Sometimes, the financial turbulence in our lives gets so rough that we have to hit the eject button and parachute to safety. That eject button is bankruptcy. Bankruptcy can be the fresh start you need if you are in debt and don’t see a way out.
But there’s a problem. Even if you do your research and decide that bankruptcy is right for you, you’re left with a two-word solution — “File bankruptcy” — and not much information. How, exactly, do you file bankruptcy in Missouri? Unfortunately, it’s not a simple process. It’s the kind of complex legal and financial decision that requires a step-by-step guide.
This is that guide. In this post, we tell you everything you need to know about how to file bankruptcy in Missouri. For more information, keep reading or contact the experienced Missouri bankruptcy attorneys at A Bankruptcy Law Firm, LLC.
Chapter 7 vs. Chapter 13 Bankruptcy in Missouri
Before you can learn how to file bankruptcy in Missouri, you have to decide which type of bankruptcy is right for your situation. There are several kinds of bankruptcy in Missouri, but the most common types for individuals are Chapter 7 and Chapter 13.
Chapter 7 bankruptcy in Missouri is the go-to option for many people who need to get their bankruptcy done quickly. The entire process usually takes a handful of months. The basic idea is that your non-essential assets are liquidated to pay your creditors, and whatever remains of your qualifying debts is discharged. This arrangement typically works well for people who don’t own a lot of property or valuable assets.
Chapter 13 bankruptcy, on the other hand, lets you keep your property. In exchange, you develop and stick to a repayment plan that lasts for three to five years. At the end of the payment plan, your debts are discharged, and you have your fresh start.
Which of these options is right for you will depend heavily on your circumstances, such as your income, the amount of debt you have, and your current assets. A bankruptcy lawyer in Missouri can help you decide which option is best for you.
Bankruptcy Exemptions in MO
No matter which type of bankruptcy you choose, you will have to learn about Missouri’s bankruptcy exemptions as you file bankruptcy. An exemption allows you to protect a particular asset, such as your home or your vehicle, from creditors. In Chapter 7, exempt property won’t be liquidated to repay your creditors. In Chapter 13, you won’t have to consider the exempt property in your repayment plan.
The Show-Me State has opted out of the federal bankruptcy exemptions list and has created its own. Below, we take a look at some of the most important Missouri bankruptcy exemptions.
Many people who are considering filing bankruptcy in Missouri hesitate because they are afraid of losing their home. But there’s good news: The homestead exemption allows you to exempt up to $15,000 in equity in your home or $5,000 in equity on your mobile home.
Similarly, you can exempt some of the equity you have in your vehicle under Missouri’s bankruptcy laws. You can exempt up to $3,000 in this case.
This exemption is called a “wildcard” because you can use it for pretty much anything. Whether it’s a collection of rare coins or a family heirloom, you can exempt up to $600 in value on it. Additionally, you can exempt $350 for each child you have, and if you are the head of your household, you can exempt another $1,250.
The Means Test for Missouri Bankruptcies
If you are planning to file Chapter 7 bankruptcy in Missouri, you’re going to have to pass the means test. This test is meant to make sure you don’t make too much money to reasonably qualify to file Chapter 7.
Basically, this test looks at your annual income (your gross income from the six months leading up to your bankruptcy times two) and compares it to the median income to see if you qualify. For example, if you are part of a household of four people and are filing bankruptcy after May 1, 2021, your annual income can’t exceed $90,521. These numbers change as the median income changes, of course, so talk to your Missouri bankruptcy lawyer about the current standards for the means test.
If your income exceeds the median income for households of your size, you haven’t passed the means test and are not qualified to file Chapter 7 bankruptcy in Missouri. However, there is a catch that could still allow you to file Chapter 7. If you subtract your monthly expenses from your gross monthly income and there is not enough left over to pay for a Chapter 13 repayment plan, you could still qualify to file Chapter 7 bankruptcy.
Missouri Bankruptcy Requirements by Court District
One of the most essential things to know about filing bankruptcy in Missouri is which court you should file in. There are two bankruptcy court districts in our state:
Depending on where in Missouri you live, you will need to file with one of these court districts.
Eastern District Bankruptcies
The central bankruptcy court in the Eastern District is the Thomas F. Eagleton U.S. Courthouse in St. Louis. You may be able to file at other courts in Hannibal and Cape Girardeau, but the St. Louis court has permanent bankruptcy staff.
Western District Bankruptcies
The central bankruptcy court in the Western District is the United States Courthouse in Kansas City. There are other courts in this district, but the Kansas City court is the only one where you can file bankruptcy.
Steps to Filing Bankruptcy in Missouri
After you’ve decided which type of bankruptcy to file, chosen which assets you would like to exempt, and learned which court you need to file in, you’re ready to actually begin the Missouri bankruptcy filing process. We’ve broken this process down into nine basic steps. Keep in mind that there are some important differences between the Chapter 7 and Chapter 13 bankruptcy processes in Missouri; we note those differences in the steps below.
1. Put Your Bankruptcy Documents Together
You’re going to have a much easier time filing bankruptcy if you have all of the information and forms you will need right in front of you as you file. That way, you avoid chasing down information and seeking out forms when you’re just ready to get it all over with.
Here are some of the key pieces of information you will need to file bankruptcy in Missouri:
- Your Social Security number
- Your home address
- Your wage and income information
- The name and address of your employer(s)
- A list of all of your creditors
- A list of all of your valuable property, including your homes, land, vehicles, and valuables
- A list of each financial account in your name, including bank accounts, investment accounts, and similar accounts
- A detailed list of your recurring monthly expenses, including rent, mortgage, childcare, and groceries
- Your state and federal tax returns for the previous two years
2. Get Credit Counseling
Before you can actually file bankruptcy in Missouri, you have to take an approved credit counseling course. Most of these courses are offered online and are relatively simple to get through. Once you’ve completed the course, you will get a certificate, which allows you to file bankruptcy some time in the next 180 days.
To see a list of companies that are approved to give the credit counseling course in Missouri, click here.
3. Fill Out Your Forms
In addition to all of your financial information and your certificate of completion from your credit counseling course, there’s even more paperwork: the official bankruptcy forms. The forms differ by individual Missouri court and type of bankruptcy, but much of the information in them will come from your financial documents, such as your list of assets and your current income.
Keep in mind that, for Chapter 13 bankruptcy, you will have to develop a repayment plan as part of this process. And that plan will have to be approved by your bankruptcy trustee. A lawyer can help you draft your repayment plan.
Mistakes on these forms could delay or harm your bankruptcy filing, so it’s important to be thorough here. If you work with a bankruptcy lawyer, they can fill out the forms on your behalf to make sure every detail is exactly right.
4. Pay Your Filing Fee
If you make over a certain amount of money, filing bankruptcy in Missouri won’t be completely free. You’ll have to pay a filing fee of $338 if you make 1.5 times the federal poverty guidelines or more. However, if you can’t pay it all at once, you can request an installment agreement or even a fee waiver.
5. File Your Bankruptcy Forms in Court
Once you have all of your information and forms together, it’s time to print them out and bring them to the courthouse to be filed (or have your bankruptcy lawyer do it). Don’t staple or otherwise alter the printed forms, and be sure they’re printed on clean white paper in an easy-to-read format.
6. Mail Materials to Your Bankruptcy Trustee
After you have filed your bankruptcy forms, the automatic stay takes effect, which means your creditors can’t continue to pursue payments from you. This is also the step where you are assigned a bankruptcy trustee who will oversee many aspects of your case.
Soon after you file, you need to mail your most recent tax return to your trustee. You may also hear from them if they need any other documents or information. Because you probably just want to focus on your family and your job, this can be frustrating, but it’s important — and legally required — that you cooperate with your trustee throughout this process.
7. Take Your Next Bankruptcy Course
Within 90 days of filing bankruptcy in Missouri, you will need to take a second financial course and file a certificate of completion with the bankruptcy court. This second course focuses more on managing your finances in the future, after your bankruptcy is over. Be sure the course you take, which in most cases will be online, is coming from an approved debtor education course provider.
8. Go to Your 341 Meeting
If you filed Chapter 7 bankruptcy, you will have a 341 meeting — also called a meeting of creditors — around a month after filing. Here, your creditors can come and object to your bankruptcy filing and ask questions about your case. You are obligated to attend and answer all questions honestly, but in most cases, creditors do not attend 341 meetings. More than likely, the meeting will just be you, your attorney, and your bankruptcy trustee having a quick discussion of your case.
9. Get Your Bankruptcy Discharge
In Chapter 7 bankruptcy, your debts will usually be discharged three to four months after you file. In Chapter 13 bankruptcy, your debts will be discharged after you have successfully completed your three- to five-year repayment plan. After that, you’re all done.
A Missouri Bankruptcy Lawyer Can Help
We hope this deep dive into how to file bankruptcy in Missouri has been helpful and relieved some of your fears and anxieties surrounding the bankruptcy process. In our opinion, the steps described above are missing one essential first step that can relieve your stress even more: contacting a Missouri bankruptcy lawyer.
With a trusted bankruptcy attorney on your side, you have an experienced and knowledgeable guide to help you through each step of the bankruptcy process. That way, you can focus on your life and get to your fresh financial start faster and with fewer wrinkles.
At A Bankruptcy Law Firm, LLC, our goal is to help Missourians file bankruptcy quickly and effectively so they can get back to their lives and families. We’ve done so for countless Missouri families, and we’re ready to help you, too. When you’re ready to get started, reach out to us by calling (800) 7-BENSON or contacting us online.