptions may help people with significant home equity because of the higher homestead protection. Federal exemptions may be useful for people who need more protection for other types of property.
Before choosing, make a list of:
Comparing these details can help show which option may protect more of your assets.
Bankruptcy exemptions work differently depending on whether you file Chapter 7 or Chapter 13.
In Chapter 7, exemptions determine which property the trustee can protect. The trustee reviews your assets and claims exemptions. If property is fully protected, there may be nothing to sell. If some value is not protected, the trustee may consider selling the property.
The trustee looks at:
When filing, you must list your property, debts, income, and exemptions. The Wisconsin bankruptcy process includes these requirements.
In Chapter 13, exemptions still matter, but you can keep your property while making payments through a court-approved repayment plan. If you have property that would not be protected in Chapter 7, that value may affect how much you pay to unsecured creditors through the plan.
Many retirement accounts are strongly protected in bankruptcy. However, the rules depend on the account type.
Federal law protects many qualified retirement plans. Traditional and Roth IRAs have a federal bankruptcy limit of $1,711,975 under current limits. Other retirement accounts may follow different rules.
If you have multiple retirement accounts, review the rules for each account before filing.
Bankruptcy exemptions protect certain property from creditors and may help you keep assets like your home, car, and retirement accounts.
You may keep property protected by Wisconsin or federal exemptions, including certain home equity, vehicles, personal items, and retirement funds.
Neither is always better. The right choice depends on your assets, equity, and financial situation.
Often yes. Whether you keep them depends on your equity, exemptions, loans, and other bankruptcy rules.
No. Exemptions protect property from creditors but do not eliminate valid loans or liens.
Choosing the right bankruptcy exemptions can affect what property you keep when filing Chapter 7 or Chapter 13. Reviewing your assets, equity, and available exemptions before filing can help you understand your options.
If you are considering bankruptcy , contact us for a free consultation. We can review your situation and help explain which exemptions may 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.
