More than 60% of Americans live paycheck to paycheck, and their average savings have dropped. An estimated 33.5 million people spent more than they earned in the past six months. These statistics tell the story of how close many Americans are to financial distress. An unexpected illness or household expense could be enough to send them into a tailspin.
When the bills are piling up, and creditors are calling, filing for bankruptcy might be the pressure valve release needed to regain solid financial ground.
Chapter 7 remains the most popular option in the Show-Me State. Some Missourians disregard this option for the false belief they will be forced to sell their belongings to assuage creditors. The truth is that Missouri law protects certain assets in Chapter 7 bankruptcy from creditors.
Protected Assets in Chapter 7 Bankruptcy
People need certain essentials to be productive members of society. That principle is the basis for Missouri’s statutes regarding bankruptcy exemptions.
Exemptions range from the equity in your home to health savings accounts:
- Up to $15,000 of equity in the home – up to $5,000 in a mobile home – in which you currently or will live (if you are married but they do not file, you might be able to protect the property in its entirety)
- Up to $3,000 in equity in your car
- Up to $3,000 in furniture, appliances, clothing, and other household items
- A wedding ring up to $1,500 in value and other jewelry up to $500
- Up to $1,500 in firearms and accessories
- Up to $3,000 in tools, implements, and books for your business or trade
- Payments under a pension plan or stock bonus plan
- Public benefits like veterans, workers’ compensation, Social Security, and public assistance
- Health savings plans
- Doctor-prescribed health aids
- Tax-exempt retirement accounts
Missouri also has a wild card exemption. This exemption allows you to protect up to $600 per person on any single asset you own. Head of households can exempt an additional $1,250 plus $350 for each child.
At Licata Bankruptcy Firm PC, we can explain these and other exemptions that might apply to your case.
Bankruptcy Trustee Approves Exemptions
A form called Schedule C is filed as part of your bankruptcy case. This form outlines the property you want to protect according to Missouri law. The bankruptcy trustee overseeing the case can either approve the exemptions, request more information, or file an objection with the court. You can avoid objections to your exemptions by working with one of our experienced bankruptcy attorneys.
Residency Requirements to File Bankruptcy in Missouri
While federal laws dictate some aspects of bankruptcy, states have unique laws related to bankruptcy. To keep people from forum shopping their bankruptcy, each state adheres to a residency requirement.
To use Missouri’s exemptions, you must have lived in the state for at least 730 days before filing. You can file for bankruptcy where you have lived the greater portion of the previous 180 days, i.e. 91 days or more.
Property Your Property During Bankruptcy
In addition to Chapter 7, many Missourians used Chapter 13 to file for consumer/personal bankruptcy. Which chapter best suits your situation depends on the amount and kind of debt you have, your income, and the amount of property you want to safeguard from creditors.
Schedule a consultation with us to learn more about your options. We offer every client personalized attention and legal support. Contact us online or call (417) 213-5006.