Bankruptcy Frequently Asked Questions in Jefferson City, MO

Why do people file bankruptcy?

People have financial problems for many reasons: job loss, reduced job hours, high medical bills from illness and/or accidents, starting a new business that did not succeed, failing businesses due to the bad economy, payday loans that got out of control, and credit card balances, fees, payments that you can no longer afford.

How will bankruptcy help me?

Bankruptcy can stop collection activities by creditors including harassing phone calls, collection letters, vehicle repossessions, home foreclosures, lawsuits, wage garnishments, bank garnishments, and some IRS/ state tax collections.

The main goal of a bankruptcy is to get rid of your debt through a bankruptcy discharge. How you obtain a discharge (what debts you have to pay and how long you will be in bankruptcy) depends on the type of bankruptcy that you file. 

Not every type of debt can be discharged. In general, you cannot discharge most taxes, child support, maintenance (alimony), most student loans, court fines and criminal restitution, personal injuries caused while driving under the influence, and debts incurred through fraud.

What are Exemptions?

When individuals file bankruptcy, they can claim certain property as exempt. The exemptions vary from state to state but in Missouri you generally can claim as exempt $3,000 in automobiles, $3,000 in household goods, $1,500 in a wedding ring plus $500 in other jewelry, unlimited IRA, 401K or other qualified retirement plans, $3,000 tools of the trade, life insurance policies, $15,000 in equity in your home and possibly other exemptions if you have dependants. Additionally, social security benefits are exempt.

Why would I file Chapter 13 instead of Chapter 7?

Some individuals are ineligible for Chapter 7 because of prior bankruptcy discharges or because they make too much money and therefore have to consider Chapter 13. If you are facing a foreclosure of your home or repossession of your car, Chapter 13 can stop such actions and allow you an opportunity to get caught up on your payments. Tax debts can be repaid in a Chapter 13 without incurring additional penalties and interest. While certainly not for all debtors, Chapter 13 can be an appropriate tool to allow you to recover from your bad financial situation.

When do I file my bankruptcy?

For most clients, there is no hurry to file bankruptcy. However, if you are trying to stop a pending foreclosure, repossession, garnishment, time is of the essence and we recommend that you speak and/or meet with a bankruptcy attorney as soon as possible.

One of the most important responsibilities of a bankruptcy debtor is to fully disclose your financial situation in your bankruptcy documents. You will be required to provide tax returns, paychecks, bank statements, car titles, deeds of trust/ mortgages. You will have to complete bankruptcy paperwork where you must list all assets, all debts (even those you want to keep), your current income, your current living/ household expenses, your income for the past three years, information on large creditor payments, transfers of property, and other information from your financial background.

You will also be required to take two credit counseling classes by phone or online as part of the bankruptcy process. The first one must be taken before you can qualify to file a bankruptcy. We will give you a list of companies that have been approved to offer this counseling. 

Once the paperwork has been completed by you and reviewed by us, we will meet with you to finalize your bankruptcy documents and file them with the court.

Where do Reed Law, P.C., clients live?

Reed Law attorneys are licensed to practice in the Western District of Missouri. We represent debtors located throughout Mid-Missouri including the counties of Benton, Boone, Callaway, Camden, Cole, Cooper, Hickory, Howard, Miller, Moniteau, Morgan, Osage, and Pettis. Our office is conveniently located in Jefferson City, Missouri - a short driving distance for those living in Mid-Missouri.

What should I do if I think bankruptcy may help me?

Please call our office at 573-635-8500. We will discuss your situation with you and set up an appointment to explain bankruptcy and determine if bankruptcy is an option for you.