Protecting Your Property in a Chapter 7 or Chapter 13 Bankruptcy in Missouri

Many people who are considering a Chapter 7 or Chapter 13 bankruptcy in Missouri are completely unfamiliar with exemptions, and how to protect property when declaring bankruptcy. For the most part, most of your property can be protected, but not all of it. This article will help clear up any questions you may have regarding bankruptcy exemptions, regardless of whether you will file Chapter 7 or Chapter 13.

As qualified bankruptcy attorneys, we can advise you that the smartest thing to do is to discuss your situation with a lawyer who can explain what property or assets may be protected by bankruptcy exemptions, and help ensure that you are able to keep the property you want to keep.

Essentially, property that is exempted is protected from creditors; in other words, they cannot seize or take the property away once you have filed bankruptcy. However, it is important to note that certain debts (known as non-dischargeable debts) cannot be erased when you file bankruptcy in Missouri.

Missouri bankruptcy exemptions include:

Homestead

  • Real property to $8,000 or mobile homes to $1,000 (however, joint owners may not both claim the same property/mobile home if filing jointly)
  • Property held as tenancy for the entirety may be exempt against debts owed by only one spouse

Pensions

  • Firefighters, teachers, state employees, police department employees, and highway/transportation employees

Personal Property

  • Appliances, books, clothing, crops, animals, furnishings, household goods, and musical instruments to $1,000
  • Jewelry to $500
  • Health aids
  • Burial grounds to one acre or $100
  • Motor vehicle to $1,000
  • Wrongful death recoveries for individual debtor depended on
  • Personal injury causes of action

Insurance

  • Life insurance dividends, loan value or interest to $5,000 purchased more than six months prior to filing
  • Fraternal benefit society benefits to $5,000, purchased more than six months prior to filing
  • Disability or illness benefits
  • Stipulated insurance premiums
  • Life insurance proceeds if owned by a single woman which insures a brother/father
  • Life insurance proceeds if owned by a married woman which insures her husband
  • Life insurance policy that is still in effect (unmatured)

Miscellaneous

  • Alimony or child support up to $500/month
  • Property of business partnerships

Wages

  • Wages of common laborer or servant up to $90
  • While a bankruptcy judge may authorize more for debtors who are considered low income, the general rule is a minimum of 75% of earned but unpaid wages or 90% of earned but unpaid wages for the head of family

Public benefits

  • Social security
  • Workers’ compensation
  • Veterans’ benefits
  • Unemployment compensation
  • AFDC (Aid to Families with Dependent Children)

It is important to note that with bankruptcy exemptions, limits apply to any property you have equity in. Essentially, this is the difference between what you owe on a property and its value. For instance, your home may be valued at $120,000 while your loan balance is $95,000, meaning the equity you have in your home is $25,000.

At Patton & Knipp, our Kansas City bankruptcy attorneys understand that unless you have been through bankruptcy before, it may be a topic that is fairly confusing or even complicated. Contact our office today to learn more about the types of bankruptcy, and exemptions that help protect your property.


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