Statute of Limitations on Debt in Wisconsin

Chloe Meltzer

May 07, 2021

Tell debt collectors they're too late!

Summary: Not sure how you'll pay off an old debt? You might not have to. Learn how the statute of limitations in Wisconsin protects you against creditors and debt collection agencies.

The statute of limitations is a time limit in which a creditor or debt collector must file a lawsuit against a consumer for failure to pay a debt. If a debt collector or creditor does not collect on a debt within this time, the debt becomes “time-barred.” This means that you can no longer be sued for this specific debt in court.

Depending on the state you live in, the statute of limitations varies. Typically the statute of limitations ranges anywhere from four to six years. In Wisconsin, the statute of limitations on debt such as credit cards is six years. The statute of limitations begins on the date of the last payment on an account. This means that if you make a payment on a debt, the time period starts over again.

If you owe on debt and live in Wisconsin, then it is essential to understand your rights as a consumer. Especially if a creditor or debt collector threatens to file a lawsuit against you, you need to gather all of the information possible to defend yourself appropriately.

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Statute of Limitations on Debt in Wisconsin

Wisconsin Statute of Limitations
on Debt

Debt Type

Deadline in Years

Open Accounts

6

Written

6

Oral

6

Credit Card

6

Promissory

10

Judgments

10-20


Source: Findlaw



Each state has its own statute of limitations on civil matters, but under Wisconsin Chapter 893.43, the statute of limitations on open accounts such as credit cards, along with written and oral contracts is 6 years. The statute of limitations on promissory notes is 10 years.

Wisconsin law prohibits any collection efforts on any account where the statute of limitations has expired. This rule not only applies to original creditors but also debt collection agents. If either attempts to collect an expired debt, it is a federal offense against the Federal Debt Consumer Privacy Act (FDCPA).

Many people confuse the statute of limitations with the length of a judgment. These are completely different situations. Once a judgment is entered it typically exists for around 10 years depending on the state. If you suddenly notice that you are having your wages garnished, then you most likely have an old judgment entered against you already. In this case, the statute of limitations will not apply.

The state of Wisconsin also is a bit different as compared to other states in regards to the length of a judgment. In Wisconsin, a judgment becomes a lien for 10 years on all real property. In this case, the judgment-debtor owns or acquires a lien in the county or counties where the judgment is docketed.

At this point, the judgment-creditor has 20 years from the judgment date to have a county sheriff attempt to seize the debtor's property. These lengths can be extended another 10 and 20 years if the judgment-creditor obtains permission from the court.

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How Debt Collection Works in Wisconsin

Lenders, collection agents, or law firms that own a collection account, are known as a creditor. In Wisconsin, there are various means by which a creditor may collect a debt from you. Before a creditor can pursue you for a debt, they must go to court and obtain a judgment against you. This is only possible in one of two ways.

  1. Filing a lawsuit against you in which you do not respond, and obtaining a default judgment.
  2. Going to court and being found liable for the debt

If your debt has not passed the statute of limitations, and a judgment is placed against you, the court is declaring that the creditor has the legal right to demand the following:

  • Wage garnishment
  • Account levy
  • Lien on real property
  • Seizure of personal property

In the eyes of the law, these are known as “remedies.” After a creditor is granted a judgment, they are called a judgment-creditor. The method in which a judgment-creditor collects the debt depends on the circumstances and Wisconsin law.

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Wisconsin Wage Garnishment Rules

The most common method used by judgment-creditors to enforce a judgment is wage garnishment. Wage garnishment occurs when a creditor or debt collector contacts your employer. They will then require the employer to deduct a certain portion of your wages from each check, to pay back your debt.

Although this is completely legal, there is a limit on how much may be taken from each paycheck. Throughout the United States, this amount is between 10% and 25% of your wages. Garnishment of Social Security benefits or pensions is not allowed for consumer debt under federal law. In Wisconsin, 80% of your disposable earnings are exempt from garnishment under this subchapter. This means that only 20% of your wages may be taken each paycheck.

Other Methods of Garnishment

Wisconsin Bank Account Levy Rules

Bank levies are another method of paying back a debt. Bank account levies allow a creditor or debt collector to take money from your bank account and apply it to the balance of the judgment.

Wisconsin Liens

When you have a lien, it is an encumbrance on a property. This is also known as a claim. Essentially, if you owe a debt and also own a home, a creditor with a judgment against you may ask for the right to place a lien on your home. This means that if you sell or refinance the home you will be required to pay off your debt out of the proceeds of the sale or refinance. If this occurs, and the amount of the judgment is more than the amount of equity in your home, then you may not be able to sell or refinance your home until you can pay off the judgment.

Wisconsin Community Property Law

Wisconsin is one of 10 community property states. If you live in Wisconsin, you must be aware that you may be liable for your spouse's debts. Because this law is tricky, you should not assume that you will need to pay the debts of your spouse automatically. Be sure to review the doctrine of necessities to ensure that you are legally liable for these debts before you pay them, and always check to see if the statute of limitations has expired.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

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"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


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