Filing Bankruptcy In Missouri?
Are you currently consumed by debt in all directions and thinking about filing bankruptcy in Missouri? Did you recently suffer from a serious illness or injury, leading to increased debt? Have you received a reduction in income?
If so, this article will provide insight into how the bankruptcy process works in the state of Missouri and Kansas.
Here’s what you’ll learn:
Let’s get moving, shall we?
What is Bankruptcy?
Different Types of Bankruptcies
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Chapter 7 or “Liquidation Bankruptcy,” is the process of selling personal assets to pay unsecured debts
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Chapter 13 or “Repayment Plan,” is the process of repaying debt still owed to unsecured creditors.
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Chapter 11 or “Large Reorganization,” is the process of reorganizing debt for businesses who want to remain afloat but need time to get finances back in order.
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Chapter 12 or “Family Farmer/Family Fishermen,” is a type of bankruptcy that enables family farmers and fishermen to restructure their debt to avoid liquidation or even foreclosure.
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Chapter 15 “Cross-Border Cases,” is the process of collecting debts still owed by a debtor from another country.
The two most common types of bankruptcy are Chapter 7 & Chapter 13.
Effects of Bankruptcy
In this case, you'll want to contact an attorney before filing bankruptcy in Missouri or Kansas. There may be alternatives options based on the information you provide the attorney.
How the Bankruptcy Process Works in Missouri
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Chapter 7
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Chapter 13
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Chapter 11
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Chapter 12
First, the courts will examine your finances over the last 6 months and compare it to the median income for Missouri residents. If your income is below the median average, you can file chapter 7 bankruptcy. Conversely, if your income exceeds the median average, you will be required to complete the “Missouri Means Test” to file chapter 13 bankruptcy.
Collect Missouri Bankruptcy Documentation
Credit Counseling
Complete Bankruptcy Documentation
Learn Federal Poverty Guidelines
If you make more than 150% of the federal poverty guidelines, you will be required to pay a filing fee of $335 to file Chapter 7 bankruptcy.
Side note: To stop garnishments, ask the court for an “Installment Agreement” to set up a payment plan for your debts.
File Bankruptcy Documentation
By hiring a bankruptcy attorney, you will not have to submit your documents in person. Consider your options and decide if a bankruptcy attorney is right for you.
Send Documentation to Trustee
Complete Second Bankruptcy Course
Attend Meeting of Creditors “341 Meeting”
In a chapter 13 bankruptcy 341 meeting, the trustee will prioritize your secured debts, structure a repayment plan, and verify you’re paying enough to the creditors you owe. If not, you must attend a “Confirmation Hearing” at a later date and time.
You will need to bring your photo ID, social security card, and bankruptcy documentation with you to your 341 Meeting. If for any reason you are unable to attend, you must notify your trustee immediately to reschedule.
How the Bankruptcy Process Works In Kansas
Credit Counseling
Complete Bankruptcy Documentation
If you’re filing bankruptcy in Kansas, you must complete your bankruptcy forms. Those that are filing Chapter 7 can access their forms HERE. If not, contact your local courthouse for more information on how to access them. If you hired an attorney, they will be able to provide you with the documents you need. Be sure to fill everything out correctly so there are no delays in filing your bankruptcy case.
File & Submit Documentation
To file Chapter 7 bankruptcy in Kansas, you’ll need to pay $335 in the form of a money order when you complete your documents and finish credit counseling. The court will waive your filing fee if you aren’t receiving enough monthly income. If you cannot file because you are being garnished, ask the court to set up a payment plan. Once you have filed bankruptcy, you will receive protection from the Bankruptcy Court, thereby stopping any subsequent garnishments.
If you are filing bankruptcy in Kansas without an attorney, you will need to sign and submit all the documents on your own and make sure everything is done correctly. The Kansas Bankruptcy Court has 3 locations for you to file, Kansas City, Topeka, and Wichita. You will need to bring a valid ID and your bankruptcy documents with you.
If you hired an attorney for your case, they will provide you with the documents you will need to sign.
Send Documentation to Trustee
Complete Second Bankruptcy Course
Attend 341 Meeting
How to Avoid Bankruptcy
Selling some of your belongings can be a great way to free up additional cash to pay off your debts. When you start to fall behind, immediately recognize the problem, then begin to look for a solution. If you wait too long, your credit score will be on the receiving end of substantial damage.
Going over your bank statements allows you to see how you’re spending your money. It may be difficult because you don’t feel comfortable, but it will save you heartache in the future. If you find anything concerning, consider eliminating those expenses altogether.
If you’re having trouble paying your debts, contact your creditors to see how they can help you. You may qualify for a lesser monthly payment, interest rate, or possibly even both.
If you need additional assistance, seek counsel from a qualified credit counselor. A credit counselor can be a great source of knowledge if you want to structure a debt management plan for your debts or get insight on how to avoid financial hardships.
Borrowing money from family and friends can be a great way to avoid bankruptcy if you’re able to repay them. Calculate your total debts and ask a family member or friend if you can borrow money until you get back on your feet.
Oftentimes, circumstances may require you to settle your debts with creditors and debt collectors to avoid bankruptcy. This should be a last resort if bankruptcy is your only other option. Contact the creditors in which you owe and find out what the settlement amount is. Once the agreement is final, pay the settlement amount in full.
How to Sell your House during Bankruptcy
You can sell your house while in bankruptcy, but you will need to work closely with your attorney. Once you locate a buyer and agree on a purchase price, you’re going to need to get the contract approved by the bankruptcy court. Chapter 7 and Chapter 13 work differently, so be sure to consult with your attorney for more information.
The request to sell your house will be presented to the judge assigned to your case, and notice must be given to the trustee as well as your creditors. Then, your attorney will draft a “motion to sell” in compliance with Missouri or Kansas law.
Keep in mind that there are federal guidelines that govern bankruptcy. Federal Rules of Bankruptcy Procedure clearly state that the court cannot grant relief on motions to sell for the first 20 days of the case. Therefore, if you have a buyer lined up to purchase the property, and you’ve already filed bankruptcy, you ought to let them know what’s going on. You don’t want your buyer upset because you failed to disclose information.
If you’re looking for a REAL, accredited local buyer in Kansas City, we are here for you.