This is a Wisconsin-specific follow-up to a post we did recently on a U.S. Supreme Court ruling regarding bankruptcy exemptions.
As we explained in our March 6 post, the Supreme Court has held that the homestead exemption in a Chapter 7 bankruptcy applies as a shield against creditors even if the debtor tried to game the system by placing a fraudulent lien on his property.
In this post, we will take note of some of the basic exemptions available in bankruptcy cases under Wisconsin law.
Let’s be clear, at the outset, about the interplay between federal law and state law here. Bankruptcy law is federal law. Whether you’re filing under Chapter 7, Chapter 13, Chapter 11 or some other less-known provision of bankruptcy law, you will be proceeding under federal law.
But in Wisconsin as in other states, state law provides exemptions for certain types of property in bankruptcy proceedings. If property is exempt, that means it is beyond the reach of creditors.
The homestead (residential property) exemption considered by the Supreme Court is only of these exemptions. There are a number of others.
In Wisconsin, exempt property may include:
• Bank deposits
• Personal property
• Motor vehicles
• Pension and retirement benefits
• Workers’ compensation
• Unemployment compensation
• Veterans’ benefits
• Burial funds
There are also other types besides those on the above list.
Of course, the exact application of these exemptions can raise many definitional questions in specific cases. And the application of exemptions also varies from state to state. This is why it makes sense to discuss your case with a bankruptcy attorney.
Source: U.S. Courts.gov, “What are Wisconsin’s Exemptions?” Accessed March 26, 2014