Money matters can be stressful for anyone. But when you are unable to stay on top of debt payments, and the situation is spiraling out of control with no end in sight, filing bankruptcy can help get you back on track.
There are two main types of bankruptcy for individuals. Chapter 7 involves selling, or liquidating, assets to repay creditors as much as possible. After that, the remaining debts are wiped out. With Chapter 13, debts are reorganized into a payment plan over a set period of time. The type that is right for you depends on a number of factors.
Although bankruptcy is part of federal law, the rules about filing differ from one state to the next. Missouri residents considering bankruptcy should be aware of some key information pertaining to filing in that state.
Where Do You File Bankruptcy in Missouri?
Missouri has two districts for filing bankruptcy:
- Eastern District, with locations in St. Louis, Hannibal, and Cape Girardeau
- Western District, with locations in Kansas City, Jefferson City, Joplin, Springfield, and St. Joseph
You must file in the district in which you live.
Can You File Chapter 7?
In order to file Chapter 7, your average monthly income must be less than the median monthly income in Missouri. If you make more money than Missouri's mean income, there may still be a chance you qualify to file Chapter 7, but only if you are able to pass a stringent means test.
If You File Chapter 13, How Long Will Your Repayment Plan Last?
The duration of a Chapter 13 repayment plan is also dependent on your income. For those who earn less than Missouri's median income, the limit is 36 months, unless there is good cause to extend it. If an extension is granted, the limit is usually 60 months. Those who earn the same as, or more than, the median income in Missouri generally get 60-month plans.
What Property Is Exempt from Liquidation?
In order to ensure that you are not without basic necessities, state and federal laws include a list of exemptions—property that cannot be sold as part of a Chapter 7 filing. Some states allow you to choose between the federal list of exemptions or the list from your state. But in Missouri, you must adhere to state exemptions. They include:
- Real property valued to $15,000 or a mobile home to $5,000
- Motor vehicle valued up to $3,000
- Minimum of 75 percent of weekly earnings (90 percent if head of family) or 30 times the federal minimum hourly wage, whichever is more
- Personal and household items, such as clothing, furniture, appliances, books, crops, animals, and musical instruments, totaling in value up to $3,000
- Health aids
- Wedding rings valued up to $1,500; other jewelry valued to $500
- Items you need for your work, totaling up to $3,000
A Personal Bankruptcy Lawyer Can Help
For specific information relative to your current position, please contact a Missouri bankruptcy lawyer.