Bankruptcy Attorney Wisconsin: Chapter 7 vs 13, Exemptions & Means Test (2026)
Facing unmanageable debt, wage garnishment, or foreclosure in Wisconsin? This guide covers Chapter 7 versus Chapter 13, Wisconsin's choice between state and federal exemptions, the $75,000 per-owner homestead, Means Test thresholds, and the two federal courts that serve the state.
Navigating Debt Relief in the State of Wisconsin
From Milwaukee manufacturing and Madison health care to dairy farms and Northwoods small businesses, a layoff, medical bill or failed venture can push Wisconsin households into unsustainable debt. Federal bankruptcy law offers a lawful path to discharge debt or restructure it into a court-supervised plan.
Working with an experienced Wisconsin bankruptcy attorney is especially valuable here because Wisconsin is not an opt-out state. Filers may choose either the Wisconsin exemptions (Wis. Stat. 815.20 and 815.18) or the federal exemptions in 11 U.S.C. § 522(d), but not a mix of both, so the right choice depends on home equity, vehicle value and other assets.
Chapter 7 vs. Chapter 13: Choosing the Right Path
Chapter 7: Fresh Start Liquidation
Often called straight bankruptcy, Chapter 7 discharges qualifying unsecured debts such as credit cards, medical bills and personal loans in roughly 3 to 5 months. A trustee reviews your petition for non-exempt property. In Wisconsin the exemption menu you choose determines what is protected, so planning before filing matters.
- Discharges unsecured debts within roughly 90–120 days
- Requires passing the Means Test
- No mandatory debt repayment plan
Chapter 13: Wage Earner Restructuring
Designed for individuals with steady income who exceed Chapter 7 limits, owe non-dischargeable debt, or need to cure mortgage arrears. Chapter 13 sets a 3- to 5-year repayment plan, letting Wisconsin homeowners stop foreclosure, catch up on missed payments, and keep equity above the exemption cap by paying creditors its value over time.
- Curbs mortgage defaults and can stop a foreclosure sale
- Consolidates obligations into one monthly payment
- Protects non-exempt property that would otherwise be sold
Wisconsin's State-or-Federal Exemption Choice
Wisconsin has never opted out of the federal exemption scheme, so a debtor may elect the Wisconsin exemptions or the federal 11 U.S.C. § 522(d) exemptions, one complete menu or the other. Married couples filing jointly can generally each claim a full set of whichever system they choose. Review the choice with an attorney well before filing.
Homestead Exemption (Wis. Stat. § 815.20)
A resident owner's occupied homestead is exempt up to $75,000 per owner, so a married couple who jointly own and occupy the home can claim up to $150,000 combined. The protection covers equity, not full market value, and extends to sale proceeds for up to two years while the owner intends to buy another homestead. Federal limits on recently acquired homes can still apply.
Personal Property & Other Exemptions
Wisconsin does not provide a general dollar wildcard the way the federal list does. Its personal-property exemptions (Wis. Stat. § 815.18) include up to $4,000 in aggregate vehicle equity, a consumer-goods exemption of up to $12,000 that can be partly applied to a vehicle, plus tools of the trade, insurance, and protections for tax-qualified retirement accounts. Filers with little home equity sometimes prefer the federal list because of its larger general wildcard.
Key Wisconsin Bankruptcy Statutes & Rules
| Statutory Element | Wisconsin Rule & Federal Code |
|---|---|
| Exemption System | Wisconsin is not an opt-out state: debtors may elect Wisconsin exemptions or the federal exemptions in 11 U.S.C. § 522(d), but not both. |
| Homestead Exemption | Wis. Stat. § 815.20: up to $75,000 per owner for an occupied homestead. |
| Personal Property Exemptions | Wis. Stat. § 815.18: vehicle equity up to $4,000 in aggregate, consumer goods up to $12,000, tools of the trade, and retirement accounts. |
| The Automatic Stay | 11 U.S.C. § 362: halts foreclosure sales, repossessions, lawsuits and wage garnishments on filing. |
| Means Testing Period | 11 U.S.C. § 707(b): six-month historical income compared against Wisconsin median income. |
| Mandatory Credit Counseling | 11 U.S.C. § 109(h): briefing from a UST-approved agency within 180 days before filing. |
Source: Wisconsin Statutes §§ 815.18 and 815.20; U.S. Bankruptcy Code (Title 11). Dollar limits are adjusted periodically — confirm current figures with a licensed Wisconsin attorney.
Wisconsin Federal Bankruptcy Courts
Wisconsin has two federal bankruptcy districts: the Eastern District (Milwaukee) and the Western District (Madison, with an office in Eau Claire), assigned by county of residence. Use the city links below to find attorneys near you:
Frequently Asked Questions: Wisconsin Bankruptcy
Can I use federal bankruptcy exemptions in Wisconsin?
Yes. Wisconsin is not an opt-out state, so a filer may choose either the Wisconsin exemptions (Wis. Stat. 815.20 and 815.18) or the federal exemptions in 11 U.S.C. § 522(d). You must use one complete list and cannot combine items from both. An attorney can compare your home equity, vehicles and other assets under each list.
How much home equity does the Wisconsin homestead exemption protect?
Under Wis. Stat. § 815.20, an occupied homestead is exempt up to $75,000 per owner, so spouses who both own the home can claim up to $150,000 combined. It protects equity after mortgages and liens, not the full value of the home.
How does the Means Test determine Chapter 7 eligibility in Wisconsin?
The Means Test compares your average gross household income over the six months before filing against the Wisconsin median income for your household size. At or below the median, you generally qualify for Chapter 7. Above it, a second calculation of IRS-allowed expenses determines whether you have enough disposable income that Chapter 13 may be required.
How does the automatic stay protect Wisconsin debtors?
Under 11 U.S.C. § 362, filing a bankruptcy petition triggers an immediate injunction called the automatic stay. It halts collection calls, pending wage garnishments, lawsuits, foreclosure sales and vehicle repossessions as soon as the petition is filed, subject to the Bankruptcy Code's exceptions.
Which federal bankruptcy court handles my Wisconsin case?
Wisconsin has two federal bankruptcy districts: the Eastern District (Milwaukee) and the Western District (Madison, with an office in Eau Claire). Your case is filed in the district that covers your county of residence, and your attorney will advise on the 341 meeting of creditors.
Can taxes and student loans be discharged in a Wisconsin bankruptcy?
Income taxes can be discharged in Chapter 7 or Chapter 13 only if they satisfy the federal 3-2-240 rule (return due at least 3 years before filing, filed at least 2 years before, assessed at least 240 days before, and no fraud). Most federal and private student loans remain non-dischargeable absent a showing of undue hardship, and domestic support obligations are never discharged.
Related Legal Resources Near Wisconsin
Bankruptcy Attorney Minnesota Guide
Compare Wisconsin's exemption choice with neighboring Minnesota, another election state.
Bankruptcy Attorney Illinois Guide
See how neighboring Illinois handles bankruptcy exemptions.
Bankruptcy Attorney Michigan Guide
Review another Great Lakes state's exemption framework.
Bankruptcy Attorney Ohio Guide
Compare a nearby state's bankruptcy exemption rules.
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