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Vermont Bankruptcy Laws

Vermont Bankruptcy Laws should be known by every resident of the state of Vermont. Every consumer is in danger of a financial turmoil. No matter how hard you try to make things work if you have already missed a number of payments from your credit card bills and mortgages, then you should expect credit companies to come knocking at your door. Before it’s too late, avail of the bankruptcy protection program. Vermont bankruptcy laws are rather strict with its requirements and eligibility for bankruptcy protection due to the number of bankruptcy fraud cases discovered in recent years.

In 2005, a new US statute was passed making revisions on the amount of work to be accomplished before qualifying for a Chapter 7 or Chapter 13 bankruptcy protection. The complex processes involved have even become more complex and a mandatory credit counseling and education program is imposed to every debtor who wants to apply for bankruptcy. The purpose of this counseling program is to teach each debtor the ability to handle their money and device budgets for future purposes. The agency conducting the counseling program should be on the approved list of the bankruptcy court of Vermont and should be attended 180 days prior to the filing of bankruptcy petition.

It is imperative to determine the bankruptcy program you need to avail. If you are really in dire need of government assistance, there’s no need to waste time applying for the wrong program. There are six types of bankruptcy programs, but of these only two are applicable for individuals, married couples, and families. Chapter 7 bankruptcy program or liquidation bankruptcy is defined as the total eradication of a debtor’s dischargeable debts by way of non-exemptions liquidation. These assets sold and the proceeds are paid off to the creditors. There are certain exemptions that will be protected from the creditors, and these you can keep when starting anew. A trustee arbitrarily appointed by the bankruptcy court will handle and oversee the various processes involved in Chapter 7 from reviewing your case for eligibility to discharging the remaining debts after the creditors have been paid off.

Most of the time, debtors opt to apply for Chapter 7 but for some who apply for Chapter 13 the chances of acceptance into the program is higher. Unlike the previous program, Chapter 13 is defined as a debt reorganization program where a debtor submits a repayment plan summarizing the particulars on how to pay his creditors at the allotted time period. A debtor should earn a regular monthly income to be able to apply for this program because this is also the basis of the duration at which the debts are paid. For income earners who go beyond the state median level, a period of 5 years is given to pay all debts, while for those whose income are under the state’s median, a 3-year period is applied. The trustee is again in charge of all processes from administering the medians test to implementing the repayment plan.

Vermont bankruptcy laws have defined a list of exemptions for the citizens of the state. This is done in order to augment the meager list of exemptions provided by the federal laws. The following is a partial list of exemptions:

• A debtor’s home worth $75,000;
• Wedding ring and $500 worth of jewelry;
• Vehicles at $2,500;
• Clothing, books, appliances, and more for $2,500;
• 75% of weekly earnings; and
• Benefits like life insurance, support payments, disability benefits, and more.

Deciding to file for bankruptcy is not an easy decision and to ensure that you’ve already made up your mind, the state laws of Vermont require you to attend another counseling program after filing for bankruptcy.