Do I qualify to file a Chapter 128?
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.
What debts can I include in Chapter 128?
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.
What types of protections does filing under Chapter 128 provide?
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.
There are a few ways in which Chapter 128 differs from bankruptcy. Unlike bankruptcy, all debts included in the Chapter 128 petition must be repaid. Thus, a debtor cannot get a discharge of any debt from filing under Chapter 128. Another important difference is that creditors are still able to get a judgment against the debtor during Chapter 128. However, even if the creditor does get a judgment for the debt, the creditor cannot collect on the judgment pending the Chapter 128 proceedings.