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. Fortunately, Wisconsin’s homestead exemption is designed to help homeowners safeguard their primary residence and a portion of their home equity.
If you’re considering bankruptcy in 2025, it’s crucial to understand how Wisconsin’s homestead exemption works, how much protection it offers, and the specific rules that apply to Chapter 7 and Chapter 13 bankruptcy. This guide will provide an in-depth breakdown of everything you need to know to navigate bankruptcy while keeping your home secure.
Wisconsin’s homestead exemption is a legal provision stopping creditors from seizing a portion of your home’s equity when you file for bankruptcy. The law ensures that individuals struggling with debt aren’t left homeless due to financial difficulties.
The homestead exemption allows a person to shield up to $75,000 of home equity if filing alone and up to $150,000 if married and filing jointly. This exemption applies only to your primary residence.
The law doesn’t protect rental properties, vacation homes, and investment properties.
For many homeowners, this exemption can mean the difference between keeping their home or having it liquidated in a bankruptcy proceeding. However, understanding how home equity is calculated and how this exemption applies to different types of bankruptcy is essential.
To claim the Wisconsin homestead exemption, you must meet certain conditions:
The most crucial factor is determining how your home’s equity aligns with the exemption limits when you file.
Wisconsin’s homestead exemption is relatively generous compared to the federal option. Homeowners filing for bankruptcy in Wisconsin can choose between:
|
Aspect |
Wisconsin State Exemption |
Federal Exemption |
| Homestead Exemption Amount | $75,000 (single) / $150,000 (married) | $27,900 (single) / $55,800 (married) |
| Motor Vehicle Exemption | $4,000 | $4,450 |
| Personal Property Exemption | $12,000 | $14,875 |
| Wildcard Exemption | None | $1,475 plus unused homestead exemption up to $13,950 |
Because Wisconsin’s homestead exemption is much higher than the federal exemption, most residents choose the state system to maximize protection.
The way Wisconsin’s homestead exemption protects your home depends on the type of bankruptcy you file. Here’s how it works under each chapter:
Chapter 7 Bankruptcy- Often called liquidation bankruptcy, involves selling non-exempt assets to repay creditors. If your home equity is within Wisconsin’s homestead exemption limits, your home is protected. If it exceeds the exemption, the trustee may sell the home, give you the exempt portion, and use the rest to pay creditors.
Chapter 13 Bankruptcy- Allows filers to repay debts over 3–5 years while keeping their assets. The homestead exemption helps determine how much must be repaid to unsecured creditors. If your equity is fully covered, you won’t pay extra. If your equity is fully covered, you won’t pay extra. If it exceeds the limit, you may need to repay the difference through your plan.
Speaking with an experienced Wisconsin bankruptcy attorney can also help you navigate the process and make informed decisions about protecting your home.
As of 2025, there have been no major changes to Wisconsin’s homestead exemption limits. However, laws can change, so it’s important to stay informed.
Some homeowners also face judgment liens filed by creditors before bankruptcy. If such a lien impairs your homestead exemption, you may be able to remove it through a process known as lien avoidance.
If you’re weighing bankruptcy and worried about your home, consider these steps:
Yes. Wisconsin filers can select either system, but cannot combine them.
In Chapter 7, your home is safe if equity is within limits; in Chapter 13, the exemption affects repayment amounts while you keep your home.
In Chapter 7, the trustee may sell your home. In Chapter 13, you may need to repay the excess through your plan.
No significant changes as of 2025, but laws may evolve. Always check with an attorney for the latest updates.
Subtract mortgages or liens from your home’s value. For example, if your home is worth $200,000 and you owe $125,000, your equity is $75,000 fully protected if filing individually.
Bankruptcy can be stressful, but Wisconsin’s homestead exemption provides vital protection for homeowners. Whether you file under Chapter 7 or Chapter 13, knowing how the exemption works helps you plan smarter and safeguard your home.
If you’re considering bankruptcy and want to ensure you maximize your exemptions, the experienced team at Debt Advisors Law Offices is here to guide you. Schedule a free consultation with us and take the first step toward protecting your home and financial future.
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.
