Bankruptcy in Missouri
Are you contemplating bankruptcy or hiring a bankruptcy attorney in Missouri? 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 Missouri
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 Missouri, 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.
Bankruptcy cases in Missouri are heard by 1 of 2 courts; U.S. Bankruptcy Court for the Eastern District of Missouri, and the U.S. Bankruptcy Court for the Western District of Missouri. Your case will be heard in one of these courts.
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 Missouri 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.
Federal Courts state that there are several options to pursue instead of settling on Chapter 7 bankruptcy. For small business owners who desire to remain in business rather than liquidate, you might consider filing under Chapter 11 bankruptcy. This allows you to seek debt relief either by lowering the debt itself, or extending the time period in which the debt must be repaid. However, it should be noted that Chapter 7 filings make up nearly 80% of yearly bankruptcy filings in the U.S.
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 U.S. Courts, most chapter 11 cases deal with a business that wished to restructure its debt and pay off creditors, without liquidating assets and losing control of the business. The courts will generally allow a restructuring agreement of 3 to 5 years to take place, however, the plan cannot be so long that the court finds it unfeasible or unfair to the creditor.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Missouri 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 give you the opportunity to have some or most of your debts discharged.
Missouri Bankruptcy Law states that chapter 13 is generally a good choice for individuals who are looking to take control of whatever circumstance has led them to a bankruptcy situation. Chapter 13 allows the debtor to work with an attorney to establish a 3 to 5-year timeline and a restructuring of a payment plan. In order to wipe away their debt based on their existing income. However, you should note that some individuals must file chapter 13 because they have too much income to file a chapter 7. An experienced Missouri attorney can help you make the distinction.
The Bankruptcy Process in Missouri
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 Missouri 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.
Up Solve provides an overview of the bankruptcy process in Missouri. You’ll need to determine which type of bankruptcy you’re filing, and if bankruptcy can erase your debt. After you’ve discovered if you qualify for bankruptcy you’ll find out what property you can exempt and stop paying any qualifying debts. You’ll also need to take a credit counseling class. An experienced attorney in Missouri can almost certainly help ease the burden of this process.
Homestead and residential property are exempt under Missouri law, up to $15,000. Motor vehicles can get protection up to $3,000. Domestic support, insurance, and public benefits can also see protection as well. In addition, Missouri has a wildcard statute, which allows you to protect up to $600 in personal property, with an additional $1,250 if you are the head of the household.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Missouri Lawyer
Hiring a local bankruptcy lawyer in Missouri 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 Missouri 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 Missouri can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Missouri 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!