Many people who need bankruptcy relief do not seek help from an attorney based on one very big misconception: the belief that they will lose everything. This is simply not true. Bankruptcy law allows you to protect certain property from creditors under exemption statutes.
When you file for bankruptcy in Wisconsin, you have a choice between using the state or federal exemption schedule. We will cover the Wisconsin exemption schedule in this post.
Chapter 815 of the Wisconsin Statutes enumerates the exemption schedule. You should be aware that there are dollar limits that apply to certain exemptions. The “aggregate value” is based on the equity you have in the property. For example, if you have a car valued at $10,000 secured by a loan with an unpaid balance of $6,000, you would have $4,000 in equity.
What assets can you keep?
- Personal property up to an aggregate value of $12,000, like furniture, clothing, jewelry, firearms, appliances or pets
- Motor vehicles up to $4,000 in value plus any unused portion of the personal property limit
- Life insurance policies and proceeds
- Personal injury awards up to $50,000
- Cash in bank accounts up to $5,000
- Retirement benefits, including pensions, 401(K)s, IRAs, stock bonuses or profit sharing plans
- Disability benefits under Social Security Disability Insurance or Supplemental Security Income
- 529 college savings plans
- Alimony or child support
- Certain business and farm property
- Burial provisions
These are only basic guidelines. The exact value of the property you may keep depends on your individual financial situation. You should always discuss your individual financial situation with an attorney to ensure that you choose the best option and are able to maximize its benefits.