Debt Collection Laws in Wisconsin: Your Rights & Protections

Creditors have numerous options for collecting debt in Wisconsin. They must obey the law when doing so. Wis. Stat. § 427 is Wisconsin’s most notable debt collection law. Several other collection laws protect you from unfair treatment.

Debt collection begins when you default on an account, bill, or other debt. It could be a car loan, credit card, medical bills, second mortgage, or back taxes. Creditors find ways to make you pay.

Collection often starts with calls and letters. Creditors may escalate to lawsuits if initial attempts fail.

The federal government sets guidelines for debt collection. The Fair Debt Collection Practices Act (FDCPA) protects consumers from abusive collectors. Wisconsin has established additional regulations to curb illegal practices.

The Wisconsin State Legislature has enacted laws to keep debt collectors in check. Understanding these laws helps you identify when collectors act illegally.

Early Stage Debt Collection Rights in Wisconsin

Wis. Stat. § 427 ensures debt collectors follow the law. Collectors first contact you about the defaulted account.

The debt collector must verify the debt in writing within five days. The verification must state that the debt will be presumed valid unless you challenge it within 30 days.

You should request debt validation within 30 days to challenge account details. Validate every debt, even if you think it’s yours.

A Debt Validation Letter requests proof of the debt. You want the original contract, repayment history, and current debt amount. The letter disputes the debt and gives them 30 days to validate or stop collecting.

US Code Section § 1692c applies in Wisconsin. Debt collectors must respect your communication preferences.

When Debt Collectors Cannot Contact You

Debt collectors are prohibited from taking these actions:

• Calling you at inconvenient hours unless you permit it. The Wisconsin Consumer Act restricts calls between 8:00 am and 9:00 pm.
• Calling you directly if they know you have an attorney representing you. Exceptions apply if your attorney doesn’t respond within a reasonable time.
• Calling you at work if they know your employer prohibits it.
• Continuing calls after you advise them in writing to stop. They may only contact you to inform you of planned actions like lawsuits.

The Wisconsin Consumer Act § 247.104 prohibits harassment of consumers. It protects you from threats to disclose debt information to others.

You are entitled to compensation under § 425.304 if collectors violate these regulations.

Getting Sued by Debt Collectors in Wisconsin

Yes, debt collectors can sue you in Wisconsin. If they fail to make you pay, settle, or set up a repayment plan, they may take you to court.

You should receive a Summons and Complaint document. Rules of Civil Procedure § 802.06 (1)(a) gives you 20 days to respond in Wisconsin.

Responding to a court Summons requires more than acknowledging receipt. The Summons informs you about the case. The Complaint explains why the creditor is suing you.

The court requires you to respond to every claim in the Complaint. Your Answer should follow a preset format.

In Wisconsin, third-party debt collectors cannot initiate lawsuits without the original creditor’s authorization. They can suggest it, but the creditor makes the final decision.

Our partner Solo can help you draft a customized Answer in minutes. You can also use form SC-V5200 for small claims court responses.

File your Answer within the deadline to prevent a default judgment. After filing, you can negotiate a settlement for less than you owe.

Real Wisconsin Debt Lawsuit Example

Frank was sued by Capital One in Door County Circuit Court. He drafted and filed an Answer within Wisconsin’s 20-day deadline.

When the court scheduled a hearing six weeks later, Capital One filed a dismissal letter. The parties came to an agreement outside of court.

Frank avoided going to court and resolved his Wisconsin debt successfully.

Losing Your Debt Collection Lawsuit in Wisconsin

You may lose the lawsuit if you don’t respond in time. You may also lose if the debt collector proves the debt is yours.

If the court rules for the debt collector, they can legally use other remedies. A debt over six years old may be past the statute of limitations in Wisconsin.

After that period, a creditor can no longer sue you. Permissible debt collection remedies in Wisconsin include:

• Wage garnishment
• Bank account levies
• Real estate liens
• Property seizure

Wage garnishment is the most common remedy.

Wisconsin Wage Garnishment Process and Limits

In Wisconsin, a judgment creditor can ask your employer to withhold pay. The garnishment happens every pay period until they recover the judgment amount.

Wisconsin limits how much creditors can take from your wages. Wis. Stat. § 812.34(2)(a) allows garnishment up to 20% of your disposable income.

You should keep at least 80% of your earnings every pay period. The law prevents creditors from taking part of the 20% if remaining money puts you below the poverty line.

The 80% exemption doesn’t apply to domestic support, back taxes, or court-ordered debts under § 128.21.

Wage garnishment to recover payday loans is illegal in Wisconsin.

The court may also authorize the judgment creditor to take money from your bank account. They can place a lien on your property or seize personal property to recover what you owe.

Protecting Your Rights Under Wisconsin Law

Several laws are on your side when facing debt collection in Wisconsin. Understanding these laws places you ahead of debt collectors.

You can defend your rights effectively when you know the rules. Our partner Solo provides resources for every stage of debt collection.

You have options whether you’re replying to a first notice, responding to a lawsuit, or settling your debt. Taking action within deadlines protects your wages and property.