Maybe you have significant debt, but you’re not sure of whether you should file for bankruptcy. After all, filing for bankruptcy is a decision no one should take lightly.

What many people in Wisconsin don’t know, however, is that bankruptcy may not be the only option. In fact, a long-established but little-known Wisconsin statute provides for a helpful alternative to bankruptcy. That statute is called Chapter 128.

People with the following kinds of unsecured debt may qualify for Chapter 128:

  • Credit card debt
  • Medical bills
  • Rent payments
  • Payday loans
  • Utility bills
  • Speeding tickets

Examples of secured debts include car loans and mortgages, and these kinds of debts cannot be directly addressed through Chapter 128.

Here are the basics of how Chapter 128 works:

  • You or your lawyer must file a petition to reorganize your debts, along with a simple affidavit listing your unsecured debts. In that affidavit, you state that you will make regular payments in accordance with your repayment plan.
  • You work with a trustee to create a repayment plan lasting up to three years
  • Your petition, affidavit and repayment plan are submitted to the court for approval. This can actually be done without your ever going to court.
  • If the court approves these items, then a protective order will be issued, and this stops any wage garnishment or accrual of interest on your unsecured debts. The protective order can also stop your utilities from being shut off.
  • Over the course of your repayment plan, you send manageable monthly payments to your trustee.

Again, filing for and completing a Chapter 128 plan typically does not require you to go to court. Chapter 128 also differs from bankruptcy in that the filer is not required to file tax records or declare all income, assets and debts. You can declare only those unsecured debts you want to pay down.

The lawyers of Miller & Miller, LLC, help Wisconsin residents obtain debt relief. One of our previous articles has more on the Chapter 128 process and how it differs from bankruptcy.