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Wisconsin Homestead Laws

For anyone who has been in a bit of a financial bind, there is always the worry that you’ll lose your home. Fortunately, most states have what are known as homestead protection laws that can protect us from becoming homeless as a result of economic hardship. These laws allow individuals to designate a piece of property as a "homestead," which can shield it from certain creditors. This is a quick introduction to homestead laws in Wisconsin.

Wisconsin Homestead Statutes

Like many other states, Wisconsin places limits on the minimum and maximum acreage that can be designated as a homestead: no less than ¼ acre and no more than 40 acres. This goes for both urban and rural parcels of preoprty. And under Badger State law, the homestead cannot be valued at more than $40,000 for a single individual. Wisconsin homestead laws are highlighted in the table below.

Code Section

815.20; 990.01 (14)

Max. Property Value That May Be Designated 'Homestead'

$40,000

Maximum Acreage (Urban)

Not less than 1/4 acre or more than 40 acres

Maximum Acreage (Rural)

Same as urban

Exceptions to Wisconsin Homestead Laws

Even Wisconsin’s homestead protections aren’t perfect. There may be situations where creditors could still force the sale of property to collect debts owed to them. Four general exceptions to homestead laws are:

  • If the homestead property is specifically pledged as credit for a mortgage;
  • If there was a pre-existing lien on the property before the establishment of homestead;
  • If there are past due taxes owed to the State of Wisconsin and Wisconsin counties or municipalities; or
  • If there is money owed to mechanics, contractors, or builders for work performed in repairing or improving the property.

Additionally, Wisconsin’s homestead exemption only protects against state, not federal, debts. Therefore, it is subject to the Supremacy Clause of the United States Constitution, meaning a federal law can supersede it. For example, any federal income tax liens may supersede Wisconsin’s state homestead protections. That said, the Internal Revenue Service has generally been reluctant to foreclose on an individual’s home in order to enforce federal tax debts. Normally, the IRS will only get involved if you mortgage or sell the property before the tax lien expires.

Wisconsin Homestead Laws: Related Resources

Wisconsin’s real estate laws can seem convoluted. You can find more introductory information and resources on this topic by visiting FindLaw’s homestead protections section. You can also contact an experienced Wisconsin bankruptcy attorney or Wisconsin real estate attorney if you would like legal assistance with a bankruptcy or real estate case.

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