Bankruptcy is governed by federal law, which means that it's basically the same from state to state. A Chapter 7 filing requires that the debtor place most of his assets with the bankruptcy court, and the court liquidates them and divides the proceeds among his creditors. A Chapter 13 filing can be elected instead if the debtor has enough money to pay at least a portion of his debts. The court helps set up a reorganization plan so debtors can pay these outstanding bills. Under both filings, the debtor emerges from bankruptcy with most of his debts erased. Living in Maine has several impacts on bankruptcy.
Places in Maine to File For Bankruptcy
Two Maine cities have federal bankruptcy courts: Bangor and Portland. You must file for bankruptcy based on the county in which you live. The U.S. Bankruptcy Court's website provides information on which courts cover Maine's various counties.
Maine's Income Limits for Bankruptcy Filings
If your average monthly income is less than Maine's median income, you're eligible to file Chapter 7. Otherwise, you must pass a stringent means test or file for Chapter 13 instead.
How Long Can My Chapter 13 Plan Be?
If your average monthly income is less than Maine's median income, your Chapter 13 plan can't exceed 36 months unless the bankruptcy court finds that good cause exists to extend it. Then you might have up to 60 months. If your average monthly income is greater than or equal to Maine's median income, your Chapter 13 plan generally must be 60 months in length.
Maine Exemptions From Bankruptcy Proceedings
Exemptions allow you to exclude property from the bankruptcy proceedings so it can't be liquidated to pay your creditors. Federal exemptions are not available in Maine. Some of the most common state exemptions for Maine include the following:
- Residence: Your house, a cooperative that owns the property you use as your residence, or a burial plot, up to a limit of $47,500. Up to $95,000 is exempt if minors live in the residence, or if you are age 60 or older, or physically or mentally disabled.
- Motor vehicle: One motor vehicle, not to exceed $5,000 in value
- Clothing, furniture and appliances not to exceed $200
- Jewelry not to exceed $750
- Professional books and tools not to exceed $5,000
- Furnaces, stoves and fuel. Fuel is limited to 10 cords of wood, 5 tons of coal or the equivalent of 10,000 gallons of heating oil.
- Food: Up to a six-month supply of food and seed, or feed and tools required to raise or harvest food for one season
- Commercial farm equipment, a fishing boat or logging equipment
- Your interest in any life insurance contract up to $4,000, as well as dividends and interest
- Prescribed health aids
- Disability benefits and pensions: This generally includes benefits from Social Security, the Veterans' Administration, unemployment compensation, disability or illness insurance, alimony, IRAs up to $15,000, and pension payments. However, there are some exceptions.
- Legal awards under a crime victim's reparations law, due to wrongful death, or from a life insurance contract for a person on whom you are legally dependent. Bodily injury awards not to exceed $12,500 and payments for loss of future earnings are also exempt.
- Other property not to exceed $400
- Unused residence exception: Up to $6,000 for any unused portion of the residence exception
Get Help From A Bankruptcy Attorney
As bankruptcy laws in Maine are complicated and your case is unique, please contact a local bankruptcy lawyer.