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Bankruptcy: Missouri

Filing bankruptcy in Missouri not only gives honest debtors an opportunity to recover from debt, but also repays creditors to the extent that a debtor’s property value or earnings permit. 32,471 bankruptcies were filed in Missouri in 2010, ranking Missouri 16th in the country for the number of bankruptcy filings per capita. 72% of Missouri’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Missouri

Federal law governs bankruptcy proceedings in Missouri, and as such all bankruptcy cases are filed in the US Bankruptcy Courts located in:

  • Missouri Eastern District Court: Cape Girardeau, Hannibal, St. Louis
  • Missouri Western District Court: Jefferson City, Joplin, Kansas City, Springfield, St. Joseph

Although the federal courts have exclusive jurisdiction over bankruptcy proceedings, Missouri law excludes petitioners from using the exemptions listed in the U.S. bankruptcy code in favor of the exemptions provided under Missouri law. With the guidance of a bankruptcy attorney Missouri petitioners can gain a full understanding of what personal property they are permitted to keep in bankruptcy and what must be sold.

Chapter 7 Bankruptcy, Missouri

Chapter 7 bankruptcies in Missouri are the most common bankruptcy petition filed.  Chapter 7 is suitable for petitioners who do not possess major assets such as investments or much equity in a home, for the reason that a Bankruptcy Trustee may liquidate personal property that is not protected by Missouri’s bankruptcy exemptions. Liquidation occurs when a court-appointed Trustee converts personal assets to cash to distribute among creditors. Missouri’s Chapter 7 bankruptcy law allows petitioners to keep some essential property and such exempt assets are cannot be claimed by creditors seeking repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Missouri Bankruptcy Exemptions

Missouri bankruptcy law assigns defined property exemptions permitting debtors to keep specific personal property and assets so bankruptcy proceedings do not leave them financially ruined.  In real terms, this means creditors cannot force debtors to sell the shirt off their back to settle outstanding debts.  Bankruptcy in Missouri lets petitioners choose exemptions from the state list, exclusively.

Due to changing exemption values, individuals or couples entering bankruptcy proceedings should first visit a Missouri bankruptcy attorney to learn which exemptions are applicable to their current financial situation.  Missouri bankruptcy exemptions include:

Missouri Homestead Exemption

  • $15,000 total: Real property; $5,000: Mobile home (joint owners may not double)

Missouri Tenancy by Entirety Exemption

  • Bank accounts owned as tenancy by the entirety may be exempt against debts owed by only one spouse
  • Tenancy by the entirety is recognized in ownership of both real and personal property, and in the case of real property, such interests are exempt.. Consequently, interests of the debtor in real property as a tenant by the entirety are exempt in Bankruptcy Code.
  • Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

Missouri Personal Property Exemption

  • $3,000 total: Appliances, household goods, furnishings, clothing, books, crops, animals and musical instruments
  • $3,000 total: Motor vehicle
  • $1,500 total: Wedding ring; $500 total: other jewelry
  • Health aids
  • Wrongful death recoveries for person you depended on
  • $100 total or Burial grounds to 1 acre

Missouri Tools of the Trade Exemption

  • $3,000 total: Implements, books and tools of trade

Missouri Wage Garnishment Exemption

  • 75% of weekly earnings (90% of weekly earnings for head of family), or 30 times the federal minimum hourly wage, whichever is more; low-income debtors may be authorized for more
  • $90: Wages of servant or common laborer

Missouri Public Benefits Exemption

  • Social Security and Public assistance
  • Workers’ and Unemployment compensation
  • Veterans’ benefits
  • Crime victim’s compensation

Missouri Insurance Exemption

  • Disability or illness benefits
  • $5,000 total: Fraternal benefit society benefits, bought more than 6 months prior to filing
  • $5,000 total: Life insurance dividends, loan value, or interest, bought more than 6 months prior to filing
  • Assessment plan or life insurance proceeds
  • Un-matured life insurance policy
  • Stipulated insurance premiums

Missouri Pensions and Retirement Savings Exemption

  • Firefighters and Police department employees
  • Highway and transportation employees
  • Public officers and employees
  • State employees and Teachers
  • Employees of cities with 100,000 or more people
  • Employee benefit spendthrift trust
  • ERISA-qualified benefits needed for support (only payments being received)

Missouri Miscellaneous Exemption

  • $750 per month: Alimony, child support
  • Property of business partnership

Missouri Wild Card Exemption

  • $1,250 total: Any property if head of family, else $600; head of family may claim additional $350 per child.

Chapter 13 Bankruptcy, Missouri

In 2010, 28% of petitioners filed for protection under Chapter 13 bankruptcy in Missouri.  Filing Chapter 13 bankruptcy in Missouri initiates a financial restructuring process where a court-appointed Trustee manages the petitioner’s finances to develop and implement a 3-5 year repayment plan, using the debtor’s future earnings to repay creditors.  Chapter 13 petitioners in Missouri keep most – or all – of their property.

How to File Bankruptcy in Missouri

Eligibility for property exemptions should be a major factor when deciding if bankruptcy protection is a feasible solution to one’s financial problems. The ideal resolution will include protecting major assets and discharging major debts.  Because personal bankruptcy cases are distinctive and challenging, a Missouri bankruptcy attorney can be a great source of knowledgeable advice concerning the benefits and impact of Chapter 7 or Chapter 13 bankruptcy.

Bankruptcy Attorney: Missouri

Filing for bankruptcy protection can be a stressful and complex process.  A Missouri bankruptcy attorney can clarify federal bankruptcy laws and state property exemptions and can advise petitioners what bankruptcy options are a good fit for their individual circumstances.