Residents of Outagamie County, Wisconsin, may be aware that certain financial transactions require a person to use assets as collateral. The debtor and creditor are then bound by a legally enforceable contract, which is valid until the sum that was borrowed is repaid, along with any interest that may have been accrued on the loan. If the debtor fails to pay, according to the contract, the creditor may initiate a procedure to recover the money.
Usually, the borrower must receive a notice stipulating a time period within which the money must be paid before more extreme measures are taken. According to Wisconsin law, if the debtor has defaulted on the payments, and at least 15 days have passed since the creditor sent the notice, the creditor may take the appropriate steps to recover the money, including taking over asset possession.
While the creditor has the right to seize the assets offered as collateral, other property may sometimes be seized if the amount of money is not entirely covered. However, the existing law prohibits creditors from seizing some items, which are classified as exempt property. These items may include things like chairs, tables, stoves, refrigerators, and household electric appliances. Wisconsin law allows one television per household to remain, as well as wedding rings and other personal items that the person may own.
The debtor’s house may also be considered exempt based on its value; presently, if the value of the house, after deducting any mortgage amount, is under $15,000, it may be considered exempt. Another aspect is wage garnishment, which is usually an option for repaying debts. That is; however, limited to only amounts that might remain after payment of taxes and spousal or child support, provided that it does not leave the debtor with no money.
It is also likely that the debtor may owe money for fines and penalties. With everything considered, surrendering assets is not necessarily a straightforward process and it may require determining a number of facts about the debtor and the debtor’s assets. Consequently, creditors try to seize assets only as a last resort. Instead, they prefer to work with the debtor toward “curing” or making amends for debt.
Source: Wisconsin State Legislature, “Chapter 425: Consumer Transactions – Remedies and Penalties“, Accessed Oct. 10, 2014