Are you considering filing for a Missouri bankruptcy? If yes, it is crucial to know every necessary thing about this process. As an individual, who is unable to repay your debts, you may file for any of the personal bankruptcy (consumer bankruptcy) debts that fit your situation. If you are filing for a Missouri bankruptcy, you either ask the court to discharge or forgive some of your debts, or you seek approval for a debt repayment plan.
You may find this process to be complicated or challenging. Therefore, to help you through, you will need the help of a Missouri bankruptcy attorney. Our law firm in Missouri has a strong commitment to provide the best attorney that will help you through the whole process, and we are reputable for the success of our cases.
Before reaching out to us, we want you to familiarize yourself with the necessary information on Missouri bankruptcy. This is the aim of this article, which is designed to provide you with the essential information on Missouri bankruptcy and the Missouri bankruptcy process.
The Missouri Bankruptcy Courts
The U.S. Bankruptcy Court attends to all bankruptcy cases. There are two U.S. Bankruptcy Courts in Missouri. There is the Western District and the Eastern District. For those living in Kansas City, you would file your claim in the Western District, while for those living in St. Louis, you would file your claim in the Eastern District. This means that where you stay in Missouri determines the bankruptcy court to go to if you want to file for Missouri bankruptcy. If you are still not sure about the appropriate court that you are to go to, kindly reach out to us at our law firm.
Types of Missouri Bankruptcy
In the case of consumer bankruptcy in Missouri, there are two major types – Chapter 7 and Chapter 13. Known as the liquidation or straight bankruptcy, Chapter 7 is the simplest and quickest type of bankruptcy. For this type of bankruptcy, the court discharges your debt after a court-appointed trustee evaluates whether he or she can seize some of your property in order to sell for making repayment to certain creditors.
For chapter 13, you are allowed to seek approval from the court to abide by a debt repayment plan that will last for 3 – 5 years. A major requirement is that you have an income. Businesses may be eligible to file for Chapter 11, which is similar to a Chapter 13 in the sense that the business and their creditors enter into a repayment agreement, but Chapter 11s tend to be far more complex than Chapter 13s. Also, a family farmer or fisherman can file for Chapter 12 bankruptcy, which is much similar to Chapter 13.
It is important to note that your property can be exempt and non-exempt. The property you can keep during bankruptcy is exempt, while the property you can’t keep is non-exempt. Although the list of exempt property tends to change regularly, it often includes property like your house, clothing, furniture, and car (not more than one car, however). The non-exempt property consists of a second home, stocks, extra cars, and investments. For a Chapter 7, the trustee will seize and sell only the non-exempt property.
Qualifying for Chapter 7 Bankruptcy
If you want to know if you qualify for Chapter 7 bankruptcy, you have to take the means test. This test aims to prevent high-income earners from abusing the bankruptcy system. So how does this test works? The Missouri means test compares your recent income to the median income of similarly sized Missouri households. In Missouri, the median income for a single-person home is $48,212, while the median income for a four-person home in Missouri is $90,489 for bankruptcies filed after April 1, 2020. If your income surpasses this median, the means test will then look at your disposable income. This is the income left over after necessary expenses, such as food and housing, have been paid. If it turns out that you have enough disposable income to pay off your debt, you will likely not qualify for Chapter 7.
It is important to note that certain debts remain after you file for a Chapter 7 bankruptcy. The court will not discharge certain debts such as alimony, criminal fines, child support, divorce property settlements, student loans, and recently owed income taxes and property taxes. Also, you are expected to continue making payments on your mortgage and car loans as failure to do this may lead to a foreclosure or repossession.
Pros of a Missouri Chapter 7 filing
- You will likely get a fresh start. After the discharge of your bankruptcy, the only debts you have will be for secured assets on which you can choose to sign a “Reaffirmation Agreement.”
- You have instant protection against the creditor’s collection efforts and wage garnishment on the date of filing. This will stop collection calls and garnishments of paychecks or bank account.
- Wages you earn and the property you obtain (except for certain inheritances) after the bankruptcy filing date are all yours. This means that the creditors or the bankruptcy court will not seize them.
- There is no required minimum amount of debt.
- Your case will likely be over and totally discharged in about 3-6 months.
Cons of a Missouri Chapter 7 filing
- You will lose your non-exempt property, which will be sold by the trustee. If you intend to keep a secured asset (such as a home or car) that is not entirely covered by your Missouri bankruptcy exemptions, you should not go for Chapter 7 filing.
- If you face foreclosure on your home, the automatic stay created by your Chapter 7 filing only acts as a temporary defense against such foreclosure.
- If you filed a prior case and got a discharge of your debts, you can only file a second Chapter 7 bankruptcy case 8 years after you filed the first case.
- You cannot pick and choose which debts to list in your bankruptcy. All of your debts must be listed.
Qualifying for Chapter 13 Bankruptcy
For a Chapter 13 Missouri bankruptcy, there are caps on the amount of debt you are allowed to have. The limit on secured debt is $1,081,400, while the limit on unsecured debt is $360,475. Secured debt entails a loan you pledged some asset for, while unsecured debt is a loan you did not pledge an asset for. If you surpass any of these debt limits, you will likely not qualify to file for Chapter 13. You may consider speaking with a Missouri bankruptcy attorney at our law firm about filing for Chapter 11. However, it is important to note that the debt limit is periodically changed.
Pros of a Missouri Chapter 13
- You will likely be able to keep all your property, exempt and non-exempt.
- You have instant protection against creditors’ collection efforts and wage garnishments.
- If you are able to meet the plan terms, you will be protected against any form of foreclosure on your home by lenders.
- There is a shorter time that you are prevented from filing for bankruptcy after you conclude a Chapter 13. .
Cons of a Missouri Chapter 13
- You will be caught up in the bankruptcy court process for a period of the 3-5 year plan.
- Stockbrokers and commodity brokers cannot file a Chapter 13 bankruptcy petition.
Hire a Trusted Law Firm to help you with your Missouri bankruptcy
Live in Missouri and need help filing for bankruptcy, we are your best choice. Whether you live in Jefferson City, Kansas City, St. Louis, or any part of the state, we can offer you the best Missouri bankruptcy attorney that can help you throughout the bankruptcy process. Get in touch with us today.