Frequently Asked Questions about Bankruptcy
Bankruptcy is a legal procedure for dealing with debt problems of individuals and businesses. Filing bankruptcy correctly, to achieve the best possible outcome, can be overwhelming. Trying to file without legal representation, or hiring an inexperienced attorney to represent you, can leave you in an even worse situation than you started from.
At the Bankruptcy Clinic in Springfield, Missouri, we have over 20 years of combined experience filing bankruptcies for individuals and small businesses, under Chapter 7, Chapter 11, and Chapter 13 of the Code. Bankruptcy is all we do!
We can help you work to get relief from calls from collection agencies, from garnished wages, and more. Call (417) 4NO-DEBT or contact our Missouri bankruptcy attorneys to schedule a free, initial consultation.
For your education, below are some of the more common questions that we get asked about the bankruptcy process.
What Can I Keep?
Are you interested in exploring your bankruptcy options but worried about losing your personal possessions — such as your home or your car — in the process? At the Bankruptcy Clinic, we can help you understand Missouri’s laws on what you can and cannot keep during bankruptcy proceedings.
When you file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy, certain types of property and assets will be partially or fully exempt from bankruptcy proceedings. In a Chapter 7 bankruptcy, a trustee will assume control of any property that is not exempt. That property is sold, and the proceeds are used to pay the creditors. Exemptions can include the following:
- Homestead exemption: $15,000
- Wedding ring: $1,500
- Mobile home exemption: $5,000
- Motor vehicle: $3,000 per debtor
- Household goods and furnishings: $3000 per debtor
- Unemployment compensation benefits
- Tools of the trade: $3,000 per debtor
- Workers’ Compensation
- Qualified retirement plans
- Social Security benefits
The above is not an all-inclusive list, and there are many more exempt items. The Missouri exemptions apply if you have lived in Missouri for the past 911 days. If you have lived somewhere else during this time, you may qualify for some other exemptions. Our experienced bankruptcy attorneys will help you figure out which state or federal exemptions apply. Call the Bankruptcy Clinic at (417) 4NO-DEBT to arrange an initial consultation.
How Do I Determine What Exemptions To Claim?
When you file for bankruptcy — either Chapter 7 bankruptcy, Chapter 11 bankruptcy, or Chapter 13 bankruptcy — certain types of property may be partially or completely exempt from bankruptcy proceedings. That means you can file for bankruptcy and you will still be allowed to keep some of your property including, but not limited to, your home, your car, and your retirement account.
Both the Bankruptcy Code and the law of individual states contain provisions establishing a debtor’s right to claim certain property as exempt. The state law exemption rules are different than those provided by the Bankruptcy Code, and the exemption provisions vary from state to state. Often, selecting an exemption system can be a confusing and overwhelming matter.
At the Bankruptcy Clinic in Springfield, we can help you evaluate your situation and discuss the exemptions and the exemption system, whether state or federal, to best meet your needs. Also, if you have recently moved to Missouri, we can help you determine the appropriate state exemptions to use for your bankruptcy. At the Bankruptcy Clinic, our bankruptcy lawyers can help you sort out the exemptions you are entitled to and protect as much of your property as possible.
If you have moved to Missouri within the last 730 days, the state exemptions you use when you file bankruptcy will be the exemptions from the state of the last place of residence. In many cases, it may be advantageous to you because of more generous exemptions in other states. This also means that if you move away from Missouri, any bankruptcy you file within that time limit will be bound by Missouri exemption laws.
"Liquidation" Bankruptcy vs. "Wage Earners" Bankruptcy?
Chapter 7 is known as a “liquidation” bankruptcy because unprotected assets may be sold by the court to pay your debts. Chapter 13 bankruptcy is a “wage earners” bankruptcy, because any individual with regular income may file for Chapter 13. That means anybody, regardless of the amount of debt, regardless of income, can qualify for debt relief under Chapter 13.
Regular income can include social security, self-employment, private disability or retirement, and wages from employment, to name just a few. You will not be able to file a Chapter 13 if you are unemployed, or on temporary workers’ compensation benefits. Most every other type of income or benefits will work.
Both Chapter 7 and Chapter 13 will allow you to discharge certain debts, and exempt certain property so you can keep it following your bankruptcy. Chapter 13 also has advantages to both that Chapter 7 does not. For additional details, see our Bankruptcy Practices page. To discuss which one is right for you, call the Bankruptcy Clinic at (417) 4NO-DEBT.
Can My Filing Fees Be Paid Through My Bankruptcy Plan?
With Chapter 13 bankruptcy, the answer is a qualified “yes”. We will charge you a down payment to file your case, and the court will have required pre-filing costs. However, when your case is filed, the balance of any remaining attorney fees can be paid from your monthly plan payments, interest free. Additionally, as work is done on your case during the duration of your bankruptcy, any fees for new work that you need, such as Court permission to refinance a home or buy a newer car, can be financed through your plan payments. This allows you to receive the legal services you need in your case without coming up with more money, and without fear of losing your case and not getting your debts discharged.
In order to pay the balance of the attorney fees after the case is filed, you must be employed at the same employer for at least two years, and be willing to have your Chapter 13 plan payment deducted from your paycheck. This ensures success of your case. The decision to defer all or only a portion of these attorney fees is completely within the discretion of the attorney. A written fee agreement specifically outlining the amount required prior to filing your case and the total amount to be charged will be presented at your consultation.
To discuss a potential Chapter 13, Chapter 7, or Chapter 11 bankruptcy case, please call us at (417) 4NO-DEBT, or contact the Bankruptcy Clinic using our online form.
Who Determines How Much I Will Pay?
We will work together to show the Court what you really can afford and still have enough money to live on. In a Chapter 13 case, you will have to make monthly payments toward what you can afford to pay to your creditors, not what you owe. Debt settlement often companies compute your payment to them based on what you owe, whereas we compute your payment based on what you can afford.
Many inexperienced or less-experienced attorneys will have you paying too much for your monthly Chapter 13 plan payment. They simply do not know all of the factors that go into developing a successful budget. The national completion rate for Chapter 13 cases is 33-50%, yet our success rate is better than 85%. Some cases do not go through for reasons beyond everyone’s control, but we have helped thousands of people develop realistic budgets they can live on, and these budgets are accepted and approved by the Court.
At the Bankruptcy Clinic, our team of experienced bankruptcy attorneys will guide you through the process of filing for Chapter 13, Chapter 7, or Chapter 11 bankruptcy, and work with you to ensure that your payment plan stays on track and your debts are successfully discharged. We have helped our clients erase millions in debt; call us today at (417) 4NO-DEBT to see how we can help you.
