Bankruptcy in Rhode Island
Did you know that Rhode Island’s White House Tavern was the very first tavern in the United States and that it still operates today? When you are free from debts and starting fresh, a celebratory dinner at the Tavern would be fitting.
If it looks inevitable that you may not be able to get out from under crushing debt on your own, this article is for you. We’ll show you how Rhode Island bankruptcy law differs from the laws of other states; nutshell the differences between filing Chapter 7 and Chapter 13; guide you in selecting a bankruptcy lawyer; and get you ready to work with your lawyer.
Rhode Island Bankruptcy Exemptions
As a Rhode Island resident, you get to choose whether to use the state exemptions or the federal bankruptcy exemptions. The state exemptions are the more generous of the two.
Here is a summary of the Rhode Island bankruptcy exemptions that people ask about most.
- Homestead up to $300,000.
- Motor vehicle up to $12,000.
- Personal property up to certain limits, depending upon the category.
Many Rhode Island exemptions are doubled, if you’re married and filing jointly. The exemptions typically end up protecting all property and most people who file bankruptcy don’t lose any assets.
The Differences Between Chapter 7 and Chapter 13
In Rhode Island, and as a bankruptcy filer, the court needs to know whether you’re filing under Chapter 7 or Chapter 13 of the Bankruptcy Code. In 2011, 4,827 Rhode Island residents filed bankruptcy and 82% filed under Chapter 7; 18% filed under Chapter 13.
You have the choice between the two if your income is below the state median income or you otherwise qualify by passing the “means test”.
Here is the Rhode Island median income for bankruptcy purposes is:
- $47,798 for an individual
- $61,506 for a family of two
- $68,909 for a family of three
- $88,990 for a family of four
If your income lower than these numbers, you can file under Chapter 7 or Chapter 13.
- In Chapter 7, credit card debts and medical bill debts are discharged. Child support, alimony, most tax debts, and student loans are not discharged.
- In Chapter 13, some debts are discharged and others are repaid over 3 to 5 years.
Get good legal advice before you file.
How to Select a Bankruptcy Attorney
Focus on finding a qualified bankruptcy lawyer with whom you feel comfortable. Sometimes, friends, family, or professionals can provide referrals. If they’ve had a good experience, you likely will too.
You can also find an attorney through the local bar association or by Googling “Find a Rhode Island Bankruptcy Attorney”.
Have at least one conversation with any attorneys you’re considering hiring before you make your selection.
How to Prepare to Work with a Bankruptcy Attorney
We hope we have you focused on your financial future and not the White House Tavern menu. (Although, the lobster and fluke bisque sounds fabulous!!)
Your bankruptcy attorney will need your financial information, so he or she can prepare your filings. Collect and organize a list of your assets, debts, monthly bills, and repayments made to any family members or friends in the last year.
When you get your fresh start, proffered by bankruptcy laws, the Tavern will still be there. After all, it’s been there since 1673.