Can I Keep My House if I File Bankruptcy in Wisconsin?
Filing for bankruptcy is never an easy decision, but for many people struggling with overwhelming debt, it can provide a much-needed financial reset. One of the biggest concerns individuals have before filing is whether they will lose their home in the process. If you’re a Wisconsin homeowner wondering, “Can I keep my house if I file bankruptcy?” the answer depends on several factors—including the type of bankruptcy you file, the amount of equity in your home, and your ability to keep up with mortgage payments.
Wisconsin’s Homestead Exemption
The good news is that Wisconsin has laws designed to protect homeowners. The Wisconsin Homestead Exemption allows you to protect up to $75,000 of equity in your primary residence (or $150,000 for married couples filing jointly).
Equity is the difference between what your home is worth and what you owe on your mortgage. For example, if your home is worth $200,000 and you owe $140,000, you have $60,000 in equity. In this case, your home would be fully protected under Wisconsin’s exemption limits.
If your equity exceeds the exemption amount, the bankruptcy trustee could, in theory, sell the property, pay off your mortgage, give you your exempted share, and distribute the rest to creditors. However, this situation is relatively uncommon, especially if you still have a sizable mortgage.
Chapter 7 bankruptcy vs. Chapter 13 Bankruptcy
The type of bankruptcy you file in Wisconsin plays a big role in whether you can keep your home.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, sometimes called “liquidation bankruptcy,” is designed to wipe out most unsecured debts, such as credit cards and medical bills. If your home equity falls within Wisconsin’s homestead exemption, you can usually keep your home as long as you continue making mortgage payments. However, if you are behind on your mortgage and cannot catch up, Chapter 7 bankruptcy may not stop foreclosure.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a reorganization bankruptcy that creates a repayment plan lasting three to five years. One of the biggest advantages of Chapter 13 Bankruptcy is that it can help you catch up on missed mortgage payments over time while still keeping your home. As long as you stick to your repayment plan and keep making future mortgage payments, your home is protected.
Keeping Your Home Depends on Your Payments
Regardless of which type of bankruptcy you file, your mortgage lender still has a secured claim on your house. Bankruptcy can discharge unsecured debts, but it does not eliminate your mortgage obligation. To keep your house, you must continue to pay your mortgage and property taxes.
Final Thoughts
So, can you keep your house if you file bankruptcy in Wisconsin? In most cases, yes—as long as your equity is within the state’s exemption limit and you can continue making mortgage payments. Chapter 13 Bankruptcy can even give you extra breathing room if you’re behind on payments.
Because every situation is unique, it’s important to speak with an experienced Wisconsin bankruptcy attorney. They can review your finances, explain how exemptions apply to you, and guide you toward the best path to protect your home and rebuild your financial future.
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