Most consumer credit transactions in Wisconsin are governed by the Wisconsin Consumer Act. A consumer loan is one under $25,000 issued by someone in the business who regularly grants credit and is incurred for personal, family, household, or certain agricultural purposes. If you default by failing to make payments or not complying with the loan terms on a consumer loan, the following steps can occur if pursued by the merchant/creditor:
Upon default, the merchant/ creditor must give the debtor written notice of exactly what must be done to correct the default. The debtor must be told the exact amount overdue and the exact amount that must be paid.

The debtor has 15 days to correct the default before the merchant can demand full payment or get a court order to require payment.

A debtor is entitled to a hearing in front of a judge on whether a default has occurred. The judge can order the debtor to pay the outstanding balance in full or surrender the collateral.

If the outstanding balance cannot be paid in full, the court may order payment to the creditor from the debtor’s wages (garnishment) and/or repossession of any goods that served as collateral for the loan.

How can you stop harassment by a collection agency?

A creditor may refer the outstanding debt to a collection agency which tries to collect the debt. Collection agencies and creditors are prohibited from doing the following:

threatening the debtor with criminal prosecution;

using obscene language in any personal contacts with the debtor;

communicating with the debtor’s employer about the debt prior to obtaining a court order;

discussing an account with neighbors or relatives; and

attempting to collect a debt after the debtor has filed bankruptcy.
If a collection agency engages in any of the above, you may sue it and be awarded a judgment plus reimbursement of your attorney fees. For more information, contact the Department of Financial Institutions at (608) 264-7969, or (800) 452-3328 (in Wisconsin only).

Can a creditor still use collection methods even if you pay some money regularly on a debt?

Yes. Creditors are not required to accept partial payments and can demand full payment.

Can you stop payment on a check?

You have the right to issue a stop-payment order on your checking account. You must give the bank a reasonable amount of time to act on the order, and there usually will be a charge. If you give the order verbally, it is valid for 14 days. If you give the order in writing, it is valid for six months and can be renewed for another six months.

Stopping payment on a check does not always protect you. If the check bounces, the person to whom you wrote the check may sue you for the check amount. Unless your checks have been lost or stolen, consider consulting an attorney before you stop payment.

Do you have three days to reconsider a contract?

In certain circumstances, there is a three-day right to cancel a contract for a consumer purchase. This cooling-off period applies to most credit transactions and cash sales of $25 or more that occur away from the employer’s/seller’s regular place of business.

It does not apply to:

cash purchases at the seller’s regular place of business;

real estate;

purchases at auctions;

items used for agricultural purposes; and

insurance.

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