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.
In Wisconsin, the homestead exemption allows single filers to protect up to $75,000 of equity in their primary residence, while married couples filing jointly can protect up to $150,000.
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.
You must meet specific criteria to claim the Wisconsin homestead exemption:
You can apply for the homestead exemption when filing for bankruptcy if you meet these conditions. The most crucial factor is determining how your home’s equity aligns with the exemption limits.
Wisconsin’s homestead exemption is relatively generous compared to federal exemptions. Homeowners filing for bankruptcy in Wisconsin have the option to choose between:
The table below highlights the key differences between Wisconsin’s homestead exemption and the federal exemption:
| 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 |
Wisconsin residents have the option to choose between the state’s exemption system and the federal bankruptcy exemptions; however, they cannot mix and match between the two.
Wisconsin’s homestead exemption is much higher than the federal exemption. Thus, most homeowners filing for bankruptcy in the state choose Wisconsin’s exemption system to maximize their protection.
The type of bankruptcy you file will determine how the homestead exemption protects your home.
Chapter 7 bankruptcy is commonly referred to as liquidation bankruptcy. It involves selling non-exempt assets to repay creditors. If your home equity is within the Wisconsin homestead exemption limits, your home is protected, and the bankruptcy trustee cannot sell it.
However, if your equity exceeds the exemption amount, the trustee may sell your home to pay off creditors. If this happens, the trustee will give you the exempted portion (either $75,000 or $150,000), and any remaining proceeds will be used to pay off debts.
Chapter 13 bankruptcy is a repayment plan allowing filers to restructure their debt and make payments over 3-5 years. Unlike Chapter 7, Chapter 13 bankruptcy does not require you to sell your home.
Instead, the homestead exemption helps determine the minimum amount you must repay to unsecured creditors. If the exemption fully covers your home equity, you won’t need to pay extra to keep your home under a Chapter 13 plan.
If your home equity exceeds the exemption, you may need to pay a portion of the excess through your repayment plan.
There have been no significant changes to Wisconsin’s homestead exemption limits as of 2025. However, laws can change. It’s essential to stay updated on any new legislation that may impact your bankruptcy case.
Some homeowners worry about judgment liens placed on their homes by creditors before filing for bankruptcy. If you have a lien on your home that would impair the homestead exemption, you may be able to remove it through a legal process called lien avoidance.
Wisconsin residents have the option to choose between the state’s exemption system and the federal bankruptcy exemptions; however, they cannot mix and match between the two.
If any new state or federal laws are introduced regarding exemptions, a bankruptcy attorney can provide guidance on how these changes may affect your home protection.
If you’re thinking about bankruptcy and want to protect your home, follow these steps:
The homestead exemption allows homeowners to protect a portion of their home equity from creditors when filing for bankruptcy. It ensures financial hardship doesn’t leave individuals homeless.
Yes, Wisconsin allows filers to choose between state or federal exemptions. However, you cannot mix and match exemptions from both systems.
In Chapter 7, your home is protected if your equity is within exemption limits. In Chapter 13, the exemption helps determine how much you must repay creditors while keeping your home.
In Chapter 7, the trustee may sell your home and give you the exempted portion. In Chapter 13, you may need to repay a portion of the excess equity through your repayment plan.
As of 2025, there have been no significant changes to Wisconsin’s homestead exemption laws. However, for the latest updates, you should consult an attorney.
Subtract any outstanding mortgage or liens from your home’s market value. If your home is worth $200,000 and you owe $125,000, your equity is $75,000. This amount is fully protected under Wisconsin’s exemption.
Filing for bankruptcy can be overwhelming. Luckily, Wisconsin’s homestead exemption offers vital protection for homeowners. Whether filing for Chapter 7 or Chapter 13 bankruptcy, understanding how exemptions work can help you make informed decisions and protect your home.
If you’re considering bankruptcy and want to ensure you maximize your exemptions, the experienced attorneys at Debt Advisors Law Offices can help. Get expert legal advice today to safeguard your home and take the next step toward financial relief.
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.
