There are a handful of components that are associated with financial troubles. A few common reasons include heavy debt, foreclosure, divorce, serious illness, or sudden unemployment.
In fact, the average credit card debt in Missouri is a whopping $5,177 per person. In addition, foreclosure rates are also as staggering, one out of every 3,669 MO homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are probably battling other personal problems that come with being in debt. The fear of losing your automobile, house or your money can drain a person mentally & physically. You have probably even considered Claiming Bankruptcy .
If you are thinking “Should I File Bankruptcy?” you are surprisingly not alone. Around a million people file bankruptcy each year in America. Bankruptcy is a device created by the US Government to help struggling Americans find relief from overwhelming debt. You may want to think about bankruptcy relief if it’s best for you.
What Is Bankruptcy?
Bankruptcy offers people the freedom to get out from underneath considerable debt while still working with lenders in a legal capacity. It is started by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is settled, the filer will ‘exit’ and will have a chance for a fresh start on their finances.
During a bankruptcy, a trustee is appointed to oversee the deatils of the case. His or her responsibilities will vary and depend on whether the individual has filed for Chapter 7 or Chapter 13 bankruptcy.
Did you know that Missouri ranks #14 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 352 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
People in Missouri, who claim bankruptcy, can choose to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. What is the difference? Take a look at the descriptions below for more information:
In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.
Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation
A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year time frame.
In order to determine which chapter a person will file, he or she will have to assess their ability to repay under the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The objective 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, they will be able to file for Chapter 13, as described above.
What Are Bankruptcy Exemptions?
The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. 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 property up to $15,000, or mobile home up to $5,000 (joint owners may not double). Tenancies by the entirety are exempt without limit as to debts of one spouse.
- Burial grounds up to $100 or 1 acre.
- Motor vehicles up to $3,000 in aggregate; clothing, household goods, appliances, furnishings, books, animals, musical instruments and crops up to $3,000 total; health aids; jewelry up to $500 (wedding or engagement ring up to $1,500); wrongful death recoveries reasonably necessary for your support.
- Health savings accounts.
- The greater of the following: 30 times the federal minimum hourly wage or 75% minimum of weekly earnings (90% for head of household).
- 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 $1,283,025.
- Public officers and employees.
- City employees.
- Police and highway employee department employees
- State employees.
- Teachers and school employees
- ERISA-qualified retirement accounts; stock, bonus, pension, annuity, and retirement payments needed for support.
- Workers’ compensation.
- Unemployment compensation.
- Social Security, veterans’ benefits, and public assistance.
Tools of Trade
- Tools, books, and implements to $3,000.
Alimony and Child Support
- Alimony, support, and maintenance up to $750 per month.
- Disability, or illness benefits needed for support; unmatured life insurance policy; fraternal benefit society benefits up to $5,000 that were purchased more than 6 months before filing; life insurance interest, loan value or dividends that were purchased more than 6 months before filing for bankruptcy up to $150,000.
- Particular business partnership property.
- $600 of any property. If you are the head of your family, an additional $1,250 plus $350 per child under age 21 and for each dependent with a disability.
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 a lawyer to declare relief. Individuals are allowed 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 recommended.
Filing Bankruptcy without an Attorney
A simple Chapter 7 filing 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
Generally speaking, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy lawyer is there to represent you and not the creditors.
An attorney is also accustomed with exemption laws. In addition, 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 MO, 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 Missouri
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 MissouriThomas F. Eagleton United States Courthouse
111 South Tenth Street
St. Louis,MO 63102
Missouri Eastern Bankruptcy Court
Charles Evans Whittaker United States Courthouse
400 East Ninth Street
Kansas City,MO 64106
Missouri Western Bankruptcy Court
Christopher S. Bond United States Courthouse
80 Lafayette Street
Jefferson City,MO 65101
Missouri Western Bankruptcy Court
Additional Missouri Resources
Foreclosure Help Program
Disability SSDI Benefits