Filing Bankruptcy in Wisconsin: Means Test, Exemptions, and Fees

Filing for bankruptcy in Wisconsin means choosing among Chapter 7, Chapter 13, or Chapter 11 of the federal Bankruptcy Code, completing two required education courses, and deciding whether to protect your property under Wisconsin’s exemptions or the federal set. A straightforward Chapter 7 case runs about four to six months and costs $338 in court fees; Chapter 13 restructures debt over three to five years for $313 in court fees. Attorney fees are separate, and your choice of exemptions can save or cost you tens of thousands of dollars depending on what you own.

Which Chapter Fits Your Situation

Three chapters are available, and they work very differently.

Chapter 7 wipes out most unsecured debts, including credit card balances and medical bills, in roughly four to six months. A court-appointed trustee reviews your assets, sells anything not covered by an exemption, and distributes the proceeds. In practice, most Chapter 7 cases are “no-asset” cases where exemptions cover everything the filer owns. You have to pass a means test to qualify.

Chapter 13 lets you keep all your property while repaying creditors over three to five years under a court-approved plan. You need regular income to qualify, your unsecured debts must stay below $526,700, and secured debts must stay under $1,580,125.¹ Chapter 13 is particularly useful if you are behind on your mortgage, because the plan lets you catch up on arrears while making your regular monthly payments going forward. Remaining qualifying unsecured debts are discharged when you complete the plan.

Chapter 11 is designed primarily for businesses that want to restructure debts while continuing to operate. The filer usually stays in control as a “debtor in possession,” running the business while developing a reorganization plan that creditors and the court must approve.² Individuals whose debts exceed the Chapter 13 limits can use Chapter 11 too, though the complexity and cost make personal filings rare.

Qualifying for Chapter 7: The Means Test

The means test is the gatekeeper for Chapter 7. It compares your household income over the past six months to the median income for a household your size in Wisconsin. Fall below the median and you qualify automatically. Current Wisconsin thresholds:³

One earner: $69,343
Two people: $87,938
Three people: $105,734
Four people: $129,964
Each additional person: add $11,100

If your income is above the median, the test moves to a second step that subtracts allowed living expenses from your monthly income to calculate disposable income. Significant leftover disposable income creates a “presumption of abuse” that blocks Chapter 7 and pushes you toward Chapter 13. Allowed expenses follow IRS standards and cover housing, transportation, food, healthcare, and childcare.

What You Get to Keep: Wisconsin or Federal Exemptions

Exemptions decide what you keep in bankruptcy. Wisconsin is one of a minority of states that lets filers choose between state exemptions and the federal set. You must pick one list or the other; mixing items from both is not allowed. Comparing both lists against your actual property is one of the most important steps in the process.

Wisconsin Exemptions

The Wisconsin homestead exemption protects up to $75,000 of equity in your primary residence. If spouses file jointly, each can claim a $75,000 homestead exemption.⁴ Other commonly used state exemptions include $12,000 for household goods and furnishings, $4,000 for a motor vehicle, and $15,000 for business equipment and tools of the trade. Retirement accounts, Social Security benefits, and certain life insurance policies are also protected.

Federal Exemptions

Federal exemptions use different dollar amounts. For cases filed between April 1, 2025, and March 31, 2028, the federal homestead exemption is $31,575, the motor vehicle exemption is $5,025, and the tools of trade exemption is $3,175.⁵ The federal list adds a wildcard exemption of $1,675 plus up to $15,800 of any unused homestead exemption, which can be applied to any property you choose.

Wisconsin’s state exemptions usually win if you have significant home equity or business tools, since the state homestead is more than double the federal amount and the tools of trade allowance is nearly five times higher. If you rent and own no home, the federal wildcard lets you redirect unused homestead protection toward other assets, which can be the better deal for renters with cash savings or a vehicle worth more than $4,000.

Residency Rule for Exemptions

You cannot pick Wisconsin’s exemptions just because you file here. Under 11 U.S.C. § 522(b)(3), you must have lived in Wisconsin for at least 730 days (two years) before filing to use Wisconsin’s exemptions.⁵ If you moved to Wisconsin more recently, you use the exemptions of the state where you lived for the majority of the 180 days before that two-year window.

Debts That Bankruptcy Will Not Erase

Bankruptcy does not wipe out every debt. These survive even a successful discharge:⁶

Child support and alimony. All domestic support obligations continue, and the automatic stay does not pause wage garnishment or tax refund interception for support.
Most student loans, unless you file a separate adversary proceeding and prove “undue hardship.”
Recent income taxes. The debt generally must be at least three years past due from the return due date, the return must have been filed at least two years before the petition, and the IRS must have assessed the debt at least 240 days before filing. Tax debts failing any of these conditions survive.
Debts from fraud or intentional harm, if the creditor asks the court to declare them nondischargeable.
Personal injury or death caused by driving under the influence.
Court-ordered fines and most government penalties.

Chapter 13 actually discharges a few things Chapter 7 does not, including debts from willful property damage, debts incurred to pay nondischargeable taxes, and certain obligations from divorce property settlements.⁶ That broader discharge is one reason some filers choose Chapter 13 even when they qualify for Chapter 7.

Where and How to File

Wisconsin has two federal bankruptcy districts: the Eastern District based in Milwaukee and the Western District based in Madison. You file in the district where you have lived for the greater part of the 180 days immediately before filing, under 28 U.S.C. § 1408.⁷

Start by gathering pay stubs, tax returns for the past two years, bank statements, a complete list of debts, and a complete list of property you own. That information feeds into the petition and supporting schedules.

Court Fees

Court filing fees break down as follows:⁸

Chapter 7: $338 ($245 filing fee, $78 administrative fee, $15 trustee fee)
Chapter 13: $313 ($235 filing fee, $78 administrative fee)
Chapter 11: $1,738 ($1,167 filing fee, $571 administrative fee)

Chapter 7 filers who cannot afford the fee can apply to have it waived entirely, and filers in any chapter can request to pay in installments.⁹ Attorney fees are separate. In Wisconsin, a straightforward Chapter 7 case typically runs between $1,200 and $3,000 in legal fees. Chapter 13 fees tend to be higher because the case lasts longer.

Required Credit Counseling Before You File

You must complete a credit counseling course from a U.S. Trustee-approved agency within 180 days before filing your petition.¹⁰ The course covers budgeting, debt management options, and alternatives to bankruptcy. It can be taken online, by phone, or in person, and runs about 60 to 90 minutes.¹¹ You get a certificate of completion that has to be filed with your petition. Filing without it can get your case dismissed.¹²

What Happens After You File

The Automatic Stay

The moment your petition is filed, a federal court order called the automatic stay stops most collection activity against you. Creditors cannot call you, sue you, garnish your wages, foreclose on your home, or repossess your car while the stay is in effect.¹³ For many filers this immediate relief is the most valuable part of the process.

The stay has limits. It does not stop criminal proceedings, and it does not pause actions tied to domestic support obligations. Child support wage garnishment, tax refund interception for support arrears, and license suspensions for nonpayment of support all continue.¹³ Divorce proceedings can continue too, except for disputes over how to divide property that is part of the bankruptcy estate. Secured creditors can ask the court to lift the stay if you are not making payments or if the collateral is losing value.

The 341 Meeting of Creditors

Within 21 to 40 days after a Chapter 7 filing (or 21 to 50 days for Chapter 13), the trustee holds a meeting called the 341 meeting. Despite the name, creditors rarely show. The trustee runs it and asks you questions under oath about your financial disclosures: income, assets, debts, recent transactions. The goal is to verify your paperwork.

You attend in person or by phone as the court directs. Bring a government-issued photo ID and proof of your Social Security number. The meeting is usually brief if your schedules are complete and accurate. If the trustee spots a problem, they may continue the meeting to a later date and ask for more documents.

Debtor Education Course Before Discharge

After filing but before you can receive a discharge, you have to complete a second course called the debtor education or financial management course. This one is separate from the pre-filing credit counseling. In Chapter 7, you file your certificate of completion (Official Form 423) within 60 days after the first date set for the 341 meeting.¹⁴ In Chapter 13, you file it before making the last payment under your plan.

Skipping this course is a cliff. The court closes your case without a discharge, meaning you went through the whole process, paid the fees, took the credit hit, and still owe every dollar. It is one of the most avoidable mistakes in bankruptcy, and it happens more often than you would expect.

Mistakes to Avoid Before Filing

Paying Back Family or Favored Creditors

The trustee can claw back payments or property transfers you made before filing if they gave one creditor an unfair advantage. Payments to regular creditors can be recovered if made within 90 days before filing. Payments to “insiders” (family members, business partners, corporate officers) can be recovered if made within one year before filing.¹⁵ A classic trap: paying back $5,000 you owe your parents right before filing. The trustee can sue your parents to recover it and redistribute the money. The instinct to pay family first is natural, but doing it on the eve of bankruptcy creates a legal mess for everyone involved.

Fraudulent transfers, where you moved assets to someone else to keep them away from creditors, can be reversed going back two years under federal law. Some states allow a longer lookback. The trustee does not need to prove you intended fraud if the transfer happened while you were insolvent and you received less than fair value in return.

Co-Signed Debts

If someone cosigned a loan with you, your bankruptcy puts them at risk. How much depends on which chapter you file.

In Chapter 7, the automatic stay protects only you. Your co-debtor has no protection, and creditors can go after them immediately for the full balance. If a parent cosigned your car loan and you discharge it, the lender can turn to your parent for the remaining amount.

Chapter 13 provides a co-debtor stay under 11 U.S.C. § 1301 that temporarily shields co-debtors on consumer debts while your plan is active.¹⁶ The protection has holes. A creditor can ask to lift it if your plan does not propose to pay the debt in full, if the co-debtor actually received the benefit of the loan, or if the creditor would be irreparably harmed.

Credit Report Impact and Filing Again

A Chapter 7 bankruptcy stays on your credit report for 10 years from the filing date. A Chapter 13 stays for seven years from the filing date. The hit to your credit score diminishes over time, especially as you rebuild with responsible credit use.

If you need to file again, federal law imposes waiting periods between discharges:¹⁷

Chapter 7 after a prior Chapter 7: eight years from the earlier filing date
Chapter 13 after a prior Chapter 7: four years from the earlier filing date
Chapter 7 after a prior Chapter 13: six years, unless the earlier plan paid 100% of unsecured claims or at least 70% in a good-faith best-effort plan
Chapter 13 after a prior Chapter 13: two years from the earlier filing date

These windows run from the filing date of the prior case, not the discharge date. Filing a new case before the waiting period runs does not stop the filing itself. It stops you from receiving a discharge, which is the whole point.

1
United States Courts. Chapter 13 Bankruptcy Basics
2
United States Courts. Chapter 11 Bankruptcy Basics
3
United States Department of Justice. Census Bureau Median Family Income By Family Size
4
Wisconsin State Legislature. Wisconsin Statutes 815.20 – Homestead Exemption
5
Office of the Law Revision Counsel. 11 USC 522 – Exemptions
6
United States Courts. Discharge in Bankruptcy
7
Office of the Law Revision Counsel. 28 USC 1408 – Venue of Cases Under Title 11
8
Office of the Law Revision Counsel. 28 USC 1930 – Bankruptcy Fees
9
Legal Information Institute. Federal Rule of Bankruptcy Procedure 1006 – Filing Fee
10
United States Bankruptcy Court, District of Columbia. Notice to All Debtors About Prepetition Credit Counseling Requirement
11
United States Department of Justice. Frequently Asked Questions – Credit Counseling
12
United States Department of Justice. Credit Counseling and Debtor Education Information
13
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
14
United States Courts. Official Form 423 – Certification About a Financial Management Course
15
Office of the Law Revision Counsel. 11 USC 547 – Preferences
16
Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor
17
Office of the Law Revision Counsel. 11 USC 727 – Discharge