Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major long-term consequences. This warrants careful consideration of the costs and benefits. Since it's a creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Missouri will be the same as everywhere else in the country. Individual courts in Des Peres, Missouri will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Des Peres, Missouri
In Des Peres, Missouri, there are 2 main types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.
Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some forms of debt, however, can't be discharged in Chapter 7 Bankruptcy in Des Peres, Missouri. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Des Peres, Missouri
Chapter 13 Bankruptcy in Des Peres, Missouri is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each individual case. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Des Peres, Missouri
The answer to this question depends strongly on your individual situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
Whatever your situation, you should speak with a local Des Peres, Missouri bankruptcy lawyer. Your attorney will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.