Have you wondered if filing Chapter 13 in Missouri is the best way to get rid of your debt problems? Would filing bankruptcy help or hurt your financial situation? If you have questions about filing Chapter 13 bankruptcy in Missouri, we have answers.
In sum, the goal of this article is to provide everything you need to know about filing a Chapter 13 bankruptcy in Missouri. Let’s look at what we will go through:
- Chapter 7 vs. Chapter 13 Bankruptcy in Missouri
- Calculating Chapter 13 Plan Payments in Missouri
- Means Testing in Missouri
- Missouri Credit Counseling and Debtor Education Courses
- Missouri Bankruptcy Exemptions
- Bankruptcy Courts and Trustees for Missouri
- Alternatives to Filing Bankruptcy in Missouri
Chapter 7 vs Chapter 13 Bankruptcy in Missouri
A Chapter 7 bankruptcy case requires that you pass an income test to receive a bankruptcy discharge (debt forgiveness). If your income exceeds a certain amount, you may not qualify for a bankruptcy discharge under Chapter 7 unless your debts are primarily business debts. The purpose of the Chapter 7 process is to provide debt relief for individuals who cannot afford to repay their debts.
However, Chapter 13 bankruptcy cases are designed for individuals who can afford to repay some of their debts, but they need help restructuring their debts into an affordable plan. Through the Chapter 13 process, debtors (the individuals who file the bankruptcy case) propose a plan that repays some or all of their debts. Although, how much you must pay through a Chapter 13 plan depends on numerous factors.
Calculating Chapter 13 Plan Payments in Missouri
Your Chapter 13 plan payment in Missouri depends on your unique financial situation. Factors used when calculating a Chapter 13 plan include, but are not limited to:
- Disposable Income — The amount of income you have each month after subtracting allowable payroll deductions and allowable living expenses from your gross monthly income.
- Assets — In some cases, the value of your assets could increase the amount of your Chapter 13 plan if your assets have large amounts of non-exempt equity. We discuss Missouri bankruptcy exemptions in more detail below and how exemptions impact your Chapter 13 plan.
- Debts — Some debts must be paid in full through the Chapter 13 plan (priority unsecured debts such as taxes, alimony, child support, and administrative costs). Other creditors may receive partial payments, including unsecured debts, such as medical bills, credit card debt, and personal loans. Chapter 13 plans typically include back mortgage payments and car loan payments.
- Recent Financial Transactions — Some recent financial transactions could impact your Chapter 13 plan.
Try the Ascend free Chapter 13 calculator to estimate the amount of your Missouri Chapter 13 plan payment. You can also explore detailed information about Chapter 13 by reading our article entitled “Chapter 13 Bankruptcy – Everything You Need to Know.”
Means Testing in Missouri
As part of the bankruptcy process in Missouri, you must complete a Means Test. The Means Test calculates your average monthly income (AMI), annual median income, and disposable income. Consequently, each of these figures is important for a Chapter 13 case.
Calculating Average Monthly Income (AMI)
Your average monthly income (AMI) is calculated using all household income received during the six months before filing a Chapter 13 case. Then, the total of all income over six months is divided by six to determine your AMI.
To calculate your annual median income, you multiple the AMI by 12. Annual median income is used in a Chapter 13 case to determine whether you are required to submit a 60-month bankruptcy plan.
If your median income exceeds the Missouri median income levels, you must submit a 60-month plan. Alternatively, if your median income is below the Missouri median income, you may qualify for a 36-month bankruptcy plan. Although, you may still choose to propose a 60-month plan based on your specific situation and needs.
The median income in Missouri for bankruptcy cases is based on information gathered by the United States Trustee’s (UST) Office. Also, the UST’s office revises the data periodically to ensure it reflects the current income for each state. Furthermore, you can view the current median income figures used for Missouri Chapter 13 cases by clicking here. The latest figures are for cases filed on or after May 1, 2020.
|# of People||Annual Income|
Calculating Disposable Income for a Chapter 13 Plan
There is a second part of the Means Test that calculates your disposable income. In most cases, all disposable income must be contributed to a Chapter 13 plan to repay your unsecured creditors. Unsecured creditors typically receive a small percentage of the money owed to them through a Chapter 13 plan. Comparatively, most unsecured debts are forgiven or discharged upon the successful completion of your plan.
However, only certain living expenses may be deducted from your average monthly income. Although, most required payroll deductions are included in the allowable expenses. The United States Trustee’s Office publishes a list of the living expenses that are allowable based on the size of your household. It’s important to note, these expenses are restricted to a maximum amount. For example, these expenses include food, clothing, household supplies, and out-of-pocket health care expenses.
If your expenses exceed the maximum amount or you have special expenses, you need to request approval of those expenses and provide proof of the expenses to the court.
Missouri Credit Counseling and Debtor Education Courses
As part of your Chapter 13 case in Missouri, it is a requirement to complete two bankruptcy courses. The bankruptcy courses are available online from approved companies for a small fee. Moreover, the courses typically take between 90 minutes and two hours to complete.
The list of approved Missouri Credit Counsel Agencies and approved Missouri Debtor Education Providers can be found on the UST’s website. Accordingly, it’s a good idea to check to make sure you are using the most recent list of approved providers.
The Credit Counseling Course needs to be complete before you file a Chapter 13 case. Also, you need to complete the Debtor Education Course after filing the Chapter 13 petition. It is a good idea to complete the second bankruptcy course as soon as possible after filing the Chapter 13 case so that you do not forget about the course and lose your bankruptcy discharge.
Missouri Bankruptcy Exemptions
Bankruptcy exemptions protect the net equity in property from repaying your debts. In a Chapter 13 case, non-exempt equity increases the amount of money you must pay each month to your unsecured creditors. Therefore, it is important to claim all allowable bankruptcy exemptions.
Net equity is calculated by subtracting a valid lien (i.e. mortgage, title loan, etc.) and the allowable bankruptcy exemption from the fair market value of an asset. If the result is zero or negative, the asset does not impact your Chapter 13 plan payment.
Federal Bankruptcy Exemptions
Federal bankruptcy exemptions are located in the Bankruptcy Code under 11 U.S.C. §562. You can also view a list of the federal bankruptcy exemptions published by NCLC. The amounts of the bankruptcy exemptions periodically change.
However, the Bankruptcy Code permits states to “opt out” of using federal bankruptcy exemptions. Most states choose to enact state-specific bankruptcy exemptions. Some states require debtors to use state-specific exemptions, while other states allow debtors to choose between federal and state bankruptcy exemptions.
Missouri Bankruptcy Exemptions
Missouri has opted out of federal bankruptcy exemptions. Therefore, with very few exceptions, you must use Missouri bankruptcy exemptions if you have resided in Missouri for at least 730 days before filing a Chapter 13 bankruptcy in Missouri. If you have not resided in Missouri for at least 730 days, you must follow the rules of the state you resided in for the greater portion of 180 days before the 730 day period.
Unfortunately, some Missouri exemptions are not as generous as federal bankruptcy exemptions or other state bankruptcy exemptions. If you are considering a move to Missouri soon or recently moved to Missouri, you may want to contact a bankruptcy lawyer to discuss the exemption laws that apply in your case.
Missouri Revised Statue §513.430 and §513.475 outline most Missouri bankruptcy exemptions. The specific amounts used for Missouri bankruptcy exemptions are revised periodically. As a reult, you must use the most current information available. Meanwhile, you can check the most recent revisions to the Missouri Revised Statutes Chapter 513, check with the Missouri General Assembly, or a Missouri bankruptcy lawyer.
Bankruptcy Courts and Trustees for Missouri
Missouri has two districts for bankruptcy filings. Firstly, the Western District of Missouri serves the counties located in Western Missouri. Bankruptcy courthouses are located in Kansas City, Jefferson City, and Springfield. The court provides specific information related to each location on its website, including the court hours, parking information, and procedures for the courthouse.
Debtors who file within this district should be aware of the local bankruptcy rules and procedures for this district. They are available on the court’s website, including information that can be helpful if you are filing Chapter 13 without an attorney.
Secondly, the Eastern District of Missouri serves the counties in Eastern Missouri. Bankruptcy courts for the Eastern District are located in St. Louis, Cape Girardeau, and Hannibal. In addition, more information about each division, including hours, street addresses, and court procedures are located on the website.
Debtors who file in the Eastern District of Missouri need to read and understand the local rules and procedures for this district, if they choose to file Chapter 13 without an attorney.
Chapter 13 Trustees in Missouri
A Chapter 13 trustee administers each Chapter 13 bankruptcy case. Although, you do not have a choice of your Chapter 13 trustee. You can find a list of the current Missouri Chapter 13 trustees on the UST’s website or below:
|Eastern||Diana S. Daugherty||(314) 781-8100|
|Western||Richard Fink||(816) 842-1031|
Alternatives to Filing Bankruptcy in Missouri
However, a Chapter 13 bankruptcy in Missouri may not be right for everyone. You may have another solution to your debt problem that works better for your situation. Ascend’s goal is to help you explore various debt relief options to help you find a solution to your debt problems that work for you.
Our Debt Settlement Guide and our article entitled “Debt Management vs. Debt Settlement” provide valuable information about non-bankruptcy alternatives for getting out of debt. You can also read through our FAQs about debt settlement and compare debt consolidation to debt settlement to learn more about ways that you can get out of debt without filing bankruptcy.
Before you make any decisions regarding debt relief, make sure you have all the facts.
Should I Pursue A Chapter 13 Bankruptcy Case in Missouri?
In short, deciding to file a Chapter 13 bankruptcy case in Missouri can be overwhelming. Before you file bankruptcy, check out our Savvy Debt Payoff app. You might be able to pay off those debts efficiently and quickly without bankruptcy help.
If you are more of a visual learner, you may want to check out the video below summarizing a Missouri Chapter 13 bankruptcy.
If you have questions or need more help, please contact Ascend online or by texting/calling us at 833-272-3631.