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Bankruptcy in Missouri

The numbers may make you feel better. It’s nice to know that you’re not the only person is Missouri to have financial woes. In fact, each year about 28,000 bankruptcies are filed in the state. That’s way more people than it appears, at first glance, because many of those filings represent two people, a married couple.

Most of those bankrupt Missourians go on to live normal lives and can pay their bills. A few bankrupt Missourians go on to be famous and financially successful.

  • Sam Walton, who later developed Wal-Mart, was once bankrupt; and,
  • Mark Twain, one of America’s most famous and admired writers, went through bankruptcy as well.

Everyone needs a fresh start once in awhile and bankruptcy may just be the start of a very successful, happy, and prosperous life for you. If you’re a Missouri resident, considering bankruptcy or you are in financial distress, this article is for you.

How Missouri Bankruptcy Law Differs from the Laws of Other States

Exemptions vary from state to state; some states allow residents to choose between their own state exemptions and the federal bankruptcy exemptions. Missouri does not.

  • Bankruptcy exemptions mean that you can keep property, even if you file bankruptcy.
  • They define how much property you can keep and obtain a Chapter 7 discharge or how much debt you have to pay back and receive a Chapter 13 discharge.

These are the most commonly asked about exemptions. There are others and well.

For example, you can keep:

  • Home equity up to $15,000.
  • Motor vehicle $3,000.
  • Household goods up to $3,000.
  • Jewelry up to $1,500.

These exemptions are doubled if a married couple is filing jointly and retirement accounts are not included in the limit.

Your Choices in Filing Bankruptcy in Missouri: Chapter 7 or Chapter 13

73% of Missouri residents, who filed bankruptcy in 2011, filed under Chapter 7 of the US Bankruptcy Code.

  • Chapter 7 discharges some unsecured debts such as personal loans, credit cards, and medical bills. Student loans, alimony, child support, and most taxes cannot be discharged.
  • You can keep any assets covered by exemptions; extra assets are sold to pay off creditors.
  • It takes about 6 months to get through the process and receive your bankruptcy discharge.

27% of Missouri residents, who filed bankruptcy in 2011, filed under Chapter 13 of the US Bankruptcy Code.

  • Chapter 13 calls for the reorganization of debt, though some debt may be discharged.
  • You can keep any assets, such as your house and car, which you can continue to pay for.
  • The process takes 3 to 5 years because much debt is repaid.

To file under Chapter 7, you must pass the “means test”; if you don’t qualify or Chapter 7 or Chapter 7 is not appropriate because of high non-dischargeable debt, Chapter 13 is the most commonly chosen alternative.

Note: Allow a Missouri bankruptcy attorney to run the numbers for you. You may qualify for Chapter 7 even if your income is above the state median income. There are many factors to be considered.

How to Prepare to Work with a Bankruptcy Attorney

Your bankruptcy lawyer will only be able to guide you through your bankruptcy proceeding and give you expert advice if he or she has all of your financial information including assets, income, debts, and any repayments you’ve already made.

Collect it all and ask your bankruptcy attorney if you have questions. That’s what he or she is there for. It is a lot of work but, you can do it; a fresh start will be worth the effort. Both accuracy and honesty are of the utmost importance.

How to Find and Select a Bankruptcy Attorney

Most bankruptcy attorneys will offer a free, no obligation consultation or phone interview so you can determine whether that attorney is a good fit for you.

To find a Missouri bankruptcy attorney, search our site,, or ask friends or the bar association for a referral.

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