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How to File for Bankruptcy in Rhode Island
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The economy is making it hard for many people to continue financially without some sort of relief and bankruptcy is becoming more of a consideration. This is certainly the case in Rhode Island, where 5.22 filings for bankruptcy take place for every one thousand people represented by the state. Considering all the people who are looking at bankruptcy as a viable option, it is important to know if you fit under the new “means” test for determining eligibility and if bankruptcy is the best decision for you.
Finding a Bankruptcy Attorney
Finding a knowledgeable attorney who has experience handling cases like yours is crucial. The attorney can offer valuable financial and legal advice, as well as help you in the filing process and represent you in front of the bankruptcy trustee. Since the attorney will be standing up on your behalf, make sure he/she has a good reputation and will treat you with respect.
Bankruptcy Options
Because everyone’s financial situation is unique, there are different bankruptcy code options available:
- For those who do not have much in assets or none at all, Chapter 7 is probably the best choice. It gives you freedom from the burden of debt you are struggling with now and a new financial start.
- For those who do have valuable assets that you would like to keep, Chapter 13 gives you the ability to establish a payment system so that your existing debts will be paid off within the next three to five years.
Rhode Island Exemptions
Eighty-five percent of the bankruptcy filings in Rhode Island are Chapter 7 filings and so knowing the exemptions available is very important. In Rhode Island, you are allowed to choose between the federal and state exemptions lists, but you may only use one list when you decide to file. The Rhode Island exemptions list is extremely generous:
| Homestead | $300,000 occupied or intended to be occupied as primary residence. |
| Personal Property | Consumer cooperative association holdings up to $50; all motor vehicles up to $12,000 total; clothing needed; furniture, beds and bedding, household goods and supplies up to $9,600 total; jewelry up to $2,000 total; books up to $300 total; burial plot; debt owed to you which is secured by a promissory note or bill of exchange; and prepaid tuition accounts. |
| Wages | Earned but unpaid wages up to $50; wages of spouse; earned but unpaid wages of a seaman, or if you have received welfare during the year prior to filing for bankruptcy; wages paid to the poor by a charitable organization; earnings of a minor child; earned but unpaid wages of a military member on active duty. |
| Pensions | Tax exempt retirement accounts; Traditional and Roth IRAa up the $1,095,000 per person; ERISA-qualified benefits; IRAs and Roth IRAs; police officers and firefighters; private employees; state and municipal employees. |
| Public Benefits | Crime victim's compensation; workers' compensation; state disability benefits; unemployment compensation; veterans' disability or survivor benefits; family assistance benefits; general assistance; aid to blind, aged, and disabled. |
| Tools of the Trade | Working tools up to $1,500; library of a professional in practice. |
| Insurance | Life insurance proceeds if policy prohibits use to pay creditors; accident or illness proceeds, benefits, dividends, interest, loan, cash, or surrender value; fraternal benefit society benefits; temporary disability insurance. |
| Miscellaneous | Business partnership property. |
| $5,000 |
Filing the Petition
Now that you have decided which bankruptcy code fits your situation best, what exemptions list works for you and have completed any credit counselling necessary, you can begin to file your petition for bankruptcy with the court. A meeting will likely be arranged by the bankruptcy trustee, so that your creditors can be informed and ask any questions they may have about payment plans and other applicable concerns. If your petition for bankruptcy is then accepted, you will be able to begin life without debt (Chapter 7) or start working towards being free from debt within just a few years (Chapter 13).
This article is provided for informational purposes only. If you need legal advice or representation,
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