How to File for Bankruptcy in Missouri

Missouri is one of the few states to show a decrease in bankruptcies over the last few years.  That does not mean, however, that many thousands of residents are not still facing that difficult question, especially with their unemployment rate 16^th in the nation.  For those struggling to discern the right decision, their best choice may be to consult an experienced bankruptcy attorney to learn the benefits, consequences, and alternatives.

Finding a Bankruptcy Attorney

There are several sources of information about bankruptcy attorneys that can help potential filers select one that works well with them:

• State and local bar association recommendations
• Word of mouth
• Trusted online legal sites
• Research into the background and track record of potential candidates
• Personal interviews with the most likely candidates and a review of their written quote for services and fees

Bankruptcy Options

One of the first questions to answer is which bankruptcy process is appropriate for an individual filer.  Of the six options available, two are generally chosen by individuals:

• For those with few or no assets, Chapter 7 may be the best choice.  The bankruptcy trustee may liquidate some non-exempt property to pay creditors; however, for many Chapter 7 filers, there is no property that qualifies.  At the end of this process, most unsecured debts are discharged, or erased, except such items as tax debts, some student loans, alimony, and child support.
• Chapter 13 is the alternative for those who do not qualify for Chapter 7 and for those who have sufficient monthly disposable income to continue to pay debts, although at a reduced rate.  In addition, it is often chosen by those who have significant non-exempt property that they want to protect from liquidation.  The debtor and their attorney devise a repayment plan that is fair to creditors and reflects the best efforts of debtors to pay.  At the end of a three- to five-year plan, most unpaid unsecured debts are generally discharged.

Missouri Exemptions

The majority of filers (73%) choose Chapter 7 in Missouri, and therefore, they should understand the exemptions that they may claim to protect certain types of property from liquidation.  There are both federal and state statues providing exemptions, but Missouri law allows only state exemptions, including:

Filing the Petition

A debtor and their lawyer should devise their plan carefully and the debtor attends credit counseling before filing their bankruptcy petition with the court, followed by these steps:

• A bankruptcy trustee is appointed to oversee and manage the petition
• The trustee examines the petition to be sure it is qualified.  If a Chapter 7 petition is not qualified, it may be converted to a Chapter 13.
• The trustee holds a 341 meeting, so named because of its section in the bankruptcy code, which is required for the debtor.  Their attorney should accompany them, as they will be facing questions from the trustee and possibly creditors, as well, regarding their assets and financial circumstances.  For Chapter 13 filers, the trustee reviews their repayment plan to ensure that it is viable.
• If everything is in order, the petition is granted, and the debtor attends debtor education classes before their debts are dismissed.
• Upon successful completion of those classes, the Chapter 7 filer has most of their unsecured debt discharged and the Chapter 13 filer begins their repayment plan.