Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
When debt feels overwhelming, many people think bankruptcy is the only way forward. In Wisconsin, there is another option that has existed for decades: Chapter 128.
This state-specific program allows wage earners to repay certain debts without going through federal bankruptcy court. Understanding how it works, who qualifies, and how it compares to bankruptcy can help you make the right financial decision.
Chapter 128 is a repayment program established under Wisconsin Statutes Chapter 128. It is not bankruptcy but a court-supervised plan designed to help people pay back unsecured debts such as credit cards, payday loans, and medical bills. Unlike bankruptcy, you do not wipe out debts you commit to repaying them over time, usually within three years.
Only individuals who earn wages are eligible. Businesses cannot file under Chapter 128. Once you enter into this program, the court appoints a trustee to handle your payments and distribute them fairly among creditors.
“Unlike bankruptcy, Chapter 128 requires repayment of all debts included in the plan, typically over a three-year period.” – Wisconsin Statutes Chapter 128
For the text of the statute, you can review it directly on the Wisconsin State Legislature website.
Filing begins with a petition through the court. An experienced Milwaukee bankruptcy attorney reviews your financial situation to confirm if your debts qualify. Once accepted, several protections and rules apply:
This structure provides stability and breathing room for people with consistent wages who want to handle debt responsibly without entering bankruptcy.
Many people confuse Chapter 128 with bankruptcy. While both offer relief, the impact and requirements are quite different.
“The outcome of any case depends on its specific facts. Past results do not guarantee future outcomes.”
The cost of filing Chapter 128 varies by county but generally includes modest attorney and trustee fees. Compared to bankruptcy, it is often more affordable upfront.
Benefits include:
Limitations include:
This is often the right choice if you have steady income and primarily unsecured debts like credit cards or medical bills. It offers a structured repayment plan without the long-term impact of bankruptcy.
Bankruptcy may be a better fit if you are facing foreclosure or repossession of your home or vehicle. It can also provide relief if your debt load is too high to manage under a repayment plan.
For those with large secured debts such as mortgages or car loans, Chapter 7 or Chapter 13 bankruptcy may provide more complete protection than Chapter 128.
Because every financial situation is different, it is important to review your options with a knowledgeable attorney. Legal guidance helps determine whether Chapter 128 or bankruptcy best aligns with your financial goals.
Chapter 128 is only one path to debt relief. Other options include:
Each option has its own risks and benefits. Understanding Wisconsin’s unique debt relief program helps ensure you are not overlooking a less disruptive alternative.
| Feature | Chapter 128 Wisconsin | Chapter 7 Bankruptcy | Chapter 13 Bankruptcy |
| Type | State repayment plan | Federal liquidation | Federal repayment plan |
| Duration | Up to 36 months | 3–6 months | 3–5 years |
| Debts Covered | Unsecured (credit cards, medical) | Most unsecured | Unsecured + some secured |
| Impact on Credit | Less severe, shorter impact | Stays 10 years | Stays 7 years |
| Asset Risk | No asset liquidation | May liquidate non-exempt assets | Keep assets if payments made |
| Eligibility | Wisconsin residents, wage earners | Income means test | Regular income required |
Most unsecured obligations, such as credit cards, medical bills, and payday loans, can be included. Mortgages and vehicle loans are generally excluded.
Most repayment plans last up to 36 months, depending on how much debt you include and your income.
Yes. Once the court accepts the filing, an automatic stay goes into effect that halts most collection activity.
Yes, it appears on a credit report, but the effect is usually less severe than a bankruptcy case.
If you earn steady wages and have mainly unsecured debt, this repayment approach may be preferable to filing bankruptcy.
Chapter 128 offers a unique debt relief option for Wisconsin residents, allowing repayment of unsecured debts without filing bankruptcy. It provides important protections, pauses interest, and avoids asset loss. However, it has limits, secured debts are excluded, and repayment is still required.
Understanding whether Chapter 128, Chapter 7, or Chapter 13 is right for you depends on your financial circumstances. Professional legal advice ensures you make the most informed decision.
Debt Advisors Law Offices has extensive experience guiding Wisconsin residents through debt relief, including Chapter 128 and bankruptcy. If you are struggling with debt, exploring all available options with trusted legal support can help you move toward financial stability and peace of mind.
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.
