It's a fact of modern economic life: Tough financial times make it more likely that people will fall behind with their bills and need help paying their debts. That's why federal law gives debtors the option of filing for bankruptcy. Chapters 7 and 13 are the most common types of bankruptcy filings used by individuals. Chapter 7 liquidation bankruptcies are like a reset button that allows debtors to erase most debts and keep some of their property while the rest is sold to pay creditors. Chapter 13 lets people keep all property and repay their debts over a number of years. Though bankruptcy laws are federal, Kansas law also has an impact on filing.
Kansas Filing Locations
Kansas has bankruptcy courts in Wichita, Topeka and Kansas City, as well as branches in other cities. You must file at the court closes to where you live. The United States Bankruptcy Court's website for the District of Kansas can guide you to the proper location.
Filing for Chapter 7
Kansas residents can file for Chapter 7 liquidation bankruptcy if their income is less than the state median of $42,924 for one person. This income limit increases with each additional family member. The limit for a family of four is $74,959, and it increases even more for larger families. People who make more than the median might still be able to file under Chapter 7 if they pass a strict means test.
Repaying Debts Under Chapter 13
Income also determines how long Kansas residents have to repay their debts under Chapter 13 plan. Debtors who earn less than the state's median are usually allowed 36 months, but the court can extend that if there's a good reason. Debtors who earn more than the state median may have up to 60 months to repay creditors.
Exemptions Determine What Property You Can Keep
Common bankruptcy exemptions include equity in residences, cars and trucks, retirement funds and pensions, clothing, and items and tools you need for work. Although federal law provides its own list of exemptions, Kansas residents must use their state's exemptions. For example, the Kansas exemption for a home is unlimited, although there are acreage restrictions. The federal homestead exemption is $21,625 per person, twice that that for married debtors. Kansas also allows residents keep up to 75 percent of their disposable weekly earnings, or 30 times the federal minimum wage, whichever is more. The federal level is 75 percent.
You must live in Kansas for two years to use the state's exemptions. If you've lived there for less than two years, an attorney can help you figure out what exemptions you should use.
Consult an Attorney
Bankruptcy laws in Kansas are complicated. For specific information, please contact a Kansas bankruptcy attorney.