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Voluntary Amortization of Debts as described in
Wisconsin Statue 128.21

This statute allows residents of Wisconsin, who are wage earners, to petition the Court to aid them in rescheduling their debts. The debtor can petition to reschedule their debts for a period of no more than 3 years. This petition is NOT BANKRUPTCY!  There are, however, some similarities to a Chapter 13.  The process is as follows:

  • The debtor’s attorney must submit a Petition to the Circuit Court for the County in which they live. Typically, there are no hearings in these cases, therefore, there are no Court appearances. The Court appoints a Trustee to oversee the case and issues a temporary Stay of Collections.  This means that creditors are to stop their collection efforts after they receive their official notice of the action.   Creditors are also prohibited from garnishing wages, however, the Statute does allow the creditor to pursue a legal judgment.
  • The Trustee reviews the debtor’s financial information to insure that this action can be funded over a period not to exceed 36 months.  The Trustee then notifies the creditors listed in the petition and sets up a date by which the creditor must verify his balance.   A plan is then developed showing how each creditor will be paid.  The plan is written with the assumption that no additional interest or late fees will be assessed to the balance that was reported at the meeting of creditors.
  • The Trustee issues a report to the Court asking that the action be continued and that the temporary Stay of Collection be made permanent. The Court has the right to reject, modify or approve the plan that is submitted by the Trustee.  The final Order approving the plan will state that the creditors should assess no additional interest or late fees.
  • Payments on the plan are usually made via wage assignment to the Trustee; however, voluntary payments can be made.  If a debtor falls 30 days behind on their plan, the Trustee must report the delinquency to the Court.   If the plan can be brought current within 30 days the Trustee can ask that the plan be continued.  If the plan can not be brought current within 30 days, the Trustee must ask for dismissal of the action.  If the action is dismissed the Trustee notifies each creditor that the Stay of Collections has been lifted. Creditors are then free to continue collection procedures with their full rights restored.

The Amortization filing is a win - win situation for all parties involved. The debtor repays his creditors without the threat of legal action. The creditor receives payment for 100% of the money that was owed to the debtor at time of filing.

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