For many people who are facing serious debt problems, bankruptcy is not their only option. For example, there is a law in Wisconsin that allows residents to pay back unsecured debt over a 36-month period of time.
Therefore, it may be a good option for people who are in over their heads with debt and want to pay back what they owe but need a structured plan in place to regain control over their finances.
How Chapter 128 works
The law is Chapter 128, and it is similar to filing for Chapter 13 bankruptcy but the process is much simpler. However, Chapter 128 can also be expensive, so it’s important to meet with an experienced bankruptcy lawyer to determine if the process makes sense for you.
As the State Bar of Wisconsin explains, Chapter 128 is not a new law. In fact, it has been around for many years. But few people who are facing serious debt problems know that it is an option.
Most types of unsecured debt can be restructured under Chapter 128, including credit card bills, late rent, medical and dental bills, civil judgments, utility bills, and fines imposed by the state of Wisconsin.
An automatic stay goes into place
After filing for debt restructure under Chapter 128, an automatic stay goes into place against the filer’s creditors, stopping the interest from accruing on credit cards and other debts. The creditors are also barred from continuing to try to collect the debts from the filer.
This is one of the main benefits of Chapter 128. It can be extremely helpful for people who are overwhelmed by debt but could get back on track financially after 36 months without additional interest accruing.
The repayment plan must be approved by the court. A trustee appointed by the court oversees the repayments that are made to the creditors over the 36-month period.
For more information, talk to an experienced bankruptcy attorney in your area. While Chapter 128 isn’t the best solution for everyone in serious debt, it should be one of the first options explored for Wisconsin residents who need help regaining control over their finances.