The State of Wisconsin offers its citizens an opportunity to repay unsecured debts through a voluntary plan under Section 128.21 of the Wisconsin Statutes.   The “Chapter 128” repayment plan is not a form of bankruptcy but instead is a method of debt consolidation which provides 36 months for repayment.  The balance due at the time the Chapter 128 case is filed will be the amount to be paid through the Chapter 128 case, without continued contractual interest after the date of filing.

A Circuit Court Judge will approve a Chapter 128 plan and appoint a Chapter 128 Trustee to administer the funds.  The Court Order will prevent included creditors from pursuing collection of the debt, like wage garnishment, while the Chapter 128 case is open.  Upon completion of the Chapter 128 plan, the Court will sign another Order which will prevent the included creditors from pursuing further collection of the debt in Wisconsin.

Most debts without collateral (unsecured debts) may be paid through a Chapter 128 case, including “payday loans.”  Income tax owed to the Internal Revenue Service may not be included for payment through a Chapter 128 case, but income tax owed to the Wisconsin Department of Revenue may be paid through Chapter 128.  Chapter 128 debt consolidation also permits you to choose which of your unsecured debts to include for payment.  Debts which may be readily resolved may be excluded from the Chapter 128 repayment plan.

If the monthly payment needed to repay your unsecured debts through a Chapter 128 case is reasonably affordable, then debt consolidation through Chapter 18 may be preferable to filing a bankruptcy case.