Bankruptcy in Vermont
Struggling with debt in Vermont can feel like a quiet storm—constant pressure with no clear way out. Whether it’s medical bills, job loss, or credit card debt piling up, financial trouble can hit when you least expect it. If you’re falling behind and can’t catch up, it may be time to explore your legal options.
Bankruptcy isn’t about failure—it’s about regaining control. Filing can immediately pause collections, stop wage garnishments, and give you the space to breathe. Depending on your situation, you might qualify to eliminate certain debts or reorganize what you owe into a manageable plan.
That’s where we come in. Our service connects Vermont residents with experienced bankruptcy attorneys who understand both state and federal law. Get guidance, clarity, and a plan that’s tailored to your situation.
Types of Bankruptcy in Vermont
Bankruptcy is a legal tool designed to help individuals and businesses regain their financial footing. It can eliminate some or all of what you owe, giving you a chance to start over.
It’s important to understand that not every type of debt can be discharged. Obligations like child support, certain taxes, alimony, and most student loans usually remain. If you’re falling behind, you may qualify to file under Chapter 7, 11, or 13—each with different requirements and outcomes.
In Vermont, all bankruptcy cases are handled by the United States Bankruptcy Court for the District of Vermont. Additionally, some court proceedings are held in Rutland at 151 West Street.
Chapter 7 Bankruptcy
For many people, Chapter 7 offers a clean financial slate when other solutions fall short. It’s often the right move if you’re buried in debt with no realistic way to pay it down. That said, it’s not a one-size-fits-all fix. Before filing, take a close look at your income, expenses, and long-term goals.
Chapter 7 is typically available to people with little or no steady income or those facing a major financial setback. While it can wipe out many unsecured debts, you may have to part with certain assets—including your car, your home, or other non-exempt property. Filing triggers an automatic stay that stops most collection efforts, such as wage garnishments, foreclosure actions, and creditor lawsuits.
If you’re considering Chapter 7 bankruptcy in Vermont, the means test is a crucial step in determining your eligibility. This test compares your average monthly income over the past six months to the state’s median income for a household of your size. As of 2025, Vermont’s median annual income thresholds are:
- 1 person: $76,949
- 2 people: $94,524
- 3 people: $118,960
- 4 people: $142,492
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is one of the more intricate forms of debt relief, typically used by businesses. Instead of wiping out debt or following a fixed repayment plan, it allows you to reorganize what you owe. This reorganization plan usually spans four to eighteen months, though timelines can vary depending on the case.
Filing for Chapter 11 bankruptcy involves a detailed, paperwork-intensive process that requires complete transparency. Whether you’re a business or an individual, you must provide the court with a comprehensive overview of your debts, assets, and income.
The process starts by submitting a petition along with several supporting forms. These include:
- Voluntary Petition for Chapter 11
- Schedule of Assets and Liabilities
- Statement of Financial Affairs
- Schedule of Current Income and Expenditures
- List of Executory Contracts and Unexpired Leases
- List of Creditors with amounts owed
- Disclosure Statement (explaining your reorganization plan)
- The actual Reorganization Plan
Chapter 13 Bankruptcy
Chapter 13 bankruptcy—often referred to as a wage earner’s plan—lets you reorganize your debt without giving up everything you own. In VT, once your petition is filed, the court appoints a trustee who reviews your income, expenses, assets, and overall ability to repay what you owe.
Unlike Chapter 7, which focuses on liquidation, Chapter 13 centers on a structured repayment plan that typically lasts three to five years. How flexible that plan is will depend on the stability of your income and the property you’re trying to keep. In some cases, you may even qualify to have a portion of your debt discharged once the plan is complete.
The Bankruptcy Process in Vermont
Filing for bankruptcy is rarely anyone’s first choice, but if your debt load is too large to manage within the next five years, it might be time to take a closer look. Bankruptcy can give you room to breathe and help you regain control of your financial future when other solutions just aren’t working.
To get started in Vermont, you’ll need to pull together a full snapshot of your finances. That includes your income, monthly bills, outstanding debts, and a list of everything you own. The court relies on this information to evaluate your case and determine your eligibility. Missing documents or incomplete details can slow down the process or cause your petition to be denied altogether.
Whether you’re filing under Chapter 7 or Chapter 13, understanding what property you can protect is crucial. Here’s a breakdown of Vermont’s key bankruptcy exemptions:
- Homestead Exemption: Protects up to $125,000 in equity in your primary residence, including houses, condos, and mobile homes.
- Motor Vehicle Exemption: You can exempt up to $2,500 in equity for one vehicle.
- Personal Property Exemptions:
- Up to $2,500 for household goods, furnishings, appliances, books, animals, crops, and musical instruments.
- Up to $500 for jewelry (excluding wedding rings, which are fully exempt).
- Up to $700 in bank deposits.
- Tools of the trade necessary for your profession: up to $5,000.
- Wildcard Exemption: A general exemption of up to $400 that can be applied to any property you choose.
Work With an Experienced Vermont Lawyer
If you’re a Vermont resident struggling with debt, bankruptcy may be the turning point you need to reclaim your financial future. Whether you’re considering Chapter 7, 11, or 13, the process is designed to give you relief, structure, and legal protection.
We can connect you with a Vermont-based bankruptcy attorney who understands the local laws and can guide you through every step.
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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