Missouri Chapter 7 Bankruptcy
Missouri Chapter 7 Bankruptcy
Chapter 7 bankruptcy in Missouri offers individuals and families a “fresh start.” It is designed to discharge unsecured debts such as credit cards, medical bills, and signature loan. After completing your case and receiving a discharge order from the court, you will no longer owe those debts. Chapter 7 bankruptcy does not, however, discharge child support, student loans, or certain taxes.
In a Chapter 7 case, you must disclose all of your assets, debts, income, and expenses. Debts can be unsecured or secured. Secured debts are debts for which you have pledged collateral, such as a house or a vehicle. You will tell the court and your creditors what you want to do with your secured debts, such as mortgage loans or auto loans. You can surrender property in lieu of paying the secured debt or you may choose to keep the property by redeeming the property or reaffirming the secured debt. Generally, you must be current on your secured debt to be able to keep the pledged property. At a free chapter 7 bankruptcy consultation we will discuss which of these options is best for you.
Chapter 7 Liquidation
Chapter 7 bankruptcy is a liquidation form of bankruptcy. What that means is that a bankruptcy trustee will look at your assets to see if there are is anything that could be sold to pay off some or all of your unsecured debts. Many Chapter 7 Bankruptcies do not have assets that are liquidated. That is because of a series of State and Federal laws called exemptions. Exemptions allow you to protect some equity in the property you will need for your “fresh start,” including your home, vehicle, retirement accounts, household goods and furnishings, jewelry, and clothing. At the free bankruptcy consultation we will determine which of your assets are protected by exemptions.
Chapter 7 Bankruptcy Guidelines
Chapter 7 bankruptcy also has two income qualifying guidelines.
The first is an analytical tool known as the “Means Test.” The Means Test will first take a look at the annual household gross income (received by all members of your household), calculated using the average monthly income(s) received during the six-month period before you file for bankruptcy. This includes income from all sources, regardless of whether that income is taxable or not, but excludes all Social Security income. That annual household gross income will then be compared to the Median Family Income for a household of your size in your state. If your income is “below median” then you “pass” the initial income guideline and a Chapter 7 is a viable option for you. If your income is “above median,” then we must fill out the remainder of the “Means Test” form by plugging in some IRS standard deductions and some of your actual expenses to determine whether you may still qualify to file a Chapter 7.
The second guideline is called the “Budget Test.” This analysis considers whether there is any reasonable likelihood in the foreseeable future that you could afford to pay some or all of the debts you are attempting to discharge. In this test, you will add up all of your monthly income and all of your monthly expenses. We will then create a budget (income minus expenses) to determine how much income you have left over each month, which will show whether you can afford to pay your creditors. If your budget shows you do not have much extra income at the end of the month, after paying all of your necessary expenses, then you “pass” that guideline and Chapter 7 is a viable option for you. At a free bankruptcy consultation we can discuss any budget concerns you may have in qualifying for Chapter 7 bankruptcy.
Three things you must do when filing for bankruptcy:
- You must be truthful with your attorney at all times and be truthful in listing all of your assets, debts, income, and expenses.
- You must either have all required tax returns filed or be willing to file them when you file your bankruptcy.
- You must complete pre-filing credit counseling and post–filing debtor education courses.
Three things that you must avoid doing prior to filing for bankruptcy:
- Avoid paying back any family members or insiders during the year prior to filing for bankruptcy.
- Avoid transferring any of your assets to anyone in the two years prior to filing when the asset is being transferred for less than value.
- Avoid obtaining any new debt in the 90 days prior to the filing of any bankruptcy or obtaining any debt in contemplation of discharging that debt in bankruptcy.
St. Robert, Missouri 65584
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Carrie B. Williamson – Attorney At Law – Missouri Chapter 7 Bankruptcy – Missouri Chapter 13 Bankruptcy
Carrie Williamson serves clients across central Missouri, working primarily in the areas of consumer bankruptcy, probate, and real estate.
Carrie is board member of the Waynesville-St. Robert Chamber of Commerce. She previously served on the Pulaski County Extension Council and on the board of directors of the Pulaski County Growth Alliance. Carrie volunteered as a Pulaski County Master Gardener for many years. In 2015, Carrie and her husband acquired “Wild Side Farm,” a 26 acre property in Richland, Missouri, which they are developing as an ecological agriculture venture.
- B.S., Animal Science, University of Missouri-Columbia, 1993
- B.S., Equestrian Science, Stephens College, 1993
- M.B.A., Webster University, 2003
- J.D., Magna Cum Laude, University of Missouri-Columbia School of Law, 2010
- The Missouri Bar (Since 2010)
- Pulaski County Bar Association
- American Bankruptcy Institute
Areas of Practice
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- U.S. District Court, Eastern District of Missouri
- U.S. District Court, Western District of Missouri