Everyone experiences the occasional hardship. But if you're struggling to stay financially afloat with no relief in sight, bankruptcy may help get you back on an even keel. Bankruptcy is a protection offered under federal law. There are two main types. Chapter 7 is the more traditional version, in which assets are sold, or liquidated, to pay creditors as much as possible. Then, your financial slate is wiped clean. With Chapter 13, debts are reorganized, and a payment plan is drawn up to settle them over a period of time.
Although bankruptcy is federally mandated, the rules vary a bit by state. North Dakota residents considering bankruptcy should be aware of some key guidelines.
Where Do You File Bankruptcy?
All North Dakota residents seeking bankruptcy protection must file in Fargo.
Who Can File Chapter 7?
To qualify for Chapter 7, you must earn less on average each month than North Dakota's median income. Those who earn more than the median monthly income in North Dakota must be able to pass a stringent means test before they can file Chapter 7.
How Long Will a Chapter 13 Plan Last?
The terms of a Chapter 13 repayment plan vary based on a variety of factors. The duration depends on your income. If you earn less than the median income in North Dakota, you can expect your plan to last no more than 36 months. In some cases, if you are able to prove good cause, the court may approve an extension to a maximum of 60 months. Bankruptcy filers who earn more than North Dakota's median income typically get 60-month repayment plans.
What Property CanYou Keep?
Each state maintains a list of exemptions—items that are exempt from liquidation in a Chapter 7 filing. The federal government maintains a list of exemptions, too. While some states allow you to choose which list you would like to use, North Dakota does not. You must use the North Dakota list, which includes exemptions for:
- Your home, valued to $100,000
- A motor vehicle, valued to $2,905 ($32,000 for a vehicle that has been modified to accommodate a disability)
- Minimum of 75 percent of weekly earnings or 40 times the federal minimum wage, whichever is greater
- Personal and household items, such as books, clothing (valued to $5,000), and food and fuel to last one year
- Certain insurance proceeds
- Personal injury and wrongful death recoveries valued to $7,500
A Personal Bankruptcy Lawyer Can Help
Bankruptcy laws in North Dakota can be complicated. For more detailed, specific information relative to your current position, please contact a North Dakota bankruptcy lawyer.