Bankruptcy in Rhode Island
For many Rhode Island residents, financial stress doesn’t just drain your bank account. It takes a toll on your health, your relationships, and your peace of mind. When bills pile up and collectors won’t stop calling, it’s easy to feel trapped in a situation with no way out.
Whether you’re dealing with credit card debt, medical expenses, or missed mortgage payments, bankruptcy can offer a legal solution. It can halt collections, pause foreclosure proceedings, and eliminate or restructure debt.
The state has its own rules, exemptions, and procedures that impact how much of your property you can protect. Without the right guidance, you could risk losing more than you need to.
That’s why getting legal help matters. We connect Rhode Island residents with experienced bankruptcy attorneys who understand local laws and can help you navigate every step of the process.
Types of Bankruptcy in , Rhode Island
Bankruptcy is a legal lifeline for individuals and businesses overwhelmed by debt. It offers a structured way to reduce or eliminate financial obligations and gives filers the chance to rebuild. In RI, you’ll need to demonstrate that your financial hardship makes it impossible to stay current on your payments.
If you’re falling behind, bankruptcy might give you the relief you need—but choosing the right chapter matters. Chapter 7, Chapter 11, and Chapter 13 all serve different purposes. Before you file, it’s essential to understand the pros and cons of each option. An experienced bankruptcy attorney can help you assess your situation and avoid costly mistakes.
In Rhode Island, all bankruptcy cases are handled by the U.S. Bankruptcy Court for the District of Rhode Island, located in Providence. This court oversees filings for individuals and businesses throughout the entire state.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can offer a clean break for those overwhelmed by debt and looking to reset their finances. It’s a powerful tool, but it’s not a decision to make lightly.
Most people who qualify for Chapter 7 have experienced income loss or financial hardship that makes repayment impossible. While the process can eliminate unsecured debt, it may also mean giving up property that isn’t protected by exemptions. Once your case is filed, the court issues an automatic stay, which stops most collection efforts, including foreclosures and wage garnishments.
In Rhode Island, qualifying for Chapter 7 bankruptcy starts with the means test. It is a tool used to determine if your income falls below the state’s median for your household size. As of 2025, the annual median income thresholds are:
- 1-person household: $76,377
- 2-person household: $96,200
- 3-person household: $116,185
- 4-person household: $140,947
- For households larger than four, add $11,100 for each additional member.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is typically reserved for businesses or individuals with complex financial obligations. Unlike other forms of bankruptcy, it focuses on restructuring rather than liquidation. The goal is to create a workable plan—often spanning four to eighteen months—that allows you to reorganize your debt.
The key advantage? You can usually keep your assets while working with creditors to negotiate new terms. You have the breathing room needed to stay on track financially.
Filing for Chapter 11 bankruptcy involves detailed paperwork and strict documentation that lays out your complete financial picture. You’ll need to disclose your income, debts, expenses, and assets, and submit a reorganization plan.
Here are the key documents you’ll need:
- Voluntary Petition for Individuals Filing for Bankruptcy (Form B101)
- Schedules A/B through J (listing assets, liabilities, income, expenses, contracts, and leases)
- Statement of Financial Affairs (Form B107)
- Chapter 11 Statement of Current Monthly Income (Form B122B)
- Creditor Matrix with names and addresses of all creditors
- Proposed Disclosure Statement and Chapter 11 Plan of Reorganization
- Summary of Assets and Liabilities (Form B106)
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is built for individuals with steady income who need time to get back on top. In RI, once you file, the court appoints a trustee to review your debts, assets, and overall ability to repay what you owe.
Unlike Chapter 7, which involves liquidation, Chapter 13 is about restructuring. You’ll propose a repayment plan—typically lasting three to five years—that helps you catch up over time. How much flexibility you have will depend on your income and what property you’re trying to protect. If you stick to the plan, some of your remaining debt could be discharged once the term ends.
Another key difference is the court’s role in shaping your financial recovery. After filing, you’ll work with a trustee who reviews your repayment plan and ensures it complies with bankruptcy laws.
The Bankruptcy Process in , Rhode Island
No one plans to file for bankruptcy—but sometimes, it’s the most responsible option available. If it’s clear that you won’t be able to pay off your debts within the next five years, filing can offer a path forward. Bankruptcy isn’t a magic fix, but it can help you stop the downward spiral and give you a framework to regain control.
In Rhode Island, the first step is gathering your financial records. That includes everything from your income and living expenses to debts and property. The court needs a complete and accurate snapshot of your finances to evaluate your case.
Filing for bankruptcy in Rhode Island involves navigating both federal procedures and state-specific laws, particularly when it comes to protecting your assets through exemptions. Rhode Island allows filers to choose between state and federal exemption lists, but you must select one set—you can’t mix and match.
These exemptions determine what property you can keep during bankruptcy. Choosing the right exemption set is crucial to safeguarding your assets and achieving a fresh financial start. Rhode Island currently offers:
Key Rhode Island State Bankruptcy Exemptions:
- Homestead: Protects up to $500,000 in equity in your primary residence.
- Motor Vehicle: Up to $12,000 in equity for a single vehicle.
- Personal Property:
- Household furniture, goods, and supplies up to $9,600 (spouses may not double).
- Jewelry up to $2,000.
- Books up to $300.
- Clothing and burial plot.
- Wildcard: $6,500 of any property.
- Tools of the Trade: Tools used for work up to $2,000; library of a practicing professional.
- Wages:
- Earned but unpaid wages up to $50.
- All earned but unpaid wages for a member of the military on active duty or a sailor.
- Wages of a spouse or minor children for one year after receiving public benefits.
- Retirement Accounts: Tax-exempt retirement accounts, including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans.
- Public Benefits: Exempts various public assistance benefits, including Social Security, unemployment compensation, workers’ compensation, and veterans’ benefits.
Work With an Experienced , Rhode Island Lawyer
Rhode Island’s exemption laws are generous in some areas, but understanding how to apply them correctly is critical. Choosing the right chapter and filing accurately can make all the difference in how much property you keep and how smoothly your case moves forward.
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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