What Are the Missouri Bankruptcy Exemptions?
Local Bankruptcy Attorneys Uncomplicate the Process
Bankruptcy can be the right option if you’re facing overwhelming debt. Chapter 7 bankruptcy sometimes involves the liquidation of your non-exempt assets to pay a portion of your outstanding debt. But Missouri law allows for several exemptions which protect applicable property and assets from liquidation. If you’re considering bankruptcy, make sure you retain as many assets as possible after filing by consulting with a Missouri bankruptcy attorney at Sader Law Firm.
Many Chapter 7 bankruptcies don’t require relinquishing personal property to qualify for your non-secured debts to be discharged through liquidation. The term “liquidation” can sound a little menacing, and hopefully (as is often the case) it doesn’t apply to your bankruptcy. But for those to which it does apply, you will still be protected in the following ways.
What Are Missouri Bankruptcy Exemptions?
Many people are under the false impression that when you file for bankruptcy, you lose everything automatically. When you file for Chapter 7 bankruptcy in Missouri, some (if not all) of your property is protected through exemptions. And, if you’re married and filing for bankruptcy jointly, you can potentially double those exemptions.
The five common Missouri bankruptcy exemptions are:
- “Tools of the Trade -”
This exemption protects up to $3,000 in value of any tools or materials needed to conduct your trade and/or business.
- Car or other motor vehicle –
$3,000 in personal equity of a car or other motor vehicle (like a motorcycle) is covered in this exemption.
- Place of Residence –
Also called a “homestead exemption”, this exemption protects up to $15,000 in equity for permanent residences (a “permanent residence” refers to the place where the person filing for bankruptcy lives). The exemption also covers up to $5,000 in value for those living in mobile residences (this type of exemption cannot be doubled if joint filing for bankruptcy, though).
- Personal property –
Up to $3,000 of your personal belongings are protected through this exemption. Qualifying belongings include but are not limited to:
- Furniture and other valuable housewares
- Clothes and musical instruments
- Up to $1,500 for wedding rings and around $500 for other types of jewelry.
There are other examples of Missouri bankruptcy exemptions; a local bankruptcy lawyer can help you determine which you may be eligible for.
Can I Use Federal Bankruptcy Exemptions Instead?
In Missouri, you generally cannot use federal bankruptcy exemptions. We live in an “opt-out” state, which means only state—and not federal—bankruptcy exemptions apply. There are exceptions though, because some federal exemptions do come into play if you have federal income or assets.
These federal exemptions usually protect:
- Retirement funds and benefits. Typically, the retirement and ERISA-recognized benefits that employees receive per a retirement plan offered through their workplace are usually considered exempt in Missouri.
- Life insurance benefits. If you are collecting dividends from a life insurance policy — up to $150,000 that is — then this money is exempt from bankruptcy proceedings. However, you must have filed the policy at least 6 months before your bankruptcy. Further, any life insurance benefits that employees of the state (like teachers and other school employees), public officers, firefighters and members of the police force receive from their employment are also exempt.
- Benefits for veterans. Otherwise known as “public benefits”, these benefits also include Social Security and other forms of federal public assistance, workers’ comp and unemployment benefits.
An experienced bankruptcy attorney — especially one well versed in local and state laws — can help ensure the legality of your filing and can also provide protection to the maximum extent of the law when filing for Chapter 7 or Chapter 13 bankruptcy in Missouri.
Questions About Missouri Bankruptcy Exemptions? Contact Us Today
Contact the experienced Missouri bankruptcy attorneys at Sader Law Firm for a free consultation to see if a Chapter 7 or 13 bankruptcy is right for you. We have familiarity with all the local and state laws pertaining to bankruptcy and will make it our chief concern to help you protect what is rightfully yours.
Contact our office today to schedule a complimentary consultation to discuss the details of your case.