It is the first question almost everyone asks, and usually the only one that matters to them in the opening minutes: if I file, do they take my house? Do they take my car? The fear is reasonable, it is nearly universal, and in the ordinary case it is misplaced — but not for the reason people expect.
The answer turns on a single word buried in the Wisconsin statute, and once you have it, most of the rest follows.
Exemptions protect equity, not value
Wisconsin’s exemption statute caps each category of protected property by its “aggregate value.” Section 815.18 (2) (a) defines that term: the sum total of the debtor’s equity in the property claimed exempt. Not the sticker price. Not the assessment. The equity.
That definition does most of the work. A homeowner who thinks of the house as a $340,000 asset is measuring the wrong thing. If $290,000 of it belongs to the mortgage company, the debtor’s interest is $50,000, and $50,000 is what the exemption has to cover. The same is true of the car: a vehicle worth $18,000 with $16,000 still owed on the note is a $2,000 asset for exemption purposes.
This is why so many people who arrive convinced they will lose everything discover that there is, in the legal sense, not much there to lose. The statute is candid about its object. Section 815.18 (1) directs that it be construed “to secure its full benefit to debtors and to advance the humane purpose of preserving to debtors and their dependents the means of obtaining a livelihood, the enjoyment of property necessary to sustain life and the opportunity to avoid becoming public charges.” That is not decorative language; Wisconsin courts read the exemptions broadly because the legislature told them to.
Wisconsin gives you a choice of two lists
Under 11 U.S.C. § 522 (b), a filer may claim either the federal exemptions written into § 522 (d) or the exemptions available under state and other federal law. Some states have shut the federal door. Wisconsin has not, which makes it what practitioners call a choice state.
Two rules constrain the choice. First, it is one list or the other — you cannot take the Wisconsin homestead and the federal wildcard in the same case. Second, where spouses file jointly or their cases are jointly administered, one may not elect the federal list while the other elects the state list; if they cannot agree, § 522 (b) (1) deems them to have elected the federal list.
There is also a residency trap worth knowing about if you have moved recently. Section 522 (b) (3) (A) applies the exemption law of the state where you were domiciled for the 730 days before filing. If your domicile was not in a single state for that whole period, the statute looks to where you lived for the 180 days preceding the 730-day window. Someone who moved to Waukesha County eighteen months ago may still be a debtor governed by another state’s exemption scheme, which is a fact worth establishing before anything is filed rather than after.
The Wisconsin list
The figures below are what the statutes say as of this writing. Statutory amounts get revised, so treat them as the starting point for a conversation, not as permanent law.
- Homestead — $75,000. Section 815.20 (1) exempts the homestead of a resident owner who occupies it, up to $75,000, against execution and judgment liens. Where spouses own the land jointly, in common, or as marital property, each spouse may claim up to $75,000. The exemption follows the sale proceeds for two years if they are held with the intention of buying another homestead.
- What counts as a homestead. Section 990.01 (14) is broader than most people assume: the dwelling — including a condominium, mobile or manufactured home, house trailer, or cooperative interest — plus the land reasonably necessary for its use as a home, not less than a quarter acre if available and not more than 40 acres.
- Motor vehicles — $4,000, under § 815.18 (3) (g), plus any unused portion of the consumer-goods exemption. That second clause is the one that gets overlooked, and it is often decisive.
- Consumer goods — $12,000 aggregate under § 815.18 (3) (d): household goods and furnishings, clothing, keepsakes, jewelry, appliances, books, musical instruments, firearms, sporting goods, animals, and other tangible personal property held primarily for personal, family, or household use. A household that is not carrying $12,000 of equity in its furniture can push the remainder onto the car.
- Depository accounts — $5,000 aggregate under § 815.18 (3) (k), limited to accounts for the debtor’s personal use and not used as business accounts.
- Business and farm property — $15,000 in equipment, inventory, farm products, and professional books under § 815.18 (3) (b) 1.; alternatively, and only if that exemption is not claimed, $15,000 in a closely held business that employs the debtor or in which the debtor is actively involved.
- Retirement funds. Section 815.18 (3) (j) exempts qualifying retirement, pension, profit-sharing, IRA, Keogh, and 401(k) assets without a dollar ceiling in the statute — with two significant qualifications. Owner-dominated plans held by owner-employees are exempt only to the extent reasonably necessary for support, and the exemption does not apply at all against a child support, family support, or maintenance order, or a judgment of divorce, annulment, or legal separation.
- Life insurance and annuities — $150,000 of accrued dividends, interest, or loan value under § 815.18 (3) (f) 2. But (f) 3. cuts that back for recent contracts. One issued less than 24 months before the applicable date is capped at $4,000 outright. One issued earlier but funded within the last 24 months keeps the value it had the day before that funding, while the recent addition is capped at $4,000. Late-hour transfers into an annuity do not work.
- Personal injury recoveries — $50,000 for payments arising from personal bodily injury under § 815.18 (3) (i) 1. c., with separate, uncapped protection measured by what is reasonably necessary for support for wrongful-death and lost-future-earnings payments.
- Wages — 75 percent of net income for each one-week pay period under § 815.18 (3) (h), limited to what is reasonably necessary for support but never less than 30 times the greater of the state or federal minimum wage.
When the federal list is the better trade
The federal figures are adjusted for inflation every three years by the Judicial Conference. The current set took effect April 1, 2025, and the next adjustment is due April 1, 2028.
Under 11 U.S.C. § 522 (d), the homestead exemption is $31,575 — far below Wisconsin’s. The motor vehicle exemption is $5,025, slightly above. Household goods run $16,850 in the aggregate with an $800 per-item cap, and jewelry is $2,125.
The clause that decides most close cases is the wildcard at § 522 (d) (5): $1,675, plus up to $15,800 of any unused homestead exemption, which the debtor may apply to any property at all. Wisconsin has no general wildcard.
So the calculus is usually simple in shape, if not in arithmetic. A homeowner with real equity almost always does better under Wisconsin’s $75,000 homestead — doubled where both spouses own and file. A renter, or a homeowner who is underwater or nearly so, frequently does better under the federal list, because the unused homestead converts into a wildcard that can be pointed at a bank balance, a tax refund, an expensive tool, or the equity in a paid-off car. Which list wins is a calculation done on your actual numbers, and it is not always the one that looks obvious.
The mortgage and the car loan are a separate question entirely
Here is the distinction that causes the most confusion, and it is worth stating plainly: an exemption protects you from creditors reaching the property; it does not erase a lien on it. Section 815.18 (12) says so directly — no exempt property may be claimed as exempt against a purchase-money claim, a security interest, a land contract, a condominium or homeowners association assessment or maintenance lien, or a mortgage.
A bankruptcy discharge eliminates your personal liability on the debt. It does not remove the mortgage from the house or the lien from the title of the car. The practical consequence is the one people actually need to hear: if you want to keep a financed house or a financed vehicle, you generally have to keep paying for it. Filing does not conjure a free car. What it does is clear away the unsecured debt — the credit cards, the medical bills, the deficiency balances, the personal loans — that made the secured payment impossible in the first place.
There are tools that operate on the lien itself in the right circumstances, including avoidance of certain judicial liens and nonpossessory, non-purchase-money security interests in household goods, and redemption of personal property for its value. Whether any of them fits is a question about your particular collateral and your particular liens.
If there is non-exempt equity, Chapter 13 is often the answer
Suppose the numbers do not work — the equity in the house exceeds the exemption, or a paid-off truck is worth more than the vehicle and consumer-goods exemptions together. In a Chapter 7 case, that surplus is what a trustee may reach.
It is also the classic reason to file under Chapter 13 instead. A Chapter 13 debtor keeps the property and pays creditors, through the plan, at least what they would have received had the non-exempt equity been liquidated. The asset stays; its non-exempt value is paid out over time from income rather than realized by sale. Our discussion of how Chapter 7 and Chapter 13 differ in Wisconsin goes through the rest of that comparison.
Two ways people lose exemptions they were entitled to
Failing to claim them. Section 815.18 (6) (a) is unforgiving on this point: exempt property is not exempt unless affirmatively claimed, and a debtor who does not follow the claiming procedure waives the exemption. Protection is not automatic; someone has to assert it, correctly and in time. (A contractual waiver signed before judgment, by contrast, is void — a creditor cannot make you sign your exemptions away in advance.)
Rearranging assets before filing. This is the more expensive mistake, and it is nearly always made with good intentions — deeding the house to a relative, moving the savings into a sibling’s account, paying back a family loan while the credit cards go unpaid. Section 815.18 (10) permits a court, in its discretion, to deny any or all of the exemptions where the debtor procured, concealed, or transferred assets intending to defraud creditors. The instinct to protect what is yours is understandable. Acted on without advice, it can forfeit the very protections the statute would otherwise have given you for free. Get the advice before you move anything.
Talk to a New Berlin bankruptcy attorney
Most of the anxiety about bankruptcy comes from not knowing the numbers. Once the equity is measured, the liens are identified, and the two exemption lists are run against each other, the question stops being “will I lose my house” and becomes something answerable — usually with better news than expected, and occasionally with a warning that changes the plan.
Carson Law Office handles bankruptcy matters for individuals and families throughout New Berlin, Waukesha County, Milwaukee, West Allis, Wauwatosa, and the surrounding communities. If you want a straight answer about what you would keep, call (262) 860-8932 or contact us here and we will run your own figures against the statute.
This article provides general information about Wisconsin law and is not legal advice. Reading it does not create an attorney-client relationship. Exemption amounts and bankruptcy dollar figures are revised periodically; for advice about your own situation, speak with a licensed Wisconsin attorney.