Wisconsin Debt Collection Laws: What Collectors Can and Cannot Do

While all Americans are protected by the federal Fair Debt Collection Practices Act (FDCPA), Wisconsin residents get additional protections through the Wisconsin Consumer Act (WCA), codified in Wisconsin Statutes Chapter 427. The WCA applies to both original creditors and third-party collectors — a significant advantage over the FDCPA, which only covers third-party collectors.

This means that even if you're dealing directly with your credit card company, bank, or hospital, they must follow Wisconsin's rules for debt collection.

Wisconsin has a uniform 6-year statute of limitations on most consumer debts under Wis. Stat. § 893.43. This applies to credit cards, medical debt, personal loans, auto loans, and written contracts. The clock starts from the date of the last payment or when the account became delinquent.

Important: Making a payment on an old debt can restart this 6-year clock. If you're contacted about a very old debt, check whether the SOL has expired before making any payments.

If a creditor gets a court judgment against you, they can garnish your wages — but Wisconsin limits this more than federal law. Under Wisconsin law, garnishment is limited to 20% of disposable earnings (compared to the federal limit of 25%).

Additionally, certain income is completely exempt from garnishment: - Social Security and SSI benefits - Veterans' benefits - Unemployment compensation - Workers' compensation - Public assistance

Wisconsin is also a community property state, which means both spouses' earnings may be considered in debt collection, but it also provides protections for a spouse's separate property.

Wisconsin law protects certain property from being seized to satisfy a debt judgment:

Homestead: Up to $75,000 in equity in your primary residence (Wis. Stat. § 815.20). This is one of the more generous homestead exemptions in the Midwest.

Vehicle: Up to $4,000 in equity in one motor vehicle.

Personal Property: Up to $12,000 aggregate in personal property including household goods, appliances, and furnishings.

Retirement: 100% of retirement accounts (IRAs, 401(k)s, pensions) are exempt.

Tools of Trade: Up to $7,500 in tools, equipment, and inventory used in your business or profession.

These exemptions apply to judgment enforcement. Creditors with a security interest (like a mortgage or car loan) can still repossess the collateral.

If you're being contacted by a debt collector in Wisconsin:

1. Know your deadlines: You have 20 days to respond to a debt collection lawsuit. Missing this deadline can result in a default judgment.

2. Request debt validation: Send a written validation request within 30 days of first contact.

3. Check the SOL: If the debt is older than 6 years from your last payment, it may be time-barred.

4. File complaints: Report violations to the Wisconsin DATCP (Department of Agriculture, Trade and Consumer Protection) at datcp.wi.gov.

5. Consider small claims court: Wisconsin's small claims limit is $10,000, which covers many consumer debt disputes. Filing fees are only $55.

6. Consult an attorney: Wisconsin allows consumers to recover damages for WCA violations, including attorney's fees. Many consumer attorneys offer free consultations.