In a tough economic climate, it can be difficult to weather financial storms such as unemployment or an underwater mortgage. That's why federal law lets people file for bankruptcy. Bankruptcy allows debtors to either catch up or eliminate their debts and move on. The federal government offers a number of bankruptcy options, but Chapters 7 and 13 are the ones consumers most commonly use. Chapter 7 lets people erase most debts and start over after their possessions are sold to repay creditors, while Chapter 13 gives debtors a chance to create manageable payment plans over a number of years. If you live in Idaho, you should be aware of how the state's bankruptcy laws can impact you.
Filing for Bankruptcy in Idaho
Idaho's main bankruptcy courts are in Boise, Coeur d'Alene, Moscow and Pocatello. There are many branches as well. You must file at the court closest to where you live. Visit the U.S. Court's website for the District of Idaho to find the location nearest you.
Eligibility for Chapter 7
Idaho residents can file for Chapter 7 liquidation bankruptcy if their incomes are less than the state median of $40,355 for one person. The limit increases for additional family members, up to $63,236 for families of four and even higher for larger families. Those who earn more than the median may still be able to file for Chapter 7, but they must pass a stringent means test.
Chapter 13 Repayment Plans
Income also determines how long debtors have to repay their debts under a Chapter 13 reorganization bankruptcy. If your income is less than the state median, you usually have 36 months. The court may allow longer if the judge believes you have a good reason. If your income is more than the median, you'll may have up to 60 months.
You Can Keep Some Property
Bankruptcy law allows exemptions, dollar amounts of property you're permitted to protect from liquidation or sale. Common exemptions include equity in homes, vehicles, jewelry, retirement accounts, pensions and household items. Although the federal government has its own set of exemptions, if you live and file in Idaho you must use those that the state has assigned.
Idaho's homestead exemption for a residence is $100,000, far more generous than the federal homestead exemption of $21,625 per person, twice that for married couples who file together. Idaho also allows residents to keep 75 percent of their weekly disposable earnings, or 30 times the federal hourly minimum wage, whichever is more. The federal level is 75 percent.
You must have lived in Idaho for two years to claim the state's exemptions. An attorney can help you figure out if you can use Idaho's exemptions or if you must use the federal list.
Get Legal Assistance
This article provides a brief, general introduction to bankruptcy. For more detailed, specific information, please contact a Idaho bankruptcy lawyer.