Is there an alternative to filing bankruptcy?

Yes! Chapter 128 of the Wisconsin Statutes is similar to a Chapter 13 Bankruptcy. A Chapter 128 is a repayment plan where you can repay your unsecured debts (any or all of them) in affordable monthly payments spread over three years.

Nearly all unsecured debts can be put into a Chapter 128 repayment plan. A Chapter 128 repayment plan will stop interest and puts you in control of how much you pay each month.

Examples of these debts include judgments, credit cards, collection accounts, medical bills, dental bills, WPS or WE Energy bills, water bills, and even late rent. You will make one payment and a court-appointed trustee will distribute this payment to the creditors.

In most situations, you will meet with an attorney for a consultation to determine if a Chapter 128 or a bankruptcy is right for you, and one more time to sign the 128 documents.  The attorney will then file the 128 with the Court.

Bankruptcy Similarities:

• The 128 offers the same protection as the bankruptcy automatic stay where creditors cannot call you, collect any additional funds from you, sue you in court or harass you.
• A Chapter 13 Bankruptcy is 3 to 5 years in length. The 128 concludes after 3 years (36 months).
• The creditors have to accept the plan and once filed there is immediate relief.
• The 128 will stop a wage garnishment by a judgment creditor.

Bankruptcy Differences:

• There is no hearing to attend, and the entire process is out of court. In a Bankruptcy, Debtors are required to attend a 341 Meeting.
• The 128 has no prepayment penalty. If you have additional funds the 128 can be finalized at any time with additional payments.
• The 128 is flexible compared to the Chapter 13 Bankruptcy that has rules set by Federal Bankruptcy Code.
• The Chapter 128 does not provide for secured debts such as house and car loans.
• The Chapter 128 is fairly inexpensive compared to a Bankruptcy.
• In the Chapter 128 you can include all of your debts of some of your debts. You can pick and choose which debts are in the plan. In a Bankruptcy ALL debts have to be listed.
• No debts are discharged as they are in a Bankruptcy but the debts will be paid off through the plan.

The Chapter 128 is an excellent tool that provides for quick and immediate relief. The first step is to decide what is right for your specific situation.