There are many contributing factors that are associated with financial troubles. Some common reasons include unmanageable debt, serious illness, divorce, foreclosure, or loss of a job.
In fact, the average credit card debt in Kansas is a whopping $5,282 per person. In addition, foreclosure rates are also as staggering, one out of every 3,841 KS homes is currently in foreclosure.
If you have found yourself in similar situations, then you are probably battling other personal problems that come with being in debt. The fear of losing your vehicle, home or your income can drain a person emotionally. You may have even considered Filing for Bankruptcy .
If you are thinking “Is Bankruptcy Best For Me?” you are undoubtedly not alone. Around a million people file bankruptcy each year in America. Bankruptcy is a tool established by the US Government to help struggling Americans find relief from unpayable debt. You may want to consider filing bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy gives people the chance to lift their financial burden while still working with lenders in a legal capacity. It is started by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is done, the filer will ‘exit’ with a fresh new start.
Throughout the bankruptcy process, a trustee is appointed to oversee the particulars of the case. His or her duties will vary and depend on whether the individual has filed for Chapter 7 or Chapter 13 bankruptcy.
Did you know that Kansas ranks #27 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 260 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
Individuals or couples in Kansas, who claim bankruptcy, can choose to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. What is the difference? Look below for more information
The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.
The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.
If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. You will be allowed to keep your valuable assets over a 3- to 5-year time frame.
In order to determine which type of bankruptcy an individual will file, he or she will have to determine their ability to repay using the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:
- income and expenses
- household size and composition
- debt-to-income ratio
For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.
What Are Bankruptcy Exemptions?
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- Real estate, manufactured home, or mobile home that you use as your residence of unlimited value. The acreage is limited to 1 acre in a city or town, or 160 acres on a farm.
- Motor vehicle up to $20,000 (no limit if equipped or designed for a disabled person); clothing to last 1 year; household equipment and furnishings; food and fuel to last 1 year; jewelry and articles of adornment up to $1,000; burial plot.
- Earned income tax credits
- Funeral plan prepayments.
- The greater of the following: 30 times the federal minimum hourly wage per week or minimum of 75% of disposable weekly wages. A bankruptcy judge can approve a higher amount for low-income debtor.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans), IRAS and Roth IRAs to $1,283
- Police officers and firefighters.
- State school employees.
- Public employees.
- State highway patrol officers.
- General assistance.
- Unemployment and worker’s compensation; crime victim’s compensation.
Tools of Trade
- National guard uniforms, arms, and equipment.
- Equipment, instruments, furniture, books, documents, breeding stock, seed, stock, and grain up to $7,500 total.
- Life insurance proceeds.
- Life insurance proceeds or cash value deposited into a bank account (not exempt if deposited within 1 year of filing for bankruptcy); disability and illness benefits; fraternal benefit society benefits.
- Liquor licenses.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
You are not required by law to hire an attorney to declare bankruptcy. People are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not for the faint of heart.
Filing Bankruptcy without an Attorney
A basic Chapter 7 proceeding that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that may not require an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
For most people, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy attorney is there to represent you and not in the interest of creditors.
An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in KS, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Kansas
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In KansasFrank Carlson Federal Building and United States Courthouse
444 Southeast Quincy Street
Kansas Bankruptcy Court
Robert J. Dole United States Courthouse
500 State Avenue
Kansas City,KS 66101
Kansas Bankruptcy Court
United States Courthouse
401 North Market Street
Kansas Bankruptcy Court
Additional Kansas Resources
Foreclosure Help Program
Disability SSDI Benefits