Section 128 Explained
Wisconsin Statute Section 128 allows Wisconsin wage earners to consolidate most types of unsecured debt. Through 128 you can pay-off creditors, including credit cards, without interest, without late fees, and without bankruptcy. A 128 requires you to pay these obligations within a period of 3 years. The following types of debts are typically consolidated through 128: credit cards, unsecured personal loans, NSF checks, payday loans and medical bills. If you include a creditor in a 128, the balance you owe freezes and will not increase due to accruing interest or late fees. The creditor cannot sue you or try to collect while they are included in the Section 128.
F&Q - Section 128
No, Section 128 is not a form of bankruptcy. It will not be reported on your credit report or to credit bureaus.
Yes, Section 128 can stop both wage garnishments and utility disconnections.
Secured loans, such as car payments or mortgages, cannot be included in Section 128s. Section 128 is for unsecured debts only. If you need to protect your home or car, it may be best to discuss with an attorney about filing a Chapter 13 bankruptcy.