Voluntary Amortization of Debts

As stated above, the process for filing under Chapter 128 is much less complex than filing for bankruptcy. There are basically two requirements for a debtor to qualify to file under Chapter 128. First, the debtor must be an adult resident of the state of Wisconsin. Second, the debtor must have his/her principal source of income consist of wages or salary.  

Unlike the Bankruptcy Code, Chapter 128 proceedings do not require the debtor to include all debts. Instead, debtors may pick and choose which debts to include and which debts to keep out of the Chapter 128. Nearly all types of unsecured debts can be included in Chapter 128. Common types of unsecured debts include debts from credit cards, utility bills, medical bills, payday loans, and deficiencies. Secured debt generally cannot be included in Chapter 128. Some common types of secured debt include mortgages and car loans. The law does give a secured creditor the option to be included and thus it is up to the secured creditor as to whether they want to be included in Chapter 128.

Filing under Chapter 128 provides many of the same protections as filing under the Bankruptcy Code. Once filed, Chapter 128 prohibits creditors from executing any attachments on the debtor’s property. In addition, Chapter 128 prohibits creditors from garnishing wages or from attempting to collect on a debt that is included in the Chapter 128 petition. Chapter 128 also stops future interest from accruing on any debts that are included in the petition.