There are many contributing factors that are associated with financial hardship. Some common reasons include heavy debt, illness, divorce, foreclosure, or loss of a job.
In fact, the average credit card debt in South Dakota is a whopping $4,842 per person. In addition, foreclosure rates are also as staggering, one out of every 17,560 SD homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are more than likely struggling with other personal problems that come with being in debt. The fear of losing your automobile, home or your money can drain a person emotionally. You may have even considered Filing for Bankruptcy .
If you are thinking “Can I File Bankruptcy?” you are definitely not alone. Close to a million people file bankruptcy each year in the US. Bankruptcy is a means created by the US Government to help struggling Americans find relief from uncontrollable debt. You may want to consider personal bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy provides people with the freedom to get out from underneath considerable debt while still working with lenders in a legal capacity. It is initiated 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’ with a fresh new start.
During a bankruptcy, a trustee is appointed to oversee the particulars of the matter. His or her responsibilities will vary and depend on whether the person has filed for Chapter 7 or Chapter 13 bankruptcy.
Did you know that South Dakota ranks #45 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 140 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
Individuals or couples in South Dakota, who claim bankruptcy, can choose to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. Want to know the difference? Look 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.
The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.
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 decide which chapter an individual can file, they will have to assess their ability to repay using the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:
- income and expenses
- household size and composition
- debt-to-income ratio
If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.
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, including mobile home if larger than 240 square feet and registered in state at least 6 months prior to filing bankruptcy, of unlimited value; but cannot exceed 1 acre in a town or 160 acres elsewhere. Sale proceeds are exempt for 1 year after sale up to $30,000 (up to $170,000 if a widow, widower, or over 70 years old and not married). Spouses may not double. Spouse or child of a deceased owner may also claim exemption. Cannot include gold or silver mine, mill, or smelter.
- All debtors may claim clothing; food and fuel to last 1 year; bible and books up to $200; pictures; church pew; burial plot; health aids professionally prescribed.
- Cemetery association property.
- Earned wages owing 60 days prior to filing for bankruptcy, needed for support.
- Wages of prisoners in work programs.
- 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 employees.
- City employees.
- ERISA-qualified benefits up to $1,000,000 of income and distribution.
- Crime victims’ compensation.
- Public assistance.
- Unemployment compensation.
- Workers’ compensation.
Tools of Trade
See Personal Property.
- Life insurance proceeds if beneficiary is surviving spouse or child up to $10,000.
- Health benefits up to $20,000; endowment or life insurance policy, proceeds or cash value up to $20,000.
- Annuity contract proceeds up to $250 per month.
- Life insurance proceeds if policy prohibits use to pay creditors.
- Fraternal benefit society benefits.
- Court ordered alimony or support if not a lump sum, up to $750 per month.
- $5,000 of any personal property; $7,000 if head of family.
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
Current laws do not require filers to hire a lawyer to declare bankruptcy relief. 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. Filing alone is not for the faint of heart.
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
For most people, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy attorney 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 SD, 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 South Dakota
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 South DakotaUnited States Courthouse
400 South Phillips Avenue
Sioux Falls,SD 57104
South Dakota Bankruptcy Court
United States Post Office and Courthouse
225 South Pierre Street
South Dakota Bankruptcy Court
Additional South Dakota Resources
Foreclosure Help Program
Disability SSDI Benefits