Wisconsin Debt Relief: The Tools You Need to Escape the Debt Trap

Wisconsin Debt Relief

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The state of Wisconsin has approximately 5,895,908 living in it. The poverty rate is 10.8%, according to the latest census. This is slightly lower than the national average, which is 11.6%.

Overall, the average household income in Wisconsin is $63,293. For comparison, the real median household income in the United States is just over $70,000.

Are you eligible for debt relief?

If you’re a Wisconsin resident, DebtHammer may be able to help.

Wisconsin debt statistics

Here are the most recent debt statistics for Wisconsin:

Debt relief options for Wisconsin residents

There are several options available for Wisconsin residents seeking debt relief. These include:

  • Debt settlement: Typically done through a debt settlement company or agency, this process involves reducing an original debt to a lower amount – sometimes by up to 50%. Once this is done, the debtor must then repay the remaining amount in a lump sum payment.

READ MORE: Best debt settlement companies in your area

  • Debt consolidation loans: Debt consolidation is when you take multiple debts and combine them all. This is typically done with a debt consolidation loan or a balance transfer credit card. It’s particularly useful if the debts themselves have higher interest rates than the new loan.
  • Debt management plan: A debt management plan is another great way of finding debt relief. Unlike debt settlement, which can hurt your credit, a DMP is usually done through a non-profit credit counseling agency. These agencies will work with your creditors to make a repayment plan that works for you.
  • DIY plans: A DIY plan, or DIY debt settlement plan, is where you work with your creditors to try to settle your debts. This process can be harder than going through an agency as it requires good negotiation skills. However, it could save you on agency fees.
  • Bankruptcy: Considered a last resort, declaring bankruptcy can be a way to eliminate unmanageable debt and start rebuilding from the ground up. Speak with a bankruptcy attorney to see if they recommend a Chapter 7 or Chapter 13 based on your circumstances.

Will you lose anything if you file for bankruptcy in Wisconsin? Check out this video to learn more:

Debt resources for Wisconsin residents facing hardship

Wisconsin has many resources to help people with their debts or finances. This includes programs that help with:

  • Rental assistance
  • Medical bills
  • Legal aid
  • Utility bills
  • Food

In terms of food assistance, Wisconsin has several major food banks – found on the Feeding Wisconsin State Association of Food Banks website. Each bank serves one of the main regions throughout the state. They are:

  • Feeding America Eastern Wisconsin – 1700 W. Fond du Lac Avenue Milwaukee, WI 53205
  • Feeding America Eastern Wisconsin (Fox Valley) – 2911 W. Evergreen Drive Appleton, WI 54913
  • Second Harvest Foodbank of Southern Wisconsin – 2802 Dairy Drive Madison, WI 53718
  • Feed My People Food Bank – 2610 Alpine Road Eau Claire, WI 54703
  • Second Harvest Heartland – 7101 Winnetka Avenue N. Brooklyn Park, MN
  • Second Harvest Northern Lakes Food Bank – 4503 Airpark Boulevard Duluth, MN 55811
  • Channel One Regional Food Bank – 131 35th Street SE Rochester MN, 55904

Debt collection laws in Wisconsin

Like the rest of the country, debt collectors in Wisconsin are subject to the Fair Debt Collection Practices Act (FDCPA), which regulates debt collection practices and prohibits certain acts.

Among other things, debt collectors and creditors cannot harass, threaten, or coerce debtors (person who owes) to get them to pay. There are also various restrictions on how and when they can contact a debtor about an unpaid debt.

Wisconsin also has the Wisconsin Consumer Act. Chapter 427 of this act goes into detail about what creditors – and debt collectors – are and what they can and cannot do.

In section 427.104, for example, debt collectors cannot:

  • Claim criminal prosecution will occur or threaten violence if the debtor doesn’t pay.
  • Threaten that they will contact the debtor’s employer except when it’s legal (as in statute 422.404).
  • Communicate during unusual hours or contact people besides the one who owes money.

Section 427.105, meanwhile, outlines the rights a debtor has if they have experienced an “injury” due to a debt collector.

Typically, the FDCPA does not apply to creditors trying to collect their own debts. Under 427.103 of the Wisconsin Consumer Act, however, it does.

Debt collectors in Wisconsin do have certain rights. For example, they can:

  • Stop doing business with you.
  • Report the default to a credit reporting agency.
  • Initiate a lawsuit to collect the debt.

Income and employment in Wisconsin

Wisconsin’s unemployment rate is currently 4.0%, slightly higher than the national average of 3.5%. This is nonetheless much lower than it was during the height of the pandemic when unemployment rates reached over 10%.

With that in mind, the state currently ranks 43rd in terms of job growth.

Wisconsin is a right-to-work state, meaning employees do not have to join a labor organization or union as a condition of employment. Right-to-work states typically don’t offer the same employee protections as other states. On average, an employee in one of these states makes $1,500 less annually.

Wisconsin is also an at-will state. This essentially means that an employer has the right to fire an employee for any reason or no reason at all. Exceptions do exist, such as discrimination. However, at-will states generally have less job security than other states.

How to apply for unemployment benefits in Wisconsin

If you’re currently unemployed or are facing unemployment, you can apply for benefits in Wisconsin.

To start the process, head over to the Wisconsin Unemployment Insurance Benefit Services website. You’ll need to accept the terms and conditions. Next, log in or create an account. Once logged in, you’ll be taken to your dashboard where you can file an initial claim.

Applying for unemployment benefits requires certain information, such as:

  • Personal information
  • Contact details
  • Employment information (including work history)

To move forward with your claim and determine eligibility, you’ll need to complete the entire application.

Usually, the application process can be done online, but it may be necessary to call the agency directly. In that case, contact them toll-free at 844-910-3662 or call 414-435-7069.

For more information on unemployment benefits and what to expect, go to the Department of Workforce Development.

Banking and taxes in Wisconsin

Wisconsin has an individual income tax rate, which varies from 3.54% to 7.65%. The exact rate is based on income and whether or not the individual is married.

For example, a single taxpayer whose income is no more than $12,760 will have to pay 3.54% in taxes. A married couple filing a joint return will be taxed at the same rate if they make $17,010 or less.

For more details on the specific tax rates, refer to the Department of Revenue for Wisconsin.

Wisconsin’s sales tax is 5%, making it one of the lowest sales tax rates in the country.

In terms of banking, 2.9% of Wisconsin residents – approximately 170,981 people – are considered unbanked. This means they don’t have a checking or savings account.

Wisconsin housing market

Around 67.1% of Wisconsin residents are homeowners.

According to recent data from Zillow, the current average housing price in Wisconsin is $268,737. This is a 10.6% increase over the previous year. For context, the national average house value is $357,810 – about $89,000 higher.

The average mortgage payment in Wisconsin is about $1,418. The average rent payment in Ashland County for a 2-bedroom apartment is $734. In Pierce County, meanwhile, that same apartment would cost closer to $1,308.

Wisconsin also has a homestead exemption. For single filers, they can protect up to $75,000 of their home equity ($150,000 for married or joint filers).

To claim this credit, you must meet certain criteria, such as:

  • Be a homeowner and legal resident of Wisconsin
  • Be at least 18 years old
  • Make no more than $24,680 a year (in 2021)

Check out the DOR Claiming Homestead Credit for a complete list of eligibility requirements and details about the credit.

Retirement in Wisconsin

The average Wisconsin resident has $448,975 saved for retirement. To live comfortably during their retirement years, the average Wisconsinite should have saved $661,167.

Average Wisconsin insurance premiums

The average cost of car insurance in Wisconsin is around $1,169 a year, or just over $97 a month. This is several hundred dollars cheaper than the national average.

Meanwhile, the average cost of homeowner insurance premiums in the state is an estimated $1,257 a year. That’s about $105 a month.

Payday lending status in Wisconsin: Legal

Payday lending is legal in Wisconsin. The state has a few guidelines to try to regulate payday lenders, but these are lax and not always properly enforced.

Payday Loan terms and debt limits in Wisconsin

  • Interest Rate (APR): 574% APR
  • Minimum Loan Amount: Not Specified
  • Maximum Loan Amount: $1,500 (or 35% of the gross monthly income)
  • Minimum Loan Term: Not Specified
  • Maximum Loan Term: 90 days

Statute of limitations on debt in Wisconsin

The statute of limitations is the period in which a debt collector can take legal action (i.e. initiate a lawsuit) to try to collect what they’re owed. In Wisconsin, it’s six years on all types of debt.

State hardship programs

Wisconsin has multiple state hardship programs available to help low-income households. Here are some of the main ones:

  • 211 Wisconsin: This program helps connect residents with nonprofit and government services in their community. This includes housing, life skills, medical services, and more. You can search their database for specific services or chat with a specialist.
  • Well Badger: This resource matches people with different community and government programs that assist with child health, general health coverage, financial assistance, nutrition, mental health, and parenting help.
  • ACCESS: ACCESS is designed to make the search for health care coverage and affordable child care easier. It can also help people create job-related skills or pay for groceries. Through the site, it’s possible to also connect to other services.
  • Food through FoodShare (aka SNAP or food stamps): FoodShare is a program that can help low-income households access affordable, high-quality food. It’s similar to SNAP.
  • Health care through BadgerCare Plus and Wisconsin Medicaid: BadgerCare Plus is meant to help low-income households, as well as pregnant women and children, get affordable healthcare. Wisconsin also has Medicaid for eligible individuals.
  • Childcare expenses through Wisconsin Shares: This subsidy program offsets some of the costs associated with childcare. For eligibility information, go to Step 2.

For more information about these programs, go to: https://www.dhs.wisconsin.gov/covid-19/help.htm

Or, if you’re looking for additional resources or help with things like bills, education, and vocational training, here are a few other programs to check out:

  • Tax Credits
  • Childhood Care such as Head Start
  • Education Grants
  • Skills Enhancement Program
  • AODA services
  • Victim Services
  • CARES relief fund

Help for Veterans

As of 2020, Wisconsin was home to approximately 350,042 veterans. If you’re one of them, or if you know a veteran facing homelessness, unemployment, or other hardships, there are resources available.

The Wisconsin Department of Veterans Affairs is a great resource for any veteran looking for financial assistance or employment.

Facilities in Wisconsin

There are also many facilities in Wisconsin for veterans (found in the VA directory). These include:

Milwaukee Regional Office

5400 West National Ave.

Milwaukee, WI 53214

Monday-Friday, 8 am-4 pm

800-698-2411

VA Medical Center in Milwaukee

5000 West National Avenue

Milwaukee, WI 53295-1000

414-384-2000

Wausau VA Clinic

1105 East Grand Avenue

Rothschild, WI 54474-1024

715-842-2834

Employment resources for Veterans

Here are a few of the best unemployment resources for veterans:

  • CareerOneStop: This website has an online portal for veterans to look for available jobs. It also contains different job resources.
  • VeteranRecruiting.com: Meant for veterans and military spouses looking for employment, this resource has a virtual recruitment center and online career fairs.
  • Helmets to Hardhats: Operating nationwide, this resource helps veterans and military personnel successfully transition into a civilian career in construction. 
  • Hiring Our Heroes: This resource is dedicated to helping veterans through networking and job and education-related opportunities.
  • My Next Move: Here, you can find career options based on your skills.
  • Warriors to Work: This resource offers career counseling, resume assistance, and so forth to veterans.
  • Still Serving Veterans: Veterans seeking a civilian career or transitioning into civilian life can get help here.

The Bottom Line

In Wisconsin, there are many debt relief programs and services available to residents. A great place to start is ACCESS since it lets you apply for benefits and programs and manage them all in one place. Whatever you’re looking for, if you’re in debt or need financial relief, you have options.

FAQs

How long can a debt be collected in Wisconsin?

Consumer debts can be collected for up to six years.

When does the statute of limitations begin in Wisconsin?

The statute of limitations on consumer debts usually begins on the date of the most recent missed or late payment. It may restart once you make another payment on a delinquent account, even if the statute had previously expired.

Am I responsible for my spouse’s debt if I get divorced in Wisconsin?

Wisconsin is a community property state. So, if the debt is classified as marital debt (a debt that occurs during the marriage), it will be split between both spouses. This is the case even if both spouses were not aware of the debt. If a debt is from before the marriage, it’s typically the responsibility of the one who acquired it. If one ex-spouse contests the debt and can prove that it was not obtained for the family, they may be able to avoid paying it.

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