You can open your mailbox, see another past-due mortgage notice, and feel your stomach drop. You want to keep a roof over your family, but you also know you cannot keep juggling the mortgage, credit cards, medical bills, and everything else forever. Thinking about bankruptcy on top of that can make you wonder if you are just trading one problem for another.
If you own a home in Wisconsin and are considering bankruptcy, the way you handle your mortgage payments in the next few months can have a huge impact on your options. Some people keep paying the mortgage at all costs, even draining their retirement. Others stop paying the second they decide to look into bankruptcy. In my experience, both extremes can lead to bad outcomes. You deserve to understand how this really works under Wisconsin law before you make any big moves.
I am Attorney Andrew Sapinski of Sapinski Law Office, S.C. in Milwaukee. For more than 20 years, I have focused my practice on bankruptcy and debt relief, and I have filed over 2,000 cases for Wisconsin families, many of them dealing with late mortgage payments and looming foreclosure. In this article, I will walk you through how mortgage payments fit into the Wisconsin bankruptcy picture and share the same guidance I give clients in a one-on-one consultation.
Worried about your mortgage and bankruptcy options? Attorney Andrew Sapinski can explain what Wisconsin law means for your home and the next steps. Call (888) 298-1041 or contact us online for a confidential consultation.
Why Mortgage Decisions Before Bankruptcy Matter So Much In Wisconsin
Your mortgage is not like a credit card or a personal loan. It is a secured debt, which means your home serves as collateral for the loan. In bankruptcy, secured debts are treated differently because the lender has rights in the property itself. You can usually get rid of unsecured debts, such as credit cards and medical bills, without giving up anything in return. With a mortgage, your choices about keeping or surrendering the home drive the outcome.
Wisconsin law also has its own rules that affect how much of your home is protected and how quickly a lender can foreclose. The Wisconsin homestead exemption protects a significant amount of equity in a primary residence, and the foreclosure process typically moves through the courts, not outside of them. That means timing matters. How far behind you are, how much equity you have, and where you are in the foreclosure process can all change what is realistic.
Many people I meet think bankruptcy automatically means losing their house. Others think filing will automatically save it, no matter how far behind they are or how tight their budget is. Neither of those beliefs is accurate. What actually helps or hurts you is how well your mortgage decisions before filing line up with your long-term goals and the tools bankruptcy offers. Because I focus my practice on bankruptcy and debt relief, I look at your mortgage decision as part of a full strategy, not as an isolated bill you either pay or skip.
How Missed Mortgage Payments Lead To Foreclosure In Wisconsin
To understand how bankruptcy can help, you first need a clear picture of what happens when you fall behind on your mortgage in Wisconsin. Most lenders follow a similar pattern, even though the exact timing varies from case to case. Usually, after you miss one payment, you receive a late notice and possibly collection calls. Fees and extra interest start to add up immediately, even if the lender is still talking about working with you.
If missed payments continue, the lender commonly sends a default or demand letter that gives you a deadline to bring the loan current or face foreclosure. When that deadline passes without full payment, the lender can file a foreclosure lawsuit in the Wisconsin circuit court for the county where your property is located, for example, the Milwaukee County Circuit Court for a home in Milwaukee. You are served with a summons and complaint, and the case becomes a public court matter that moves toward a foreclosure judgment.
Once the court enters a foreclosure judgment, the property is eventually scheduled for a sheriff’s sale. In many Wisconsin cases, the time from your first missed payment to a sheriff’s sale can be many months, sometimes longer than a year, but that is not guaranteed. Throughout this process, late fees, court costs, and attorney fees for the lender are usually added to what you owe. The longer the foreclosure goes on, the larger the arrears balance becomes, which makes catching up more and more difficult without some kind of structured plan.
As a Milwaukee bankruptcy attorney, I often coordinate a bankruptcy filing with where a client’s foreclosure case sits on this timeline. Filing at the right point can stop a scheduled sale, give you breathing room, or, in some situations, prevent a foreclosure lawsuit from being filed at all. Understanding this sequence helps you see why simply paying what you can or ignoring the problem is not a strategy.
What Bankruptcy Really Does To Your Mortgage And Your Home
Bankruptcy is powerful, but it does not rewrite your mortgage contract or force your lender to accept any deal you propose. Instead, it gives you legal tools and protections that you can use, depending on whether you file Chapter 7 or Chapter 13 and what you want to do with the house. The first tool people usually hear about is the automatic stay. When you file a bankruptcy case, the automatic stay goes into effect and generally stops foreclosure and collection efforts while the case is active.
In Chapter 7, the stay gives you temporary relief from foreclosure, but it does not provide a long-term way to catch up if you are significantly behind. If you are current or only slightly behind and can get current quickly, and if your equity is within the Wisconsin homestead exemption, you can usually keep the home as long as you keep making the regular payments. The mortgage lien survives the bankruptcy. In some cases, your lender may ask you to sign a reaffirmation agreement, which is a new promise to remain personally liable on the loan despite your discharge.
In Chapter 13, the automatic stay works together with a repayment plan. You propose a plan, typically lasting three to five years, in which you make monthly payments to a Chapter 13 trustee. That payment covers your mortgage arrears and other debts as the plan provides, while you resume or continue your regular mortgage payment going forward. If the court confirms your plan and you follow it, this structure can stop foreclosure and give you a way to cure missed payments over time instead of all at once.
Over more than two decades of practice in Wisconsin, I have seen both paths work well, depending on the situation. In some cases, Chapter 7 made sense because the homeowner was current, could afford the payment after shedding other debts, and had no significant nonexempt equity. In other situations, Chapter 13 was the only realistic way to save a home that was several months behind. The key is matching your chapter choice to your mortgage situation and your budget, not assuming one chapter or the other is automatically better.
Should You Keep Paying The Mortgage Before You File In Wisconsin
This is the question almost every homeowner in trouble asks me. There is no single right answer for everyone, but there are patterns that come up again and again. If you are current on your mortgage, your payment is affordable even after you remove credit cards and other unsecured debts, and you have little or no risk of losing the home in Chapter 7 because of excess equity, then continuing to pay while you prepare a filing often makes sense. You are protecting something you intend to keep and can realistically afford.
If you are several months behind, your lender is moving toward foreclosure, and even your regular payment feels high compared to your income, the picture changes. In that situation, draining savings or borrowing more money just to make one or two payments rarely fixes the problem. Instead, we look at whether a Chapter 13 plan could spread the arrears over three to five years, or whether it is more realistic to surrender the home, discharge the mortgage debt, and redirect your income to more manageable housing.
One of the most harmful things I see is people raiding their retirement accounts to keep up mortgage payments a little longer, only to lose the house anyway. Most retirement funds are protected in bankruptcy. Once you cash them out, you not only lose that protection, but you also create tax issues and still may not save the home. Before you use retirement or take out a high-interest loan to save the mortgage, it is worth getting advice about whether that money could be better used in a structured bankruptcy plan.
In many cases, the smartest approach is to prioritize essential living expenses, such as basic utilities and food, and then make a strategic decision about the mortgage based on a clear review of your arrears, the stage of any foreclosure, and your realistic post-bankruptcy budget. I routinely help clients sort through these numbers and decide whether to keep paying, partially pay, or temporarily pause payment while we prepare a filing. The point is to act with a plan, not from panic.
How Your Mortgage Strategy Changes In Chapter 7 Versus Chapter 13
Your approach to mortgage payments before filing often depends on whether you will file Chapter 7 or Chapter 13. In Chapter 7, the court looks at your income, expenses, and property, but does not set up a repayment plan for mortgage arrears. If your goal is to keep the home in Chapter 7, you generally need to be current or close to current by the time your case moves forward. Continuing to pay, or catching up quickly if you have just fallen behind, can support that goal. If you know you cannot afford the payment long term, Chapter 7 can still help by wiping out your personal liability, but you will likely end up surrendering the property.
Reaffirmation agreements also come up more often in Chapter 7. By reaffirming, you agree that the mortgage debt will survive your discharge and you remain personally liable for it. Lenders sometimes prefer this because it gives them more recourse if you default later. Whether reaffirmation makes sense depends on your equity, your payment level, and your confidence in your future income. In many cases, I advise clients very carefully on the pros and cons before they decide whether to sign such an agreement.
In Chapter 13, your mortgage strategy can be different. If you file while you are behind, you can include the past due amount in your Chapter 13 plan and pay it back over the three to five-year term, as long as you can afford both the plan payment and the regular monthly mortgage payment at the same time. For example, if you are $12,000 behind, those arrears could be spread over 60 months, which is $200 per month, on top of your regular mortgage. That can be much more manageable than trying to come up with a lump sum while a foreclosure case advances.
The flip side is that the more you fall behind before filing, the larger that arrears number becomes, and the harder it is to make the plan payment affordable. In my work with Wisconsin homeowners, I have seen Chapter 13 plans succeed when the arrears were within reach of the family’s income and fail when the arrears had grown too large by the time we filed. This is another reason early planning matters. At Sapinski Law Office, S.C., I help clients decide not just which chapter to file, but when to file it, based on what their mortgage numbers look like.
Common Mistakes Wisconsin Homeowners Make With Mortgage Payments Before Filing
When people sit down in my office for the first time, I often hear the same regrets. One of the most common is, “I emptied my 401(k) to save the house, and I still lost it.” Most retirement accounts are either fully or largely protected in bankruptcy. By cashing them out to make a few extra mortgage payments, you may lose that protection, create tax penalties, and still end up in foreclosure because the underlying budget never worked. That money could often have supported a more sustainable plan or given you flexibility after a fresh start.
Another frequent pattern is paying unsecured debts while letting the mortgage slide. I understand how intense the pressure from credit card companies and collectors can be. However, from a legal and practical standpoint, your home and your car usually matter more to your day-to-day life than old credit card balances. In many bankruptcy cases, those unsecured debts can be reduced or eliminated, while missed mortgage payments are harder to work around. Shifting your priorities sooner can preserve more options for the house.
Waiting too long to get advice is also a big mistake. I routinely meet homeowners who reach out only when a sheriff’s sale is already scheduled or just days away. At that point, we can sometimes still stop the sale with a fast bankruptcy filing, but we have far less time to gather documents, think through chapter options, or discuss any possible negotiations with the lender. Had they come in three or six months earlier, we could have planned the filing date and the mortgage strategy more carefully and reduced a lot of last-minute stress.
I share these patterns not to criticize, but to let you know you are not alone and to encourage you to avoid repeating the same cycle. My role is to look at your full financial picture under Wisconsin law and show you what is possible, not to judge how you got here. The sooner we talk, the more choices you usually have.
How I Help You Build A Mortgage And Bankruptcy Plan That Fits Your Life
Every homeowner’s situation is different, even when the stress feels the same. When you meet with me, we start by reviewing the basics of your mortgage, including your monthly payment, how many payments you have missed, any letters or lawsuits you have received, and what your lender has told you so far. We also look at your home’s approximate value, the mortgage balance, and any other liens, then compare that to what the Wisconsin homestead exemption is likely to protect.
Next, we walk through your income and other debts so we can see what your budget would look like after a bankruptcy discharge. From there, we compare realistic scenarios. We might outline what Chapter 7 would look like if you stay current and keep the home, what Chapter 13 would look like if you catch up through a plan, and what life might look like if you choose to surrender the property and lower your housing costs. My goal is not to push you into one path, but to give you a clear view of each option so you can choose with your eyes open.
At Sapinski Law Office, S.C., this mortgage planning is built into what I do every day. I personally handle your case rather than passing you off to staff, and I offer free initial consultations, so cost is not a barrier to getting answers. For clients who decide to move forward, I provide affordable payment plans for fees and a credit restoration program at no extra charge after the case, so you have support rebuilding once the immediate crisis has passed.
Talk With A Wisconsin Bankruptcy Lawyer About Your Mortgage Options
Handling Wisconsin mortgage payments in the months before bankruptcy does not have to be guesswork. With the right information and a clear view of your income, arrears, equity, and foreclosure status, you can choose a strategy that gives you the best chance to either keep a home you can truly afford or move on from an unaffordable mortgage in a controlled way. You do not have to make that choice alone or under pressure from collection calls and court deadlines.
Your situation is unique, and what worked for a friend or a neighbor might not be right for you. A short conversation with a lawyer who regularly handles mortgage issues in Wisconsin bankruptcy cases can help you avoid costly mistakes, such as draining retirement or waiting too long to act.
Struggling with mortgage payments and thinking about bankruptcy? Contact Sapinski Law Office, S.C. online or call (888) 298-1041 for a free consultation so we can review your options together and build a plan that fits your life.