Milwaukee, WI Bankruptcy Law Blog

Wednesday, March 14, 2018

Wisconsin Bankruptcy Exemptions Examined

Can I keep my home in a Chapter 7 bankruptcy?

Chapter 7 bankruptcy allows individuals burdened by overwhelming debt to eliminate their debt and start anew financially. While Chapter 7 can be a lifeline for struggling Americans, it does come with some potential drawbacks. Bankruptcy filers could potentially lose some of their property in the bankruptcy action. Before filing for bankruptcy, you will want to examine what property is exempt from seizure in Wisconsin. Our Milwaukee Chapter 7 bankruptcy lawyer offers an overview of exempt property in the state below.

Exempt vs. Non-exempt Property in a Chapter 7 Bankruptcy

When you file for bankruptcy under Chapter 7 to secure protection from your creditors, you should expect that you may need to turn over a portion of your assets to form part of your bankruptcy estate. The bankruptcy trustee will be charged with managing the bankruptcy estate and selling property within it to raise money to repay your creditors. Fortunately, Chapter 7 filers need not turn over all of their assets. Bankruptcy laws allow filers to keep a certain amount of property which is referred to as exempt property. Exempt assets generally consist of those assets that are necessary for living and working. Each state has its own list of property that will be considered exempt. In Wisconsin, the following property will not be subject to seizure in a Chapter 7 bankruptcy:

  1. Your Homestead: Wisconsin law allows you to exempt up to $75,000 of value in your personal residence or homestead. Couples can exempt up to $150,000. If your equity in your home exceeds the exemption allowances, the home may be subject to a partial lien by the mortgage holder.
  2. Your vehicle: You can exempt your vehicle up to $4,000 in Wisconsin. Cars valued at over this amount may be seized by the trustee.
  3. Personal property: Items such as your clothing, furniture, electronics, appliances, and other household items will be exempt in WI up to $12,000 in value. Items of value exceeding this amount may be seized.
  4. Life insurance proceeds: Wisconsin law exempts life insurance proceeds that the debtor will receive, with court approval.

These are just a few of the may property exemptions set out under Wisconsin law.  Chapter 7 filers additionally have the option of claiming the federal exemptions. Anyone considering filing for bankruptcy should meet with a bankruptcy attorney for help determining eligibility.

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