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
- Filing for Chapter 13 Bankruptcy Missouri Process
- Missouri Bankruptcy Exemptions
- Bankruptcy Courts and Trustees for Missouri
- Missouri Chapter 13 Bankruptcy FAQs
- 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, which is why we build a Missouri Chapter 13 Plan Payment calculator below that you can use to estimate your Chapter 13 plan payment.
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 the 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 November 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.
Filing for Chapter 13 Bankruptcy Missouri Process
The Chapter 13 bankruptcy process in Missouri is similar for all Chapter 13 cases in the state. Missouri is divided into the Western District and the Eastern District. Your current residence determines whether you file your bankruptcy case in the Eastern or Western District.
In either case, the Chapter 13 process in Missouri is the same. You need to begin by deciding whether Chapter 13 is right for you, locate a Chapter 13 bankruptcy attorney, complete the bankruptcy forms, and attend your bankruptcy hearings.
Let’s discuss the Chapter 13 bankruptcy process in Missouri in more detail.
1) Deciding if a Missouri Chapter 13 Case is Right for You
Chapter 13 is a reorganization bankruptcy. Debtors who file Chapter 13 can afford to repay some of their debts. The amount of your debt that you must repay depends on several factors, including but not limited to:
- Your disposable income (the money you can afford to pay toward debts each month)
- The amount and types of debts you owe
- Whether bankruptcy exemptions protect all of the equity in your assets
- The length of your bankruptcy plan
- Recent financial transactions
There could be other factors that impact the amount of a Chapter 13 plan. You can estimate how much a Chapter 13 plan payment would be by using our free Chapter 13 bankruptcy calculator.
If you cannot pay your debts and you do not meet the income qualifications for a Chapter 7 bankruptcy case, a Chapter 13 bankruptcy case might be right for you.
2) Locating a Chapter 13 Bankruptcy Attorney in Missouri
Even though you are not required to hire a bankruptcy lawyer, filing Chapter 13 without a lawyer is not recommended. Chapter 13 bankruptcy cases are very complex. Calculating a Chapter 13 plan requires a great deal of experience and knowledge. Someone who does not understand Chapter 13 bankruptcy law could pay much more than is necessary to get out of debt.
Also, the court expects you to understand and know the law the applies in your case if you represent yourself. The court will not explain bankruptcy law to you, and it will hold you accountable for the errors you make in your case. Therefore, it is best to have an experienced Chapter 13 bankruptcy lawyer handle your case.
What are the benefits of hiring a Chapter 13 bankruptcy attorney in Missouri?
- A trusted legal advocate who understands bankruptcy laws
- Determines if you should file under Chapter 13 or Chapter 7
- Calculates the lowest Chapter 13 plan payment allowed by law
- Maximizes asset protection so you can keep all your property, including your home and vehicle
- Completes and files all required bankruptcy forms
- Reminds you of deadlines and hearings in your case
- Guides you through the process by explaining each step and providing support at hearings
- Protects you from aggressive creditors who might want more money than they are entitled to receive
Having a Chapter 13 bankruptcy attorney handle your case means you have someone on your side who can help you avoid mistakes and errors that could hurt your case.
3) 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.
4) Completing Your Bankruptcy Forms
A typical Chapter 13 bankruptcy package could be 100 or more pages. When you file Chapter 13, you must complete the approved bankruptcy forms and any local bankruptcy forms required by the bankruptcy court. Your bankruptcy lawyer completes the forms and reviews each form with you to ensure accuracy and completeness before the attorney files the forms with the court.
The forms for a Missouri Chapter 13 case include information about your:
- Real estate
- Personal property
- Bankruptcy exemptions
- Leases and Executory Contracts
The Statement of Financial Affairs is a form with almost two dozen questions about your receive financial transactions. It includes income for the past two years, recent payments to certain creditors and insiders, a list of lawsuits, gifts, contributions, leases, transfers, and other information. Your bankruptcy attorney assists you in gathering information and completing your bankruptcy forms.
5) Filing Chapter 13 in Missouri and Attending Court
Your bankruptcy lawyer files your bankruptcy forms and obtains a case number. The bankruptcy court schedules a First Meeting of Creditors and a Confirmation Hearing. In most cases, these are the only two hearings that most bankruptcy debtors attend. Your bankruptcy lawyer prepares you for the hearing and attends the hearings with you.
Once your Chapter 13 plan is confirmed, you continue to pay your Chapter 13 payments until your case is complete. If you have any problems or questions, you contact your Chapter 13 bankruptcy attorney immediately. Your attorney is there to direct and guide you so that you can complete your bankruptcy plan to get a fresh start, free from the debts that are weighing you down and preventing you from achieving your financial goals.
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|
Missouri Chapter 13 Bankruptcy FAQs
Some common questions that people ask about the Chapter 13 filing process in Missouri include:
What are the benefits of filing Chapter 13 in Missouri?
The benefits of the Chapter 13 filing process in Missouri include:
- Prevent foreclosure to keep your home by catching up with past due mortgage payments over three to five years
- Prevent repossession and keep your vehicle
- Stop wage garnishments, seizures, levies, and debt collection lawsuits
- Stop creditor harassment
- Catch up past-due child support and alimony
- Get rid of unsecured debts for pennies on the dollar
- Resolve tax debts and IRS problems
- Protect property from being sold to pay debts
- You may be able to discharge a second mortgage through Chapter 13
- You may be able to pay less than you owe to satisfy the secured lien on your vehicle
Another benefit of the Chapter 13 process in Missouri is getting rid of the stress and anxiety of dealing with debt problems. Financial problems can cause an enormous amount of stress, which can cause severe health problems. The Chapter 13 process in Missouri allows you to take control of our debts and finances to relieve stress and anxiety.
How much does a Chapter 13 cost in Missouri?
There are several costs of filing Chapter 13 in Missouri. Chapter 13 costs in Missouri include:
1) Filing Fee to the Bankruptcy Court
The bankruptcy filing fee for a Chapter 13 case is $310. The fee is paid to the bankruptcy court. The fee is the same whether you file an individual case or a joint bankruptcy filing with your spouse.
2) Paying for Bankruptcy Courses
There are two bankruptcy courses that you must complete as part of a Chapter 13 case. The first bankruptcy course or Credit Counseling Course must be completed before you file your Chapter 13 petition. You can shop around to find a credit counseling agency in Missouri that offers the course for the lowest price. Most agencies charge $15 to $50 for the course.
The second bankruptcy court or Debtor Education Course must be completed after you file your Chapter 13 case. Many of the credit counseling agencies offer both bankruptcy courses. Some agencies offer discounts for taking both courses through the agency. The Debtor Education Course in Missouri can be as low as $10 through some agencies.
3) Bankruptcy Attorney Fees
The bankruptcy attorney fees for a Chapter 13 case are higher than the fees charged for a Chapter 7 case because there is much more work for the attorney to perform in a Chapter 13 bankruptcy case. However, you do not need to pay all the fees up front. Bankruptcy attorneys generally include all or most of the Chapter 13 bankruptcy fees in the Chapter 13 plan.
Chapter 13 bankruptcy lawyers can itemize their fees, but most charge a flat fee for Chapter 13 cases. The Missouri Bankruptcy Courts limit the flat fee amounts, which are increased periodically to reflect inflation.
If you are interested in filing Chapter 13, you can use our Bankruptcy Attorney Fee Estimator to obtain an estimate of the attorneys’ fees for Chapter 13 in your area. You also receive a list of Chapter 13 bankruptcy attorneys near you. Ascend can help you contact the attorneys to arrange a free consultation to discuss filing Chapter 13 in Missouri in more detail.
4) Miscellaneous Costs
If you choose to file Chapter 13 without an attorney, you will have miscellaneous fees. You may need to pay for credit reports to verify you have listed all creditors on your bankruptcy forms. You are also responsible for the postage for mailing bankruptcy notices and other required forms to creditors and other parties in interest. Throughout your bankruptcy case, you will be required to mail notices or other information to your creditors and parties in interest.
How often can you file Chapter 13 in Missouri?
Some people go through several financial difficulties during their lifetime. A person could need help from the bankruptcy system more than once. For that reason, bankruptcy cases are not limited to one case per person. You can file bankruptcy again if you need debt relief.
There are no restrictions on the number of bankruptcy cases a person may file. However, there are mandatory waiting times for obtaining a bankruptcy discharge. The bankruptcy discharge is the legal order that forgives your debt. Therefore, filing a bankruptcy case without receiving a bankruptcy discharge is generally a waste of time and money.
If you need to file another bankruptcy case, it is crucial to know the waiting periods for receiving a bankruptcy discharge. The time limits are based on the filing dates of the bankruptcy cases:
- Two Years — You must wait two years after filing a Chapter 13 case to file another Chapter 13 case.
- Four Years — You must wait four years after filing a Chapter 7 case to file a Chapter 13 case.
It is usually best to talk to a bankruptcy lawyer before filing Chapter 13 again. You want to ensure that there are no specific situations that apply in your case that could interfere with obtaining another Chapter 13 bankruptcy discharge. Also, there could be another debt relief option that would work in your situation that could help you avoid another Chapter 13 bankruptcy in Missouri.
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, you may want to estimate your Chapter 13 plan payment that you can compare against your current monthly debt obligations.
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.