Josephine Norton
Chapter 128 is a debt consolidation repayment plan through the court system that is available in Wisconsin. It is neither bankruptcy nor credit counselling, and it gives individuals 36 months to pay off debts that are not considered collateral, such as credit cards, medical bills, and personal loans. It is important to note that Chapter 128 is not recognised in the same way across all states, and creditors may mistakenly report it as bankruptcy. While it is a viable option for debt relief, it is recommended to consult with a knowledgeable attorney or trustee to understand the specifics of Chapter 128 and how it may impact loan options.
| Characteristics | Values |
|---|---|
| Chapter 128 | A debt consolidation repayment plan through the court system |
| Cost to file | Under $50 |
| Time to pay off items | 36 months |
| Items that can be included | Credit cards, medical bills, personal loans, and miscellaneous bills |
| Items that cannot be included | Student loans, taxes, and mortgages |
| Effect on credit score | Less negative than bankruptcy; stays on credit report for 7 years |
| Loan types | Not applicable |
What You'll Learn
Chapter 128 is a debt consolidation repayment plan
Chapter 128 is a Wisconsin state law that provides a legal framework for debt consolidation and repayment. It is a debt consolidation repayment plan that allows Wisconsin residents to repay their debts over time. Unlike federal bankruptcy options, Chapter 128 offers individuals a chance to reorganize their debts outside the federal bankruptcy system. It is not a bankruptcy, and creditors should not report it as one. However, many creditors do not understand what a 128 plan is and may incorrectly report it. This can be corrected by disputing the designation with the credit bureau.
The process of filing a Chapter 128 begins by submitting a petition with the county circuit court where the debtor resides. The petitioner must provide information about their financial situation, including details of their debts that they are seeking to repay. The court then appoints a trustee to oversee the case, and the trustee works with the petitioner to create a proposed repayment plan. The plan outlines how the debts will be consolidated and repaid over a fixed period, usually three years or 36 months.
Chapter 128 is a viable alternative for individuals struggling with debt, providing a structured and court-approved path to financial recovery. It is important to note that Chapter 128 is specific to Wisconsin, and other states may have different laws and procedures for debt consolidation or adjustment. It is recommended to consult with an attorney or financial advisor knowledgeable about Chapter 128 to determine the best course of action for your specific situation.
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It is not bankruptcy or credit counselling
Chapter 128 is a Wisconsin statute that allows Wisconsin residents to repay their debts over time. It is neither bankruptcy nor credit counselling. It is a debt consolidation repayment plan through the court system.
Chapter 128 is a way to restructure and repay your debts. It is not a way to eliminate them. You have to pay your debts in full, and you have three years to do so. Chapter 128 is a good option if you are facing wage garnishment or a levy on your bank account, as it can stop these things from happening. It can also help you avoid repossession or foreclosure, although it won't necessarily prevent them.
Chapter 128 is not as bad for your credit score as bankruptcy. While it will still be reported negatively, it will not stay on your credit report for as long as bankruptcy (7 years vs 10 years). Additionally, you have the option to continue paying some accounts outside of Chapter 128, which can help boost your credit score.
It is important to note that Chapter 128 is often misunderstood by creditors, who may incorrectly report it as bankruptcy. However, this can be disputed with the credit bureau. It is recommended to find an attorney who is knowledgeable about Chapter 128 and has experience working with a trustee in these cases.
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It costs under $50 to file
Chapter 128 is a unique provision under Wisconsin Statutes, not the federal bankruptcy code. It is a debt consolidation repayment plan through the court system that allows debtors to amortize problem debts through a scheduled repayment plan. It is not bankruptcy, and creditors should not report it as such.
The cost of filing Chapter 128 is under $50. The court filing fee is $31.50 in every Wisconsin county except Milwaukee County, where it is $35. There is an additional $20 electronic filing fee for the electronic filing of the required court documents.
The total upfront cost of filing Chapter 128 is between $250 and $300, plus the court filing fee. This upfront cost includes attorney fees and trustee administration expenses, which are also paid through the Chapter 128 plan. The rule of thumb is that there is about a $300 monthly payment for every $10,000 of debt included in the plan.
The Chapter 128 proceeding is a good option for people who are struggling to repay debt, giving them an opportunity to meet their obligations. However, bankruptcy may be the only option in some cases. If you are struggling with debt repayment, it is recommended to consult an experienced bankruptcy attorney. Many offer complimentary initial consultations to help you identify the best steps to take.
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It can help prevent foreclosure
Chapter 128 is neither bankruptcy nor credit counselling. It is a debt consolidation repayment plan through the court system that allows Wisconsin residents with a steady income to pay down their debts over a period of three years. This can include credit cards, medical bills, personal loans, and miscellaneous bills.
Chapter 128 can help prevent foreclosure by allowing you to keep up with your current mortgage payments and pay off any arrearages. It can also help you remove junior mortgages through lien stripping. This is only possible if you owe more money on your house than it is currently worth and if you have at least one junior mortgage.
Additionally, Chapter 128 can help prevent foreclosure by stopping creditors from garnishing your wages, bank accounts, or other debt collection methods. This gives you more flexibility to manage your finances and make timely mortgage payments.
While Chapter 128 may not directly stop foreclosure proceedings, it can provide the financial relief needed to help you stay on top of your mortgage payments and avoid foreclosure in the long run. It is important to note that Chapter 128 does not protect against lawsuits being filed by creditors or judgments issued against you in court.
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It can help with loan application denials
Chapter 128 is a debt consolidation repayment plan through the court system that is available in Wisconsin. It is not a bankruptcy proceeding or credit counselling, and it allows individuals to repay their debts over 36 months. This option is particularly useful for those who have been denied loans due to their financial situation.
While Chapter 128 will still negatively impact your credit score, it is not as detrimental as bankruptcy. Creditors often mistakenly report a Chapter 128 as bankruptcy, but this can be corrected by disputing the information with credit reporting agencies. A Chapter 128 plan will remain on your credit report for 7 years, whereas bankruptcy remains for 10 years.
Additionally, Chapter 128 provides individuals with the flexibility to continue paying some accounts outside of the plan according to the original contract terms. This can help maintain a positive credit history and potentially boost your credit score.
For those facing loan application denials, Chapter 128 can be a viable option to consolidate and repay debts without the long-term negative consequences of bankruptcy. It is important to consult with a knowledgeable attorney to understand the specifics of Chapter 128 and how it can help in your unique situation.
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Frequently asked questions
Chapter 128 is a debt consolidation repayment plan through the court system. It is neither bankruptcy nor credit counseling.
Bankruptcy is a long process that doesn't fit every situation. Chapter 128 gives you 36 months to pay off items that are not considered collateral debts, like credit cards, medical bills, personal loans, and miscellaneous bills. Student loans, taxes, and mortgages cannot be included in this plan.
It costs under $50 to file Chapter 128 with the court. The court filing fee is $31.50 in every county except Milwaukee County, where it is $35.
A Chapter 128 will not have as negative an effect on your credit score as bankruptcy because you are repaying the debt. However, creditors often mistakenly report a Chapter 128 as bankruptcy, which you can correct by disputing the information with credit reporting agencies.
Yes, it is possible to get a loan after filing Chapter 128. While your credit score may be impacted, it is not as severe as with bankruptcy, and you can take steps to rebuild your credit.
