Bankruptcy in Idaho
Are you contemplating bankruptcy or hiring an Idaho bankruptcy attorney? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in Idaho
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Idaho, to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11, or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Idaho bankruptcies are under the jurisdiction of the U.S. Bankruptcy Courts for the District of Idaho. The state is divided into 4 districts (Southern, Northern, Central, and Eastern), with a bankruptcy court located in each one.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Idaho who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car, or some other assets.
However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
Before filing a Chapter 7 bankruptcy in Idaho, you must pass a Means Test. In short, your family’s income must be lower than the median income of Idaho families of the same size. When you file a bankruptcy petition in Idaho, an automatic stay prevents your creditors from continuing their attempts to collect your debt. However, under Local Bankruptcy Rules, a creditor can request an exemption from the court to continue collecting the debt. Bankruptcy law also requires that you undergo credit counseling before you file. This can typically be completed online, and the Department of Justice maintains a list of approved providers.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
According to the Idaho Bankruptcy Court, Chapter 11 bankruptcies are the most complex and most flexible of the bankruptcy options. However, they also have the lowest success rate in Idaho, at about 10% or less. Chapter 11 filing forms are available through the US Bankruptcy Court website. Electronic filing is permitted, so you can sign forms and pay fees through the Idaho Electronic Court Filing system.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Idaho after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also allow you to have some or most of your debts discharged.
You can use the Chapter 13 packet to file your Idaho Chapter 13 bankruptcy. Required documents include:
- Petition to file
- Credit Counseling Certificate
- Summary of assets and liabilities and income
- Chapter 13 payment plan
The Bankruptcy Process in Idaho
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Idaho to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets, and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
Unlike some states, Idaho does not give you a choice between the federal and state exemptions. You must use the exemptions provided by Idaho code, which include:
- Equity in your homestead, up to a value of $175,000
- A motor vehicle, valued up to $10,000
- Household furnishings up to a value of $7,500
- Disability, alimony, pension, and retirement benefits (unlimited value)
- Wildcard exemption for any personal property valued up to $1,500
At least six months before filing for bankruptcy, it’s important to cut back on unnecessary spending and avoid increasing your credit card balances. Additionally, you’ll need to complete an approved credit counseling course, which can typically be done online or over the phone.
This credit counseling is designed to teach financial literacy and encourage better money management habits. Upon completion, you’ll receive a certificate that must be included with your bankruptcy filing. Without this certificate, the court will reject your petition, so completing this step is essential.
Work With an Experienced Idaho Lawyer
Hiring a local bankruptcy lawyer in Idaho during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Idaho attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Idaho can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Idaho state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
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