The goal of filing bankruptcy in Idaho is two-fold. First, it gives honest debtors a chance to be relieved of crippling debt, and second it repays creditors to the extent that the debtor’s property value or earnings permit. 8,235 bankruptcies were filed in Idaho in 2010, ranking Idaho 17th in the country for the number of bankruptcy filings per capita. 88% of Idaho’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.
Filing Bankruptcy in Idaho
Bankruptcy in Idaho is governed by federal law and all bankruptcy cases are filed in the US Bankruptcy Courts in Boise, Coeur d’Alene, Moscow and Pocatello. Although the federal courts have jurisdiction over bankruptcy proceedings, Idaho law prohibits petitioners from using exemptions found in the U.S. bankruptcy code, requiring instead that debtors choose from the state exemptions. With the guidance of a bankruptcy attorney Idaho debtors can gain a full understanding of what personal property they are permitted to hold in bankruptcy, and what must be sold.
Chapter 7 Bankruptcy, Idaho
Chapter 7 bankruptcies in Idaho are the most common bankruptcy filing. Chapter 7 is preferable for petitioners who do not have a significant amount of assets, such as investments and substantial equity in a home. This is because a Bankruptcy Trustee may liquidate personal property that is not protected by Idaho’s bankruptcy exemptions. Liquidation occurs when the Trustee converts personal assets to cash for distribution to creditors. Idaho’s Chapter 7 bankruptcy law allows petitioners to keep some essential property; the exempt assets are strictly off-limits to creditors looking for repayment.
The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.
Idaho Bankruptcy Exemptions
Idaho bankruptcy law designates property exemptions that allow petitioners to retain certain personal property and assets so they may move forward from bankruptcy as productive members of society. That is, the creditors cannot force debtors to sell the shirt off their backs. Bankruptcy in Idaho permits petitioners to choose from the state exemption list.
Property exemption amounts are subject to change, and an Idaho bankruptcy attorney will have the most reliable and up-to-date information on hand. Idaho bankruptcy exemptions include:
Idaho Homestead Exemption
- $100,000 total: Real property or mobile home to; sale proceeds exempt for 6 months (Husband and wife may not double)
- Must record homestead exemption for property that is not yet occupied
Idaho Personal Property Exemption
- Provisions of food or water together with storage containers and shelving, sufficient for 12 months for use of the debtor or dependents
- $1,000 total: Jewelry
- $7,000 total: Motor vehicle
- $7,500 total: Appliances, furnishings, books, clothing, pets, musical instruments, family portraits, sentimental heirlooms to $750 per item
- $1,000 total: Crops cultivated on maximum of 50 acres; water rights to 160 inches of water
- $750 total: One firearm
- Building materials
- Health aids
- College savings program account
- Personal injury recoveries
- Proceeds for damaged exempt property for 3 months after proceeds received
- Burial plot
- Wrongful death recoveries
Idaho Tools of the Trade Exemption
- $2,500 total: Implements, books andtools of trade
- Arms, uniforms and accoutrements that peace officer, National Guard, or military personnel is required to keep
Idaho Wage Garnishment Exemption
- 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage, whichever is greater, but not more than $1,500 per calendar year; pension payments (Low-income debtors may be authorized for more)
Idaho Public Benefits Exemption
- Social Security, General assistance, Aid to blind, aged, disabled
- Federal, state and local public assistance
- Workers’ and Unemployment compensation
- Veterans’ benefits
Idaho Insurance Exemption
- $1,250 per month: Annuity contract proceeds
- Medical, surgical, hospital care benefits and amount in medical savings account
- Death or disability benefits
- Fraternal benefit society benefits
- Homeowners’ insurance proceeds to amount of homestead exemption
- Group life insurance benefits
- Life insurance proceeds or avails for beneficiary other than the insured; life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors
- $5,000: Unmatured life insurance contract interest or dividends owned by debtor or person debtor depends on
- Unmatured life insurance contract, other than credit life insurance, owned by debtor
Idaho Pensions and Retirement Savings Exemption
- Firefighters, Police officers and Public employees
- Government and private pensions, retirement plans, IRAs, Keoghs
- ERISA-qualified benefits
Idaho Miscellaneous Exemption
- Alimony and/or child support
- Liquor licenses
Idaho Wild Card Exemption
- $800: Any tangible personal property
Chapter 13 Bankruptcy, Idaho
In 2010, 12% of debtors filed for protection under Chapter 13 bankruptcy laws in Idaho. When a petitioner files Chapter 13 bankruptcy in Idaho, a court-appointed Trustee redistributes the petitioner’s debts and develops a 3-5 year repayment plan, by which the debtor’s future earnings will be used to repay creditors. Chapter 13 petitioners in Idaho keep most – or all – of their property.
How to File Bankruptcy in Idaho
Eligibility for property exemptions ought to be a significant consideration in deciding if bankruptcy is a practical answer to a debtor’s financial problems. The objective is to find a solution that will preserve major assets and qualify debts for discharge. Since every case is unique, an Idaho bankruptcy attorney can help debtors understand the complexity of their financial situations and advise whether Chapter 7 or Chapter 13 bankruptcy are among the best options in their circumstances.
Bankruptcy Attorney: Idaho
It is the debtor’s obligation to know their privileges and duties as bankruptcy petitioners. An Idaho bankruptcy attorney can interpret and break down the federal laws and state exemptions for those considering filing bankruptcy. Due to the intricacy and nerve-racking nature of personal bankruptcy cases, the counsel and support of a trusted Idaho bankruptcy attorney is a valuable investment.