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Missouri Bankruptcy Laws
The majority of clients (73%) choose Chapter 7 in Missouri, and therefore, they should understand the exemptions that they may claim to protect certain types of property from liquidation. There are both federal and state statues providing exemptions, but Missouri law allows only state exemptions, including:
Homestead |
Up to $15,000; up to $5,000 for mobile homes |
Personal Property |
Burial grounds up to $100; motor vehicles up to $3,000; clothing, household goods, furnishings, crops, and miscellaneous items up to $3,000 total; health aids; wrongful death recoveries for one who supplied support; additional property up to $1,250 plus $350/child for head of family; $600 for others |
Wages |
For servant or common laborer up to $90; either 30 times the federal hourly minimum wage or 75% minimum of weekly earnings (90% for head of household), whichever is greater |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; public officers and employees; employees of cities with more than 100,000 residents; police department employees; firefighters; highway and transportation employees; state employees; teachers; ERISA-qualified benefits |
Public Benefits |
Worker’s comp; unemployment; Social Security; veterans’ benefits; public assistance; crime victims’ compensation |
Tools of the trade |
Up to $3,000 |
Insurance |
Some forms of life insurance policies and proceeds; stipulated insurance premiums; disability or illness benefits required for support; fraternal society benefits |
A debtor and their lawyer should devise their plan carefully and the debtor attends credit counseling before filing their bankruptcy petition with the court, followed by these steps:
- A bankruptcy trustee is appointed to oversee and manage the petition
- The trustee examines the petition to be sure it is qualified. If a Chapter 7 petition is not qualified, it may be converted to a Chapter 13.
- The trustee holds a 341 meeting, so named because of its section in the bankruptcy code, which is required for the debtor. Their attorney should accompany them, as they will be facing questions from the trustee and possibly creditors, as well, regarding their assets and financial circumstances. For Chapter 13 clients, the trustee reviews their repayment plan to ensure that it is viable.
- If everything is in order, the petition is granted, and the debtor attends debtor education classes before their debts are dismissed.
- Upon successful completion of those classes, the Chapter 7 client has most of their unsecured debt discharged and the Chapter 13 client begins their repayment plan.
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