Wisconsin Statutes 779.87 – Escrow account or bond requirement
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Terms Used In Wisconsin Statutes 779.87
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when applied to states of the United States, includes the District of Columbia, the commonwealth of Puerto Rico and the several territories organized by Congress. See Wisconsin Statutes 990.01
(1) Requirement. A seller who enters a regulated prepaid maintenance agreement shall either maintain an escrow account or maintain a bond.
(2) Escrow account.
(a) Surety. If a seller maintains an escrow account, all proceeds received under any regulated prepaid maintenance agreement shall be deposited in the escrow account for the benefit of any customer who suffers a loss of prepayments for maintenance due to the bankruptcy or cessation of business by the seller.
(b) Not to be commingled. The seller shall not commingle the proceeds received under a regulated prepaid maintenance agreement with any other funds and any other funds which are commingled become a part of and shall be deposited in the escrow account. The seller may aggregate the proceeds received under several prepaid maintenance agreements in one escrow account.
(c) Interest. The seller may withdraw and retain for his or her own use any interest payments received on the escrow account.
(d) Not to be used prior to discharge. The seller may not withdraw or use the proceeds received under a regulated prepaid maintenance agreement which are deposited in an escrow account prior to the discharge of the prepaid maintenance lien under s. 779.91.
(e) Not subject to attachment. Until all prepaid maintenance liens are discharged, the escrow account is not subject to garnishment, execution, levy, attachment or foreclosure except as provided under s. 779.92.
(3) Bond.
(a) Surety. If a seller maintains a bond, it shall be issued by a surety company licensed to do business in this state.
(b) Amount; filed. The principal sum of the bond shall be $25,000 at all times. A copy of the bond shall be filed with the department of financial institutions.
(c) For benefit of customer. The bond shall be in favor of the state for the benefit of any customer who suffers a loss of prepayments for maintenance due to the bankruptcy or cessation of business by the seller. Any customer claiming against the bond may maintain an action against the seller and the surety.
(d) Surety’s obligation. If the seller fails to perform maintenance under a regulated prepaid maintenance agreement, the surety shall either perform or procure the performance of that maintenance or pay the customer the amount of the prepayment made under the agreement.
(e) No lien. If a seller maintains a bond under this subsection, a customer does not have a prepaid maintenance lien under s. 779.88.