While their unemployment rate is relatively low, Idaho reports a high number of bankruptcies, with the total nearly doubling between 2007 and 2009. At that rate, it is important that others considering bankruptcy understand the benefits and the requirements. The good news is, once a bankruptcy process is successfully completed, the filer may begin to rebuild their financial status and restore their credit rating.
Finding a Bankruptcy Attorney
It is important to make wise choices when going through the bankruptcy process. There are benefits that many filers miss if they do not have a bankruptcy attorney guiding them. It is important, however, to choose an experienced and successful advisor, and debtors can do so by taking the time to investigate the background, success rate, and client ratings of a potential attorney.
Bankruptcy Options
The two primary options appropriate for individual or family filers are Chapter 7 and Chapter 13 bankruptcy. In Idaho, the vast majority of debtors choose Chapter 7, as much as 89% in 2009. The benefits of these options are quite different:
- Chapter 7 allows a filer to discharge, or write off, most of their debt; however, they may be required to liquidate some of their unprotected property to pay down some of that debt first.
- Chapter 13 allows a filer to protect their property, but they do not write off, or discharge, any debt. Instead, with the help of the bankruptcy trustee, they form a repayment plan that fits their budget, allowing them to satisfy their creditors within three to five years.
Idaho Exemptions
Chapter 7 may require some debtors to liquidate some property; however, it also allows them to claim either federal or state exemptions that may apply. In Idaho, state law requires filers apply only state exemptions, which include:
|
Homestead |
Up to $100,000 |
|
Personal Property |
Health aids; burial plots; recoveries for personal injury and wrongful death required for support; college savings accounts; motor vehicle up to $5,000; clothing; furnishings; heirlooms; and miscellaneous items up to $500/ea and $5,000 total; additional property up to $800 |
|
Wages |
A minimum of 75% of wages earned but unpaid or 30 times the hourly federal minimum wage, whichever is greater |
|
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; retirement plans; government and private pensions; police; ERISA-qualified benefits; public employees; firefighters |
|
Public Benefits |
Unemployment; Social Security; veterans’ benefits; federal, state, and local public assistance |
|
Tools of the Trade |
Up to $1,500 in tools, books, and implements of trade; arms, uniforms, and necessary accoutrements for peace officers, National Guard members, or military |
|
Insurance |
Medical or hospital care benefits; medical savings accounts; life insurance proceeds; death and disability benefits; group life insurance benefits |
Filing the Petition
The bankruptcy petition should only be filed after the debtor and their attorney have considered and chosen their options carefully and planned well, and after the debtor has completed their required credit counselling. Once filed, the petition is in the hands of the bankruptcy trustee, who guides the filer through the process. The 341 hearing allows the trustee and creditors to clarify the bankruptcy plan and have their questions answered before the debts of a Chapter 7 filer are discharged or the repayment plan of a Chapter 13 filer is approved.
