Missouri Bankruptcy Laws should be known by every resident of the state of Missouri. While it is true that consumer credit offers a lot of advantages for the borrower, it also has its disadvantages. Together with the rise of credit card usage comes the ever increasing rate of bankruptcy declaration. For citizens who are confident to declare bankruptcy because it provides a sure way out of debts, they should read about Missouri bankruptcy laws.
In this case, the saying “what you don’t know won’t hurt you” does not apply. What you don’t know in bankruptcy basics will really hurt you and it may leave you in a state of numbness. Of particular importance is the 2005 law Bankruptcy Abuse Prevention and Consumer Protection Act that made financial restrictions, stricter application requirements, and complex paperwork. You should read and be informed of what’s happening.
For starters, you have to distinguish between Chapter 7 and Chapter 13, and see to it that you make the right choice. For debtors who have nothing to lose, they opt to apply for the most common Chapter 7 bankruptcy protection program. The debtor’s non-exempt assets will be subject to the government’s forfeiture through the court-appointed trustee. These assets will be sold and the proceeds will be distributed to your debtors. But before all of these procedures will happen you have to undergo through a rigorous screening process.
For every bankruptcy case, a trustee is appointed to determine if you qualify for the said case. This is done through a comparison of the debtor’s monthly income against the median income level of the state of Missouri. A monthly income lower than the current statistics allows you to apply for Chapter 7.
On the other hand, if the results post higher than the median income level, you will have to settle for Chapter 13 bankruptcy protection. A debtor’s assets will be protected from creditors in Chapter 13 because instead of using these to pay for your debts, a repayment plan is implemented. This should be proposed by the debtor himself, with the help of the trustee, and it is the debtor’s responsibility to prove in court that he will be able to pay his creditors in a period of 5 years. Should the court grant permission to implement this plan, the trustee will see to it that the monthly funds will be collected and distributed accordingly to the creditors according to the priority structure developed by the bankruptcy courts. At the same time this repayment plan is ongoing, the barrage of phone calls and flood of due bills that the debtor receives from the creditor will stop as mandated by the court.
To discourage debtors from filing bankruptcy at the merest sign of trouble, the federal laws impose stricter exemptions. A friendlier version of exemptions is provided by Missouri bankruptcy laws to help the working class citizens of the state. Some are the most important exemptions for Missouri:
• Your home with an equity value of up to $15,000;
• Wedding rings worth up to $1,500 and other jewelry worth $500;
• Household goods worth $3,000;
• 75% of earned but unpaid wages for individuals and 90% for head of the family;
• Vehicle up to $3,000; and
• Benefits like pensions, health aids, and public compensations.
There are two ramifications of a bankruptcy declaration: this application will appear in your credit record for up to 10 years and it can affect your credit rating giving you a hard time to apply for new credit.