Wisconsin Chapter 7 Bankruptcy Laws

• Wisconsin happens to be one of the few states that give residents the option to claim federal exemptions when filing for Chapter 7 bankruptcy. A debtor files for Chapter 7 bankruptcy when he can no longer pay his bills and has no means to pay them in the foreseeable future. In this type of filing, the debtor's assets are sold to pay his creditors. He does, however, get to keep some of his assets.
  
  

Chapter 7

• When a debtor files for Chapter 7 bankruptcy, a trustee is appointed to oversee his case. The trustee's role is to make sure that the debtor's creditors get paid as much as possible. Although a Chapter 7 debtor has only a few assets, some of those assets can be used to pay off creditors. The debtor, trustee and creditors will meet at the first meeting of creditors, where the trustee will obtain the debtor's financial records. The debtor swears, under oath, that he has given a complete accounting of his finances. Once the debtor's property is sold and the creditors paid to the trustee's satisfaction, the debtor may receive a discharge from the bankruptcy court.
  
  

Wisconsin Exemptions

• A state would be going against public policy if it did not allow its residents to exempt some property that they own. The purpose of allowing exemptions is to not interfere with the debtor's livelihood and to prevent the debtor from becoming a public charge. The state of Wisconsin allows for the following exemptions: occupied property up to $40,000; household goods and furnishings, keepsakes, clothing, jewelry, books, appliances, musical instruments, firearms, animals, sporting goods up to the value of $5,000; burial provisions; motor vehicles up to $1,200; personal injury recoveries up to $25,000; tenant's lease or stock options in a housing co-op; lost future earnings recoveries and wrongful death recoveries needed for support; wages used to purchase savings bonds; federal disability insurance benefits; life insurance proceeds; retirement benefits; military pensions; social service payments; unemployment payments; veterans benefits; workers' compensation; alimony and child support; property of business partnership; business and farm property up to $7,500; and 75 percent of wages that have been earned but not yet paid. Consult a listing of the Wisconsin state bankruptcy exemptions for clarification.
  
  

Federal Exemptions

• If the debtors opts to claim the federal exemptions, the debtor will be allowed to keep: his home valued up to $20,200; life insurance payments; unmatured life insurance contracts; life insurance policies with loan value of to $10,775; alimony and child support; pensions and retirement benefits; a total of $10,775 in household goods; health aids; jewelry up to $1,350; a motor vehicle up to $3,225; personal injury recovery payments up to $20,200; lost earnings payments; and tools of the debtor's trade up to $20,200. If you want to claim any of these exemptions, consult the federal bankruptcy exemption law. The figures given are as of 2010 and change every three years.