Written by Attorney Tina Tran.
Updated July 28, 2020
If you’re struggling with debt in Kansas City, you’re not alone. 35% of households in Missouri have debt in collections, and that percentage is much higher in Jackson County. Kansas City also ranks in the 66th percentile among U.S. cities for hard-to-manage credit card debt. Filing Chapter 7 bankruptcy in Kansas City can provide the relief people in financial distress need.
Chapter 7 bankruptcy was created by Congress as a way to give people in financial trouble a way to start over. Most unsecured debt, like credit card debt and medical bills, can be completely eliminated in a Kansas City bankruptcy case. In a Chapter 7 case, the bankruptcy Trustee can sell certain property to help pay creditors. But, bankruptcy exemptions protect property like a certain amount of value in a home or car, furniture, clothing, and other necessities. So, most people who file Chapter 7 keep all of their property. Missouri even offers a “wildcard” exemption. That means the person filing Chapter 7 bankruptcy can choose property to keep, even if that property wouldn’t normally be exempt.
Chapter 13 bankruptcy offers an alternative for people who have too much income to file Chapter 7, or want to keep property that isn’t protected by exemptions. Some people also choose Chapter 13 because they have past-due secured debts, such as mortgage loans and car loans. Chapter 13 is much less common than Chapter 7, and involves a three to five year repayment plan.
The Chapter 7 process is fairly simple, and can usually be completed within four to six months. Most people filing bankruptcy in Kansas City never even have to go to court. The only appearance most make is at a short meeting of creditors, also called a “341 hearing.” The U.S. Bankruptcy Court for the Western Division of Missouri is conveniently located for Kansas City residents, at 400 E. 9th Street. And, many people who need to file for Chapter 7 bankruptcy qualify for free help in preparing their documents.
Kansas City Bankruptcy Lawyers - Estimated Cost
Many people who are thinking about filing bankruptcy in Kansas City are concerned about the cost of a bankruptcy lawyer. While bankruptcy is often a good investment for the future, it can be hard for people already in financial trouble to save up money to file. There’s no consistent answer to “How much does a Kansas City bankruptcy lawyer cost?” Generally, though, attorney fees for Chapter 7 bankruptcy in and around Kansas City, Missouri range from about $800 to $1,300. The cost may be more or less depending on the lawyer and on how complicated the bankruptcy case is.
Often, people considering Chapter 7 bankruptcy in Kansas City can arrange a free consultation with a bankruptcy attorney. This offers a great opportunity to learn more about the bankruptcy process without spending money or making a commitment. For example, you can use your free consultation to find out whether you qualify for Chapter 7 bankruptcy. The consultation is also a good time to make sure any property you want to keep is protected by exemptions. However, not every person considering Chapter 7 bankruptcy needs an attorney.
How to File Bankruptcy in Kansas City, Missouri for Free
Missouri bankruptcy doesn’t have to be expensive--if you know how to file bankruptcy in Kansas City on your own, you can save hundreds of dollars. Here’s a step-by-step overview of what to expect in a Kansas City bankruptcy case.
Collect Your Kansas City Bankruptcy Documents
Filing bankruptcy in Kansas City requires a lot of financial information. Knowing what documents you’ll need in advance can simplify the process and move your bankruptcy case forward more quickly. While special documents may be required in certain cases, the basic documents are the same for most people filing Chapter 7 bankruptcy in Kansas City.
For example, you will usually need pay stubs or other proof of income from the six months before filing. You will also need tax returns or tax transcripts dating back at least two years. Knowing these requirements in advance will give you time to track down information you may not have on hand. For instance, you may have to log in to your online payroll account to print out past check stubs, or request tax transcripts from the Internal Revenue Service before filing bankruptcy in Kansas City. You will also need:
Loan documents for secured debt, such as your home mortgage and your car loan
Statements of retirement accounts and other assets
Information about your other outstanding debts
The bankruptcy Trustee may ask for additional documents after you file.
Take Credit Counseling
Since 2005, people filing bankruptcy in Kansas City and throughout the country must complete credit counseling before filing. Congress hoped requiring credit counseling would help people find alternatives to bankruptcy. A small percentage of people considering bankruptcy do choose a different approach after completing credit counseling. But, most have too much debt and are too far behind by the time they seek credit counseling.
You must file a certificate of completion with your Kansas City bankruptcy petition. Otherwise, your case will almost certainly be dismissed. You can complete credit counseling online, by phone, or in person. When you choose a telephone or online option, you’ll typically read or listen to information on your own for most of the session, and then speak with a credit counselor briefly at the end. The whole session usually takes about 90 minutes.
The U.S. Department of Justice provides a list of agencies approved to provide credit counseling in Missouri. Most of these providers are outside of Missouri and provide credit counseling online, over the telephone, or both. In-person credit counseling is offered in only three locations in the state: Joplin, Springfield, and St. Louis.
Complete the Bankruptcy Forms
The U.S. Bankruptcy Court for the Western Division of Missouri provides the forms needed to file bankruptcy in Kansas City on its website.
Mistakes in filling out these forms or missing information can delay your Kansas City bankruptcy case, or even get the case dismissed. Take the time to educate yourself about the forms and to double-check the information you provide. And, make sure you gather all of the necessary information, such as proof of income and outstanding bills. Don’t guess at dates or balances.
The forms required for a Chapter 7 bankruptcy in Kansas City ask for information including:
Your assets, which includes cash, bank accounts, retirement accounts, personal property and real estate
Any property you have given away or sold recently
Get Your Filing Fee
Filing Chapter 7 bankruptcy in Kansas City costs $335. You may pay in cash, by money order, or by cashier’s check. The Court does not accept debit cards or credit cards. The filing fee covers both court costs and the Trustee’s fee. People who can’t afford to pay the filing fee all at once have two options: to apply for a fee waiver or to pay in installments. Chapter 7 filers whose income is less than 150% of the federal poverty guidelines may request a fee waiver. However, approval isn’t automatic. You may have to explain why you can’t pay the fee in installments.
Any individual filing for Chapter 7 can apply for an installment plan. Often, people whose income qualifies them for a waiver apply for a waiver first, and apply to pay the fee in installments if the Kansas City bankruptcy Court denies the waiver. The full fee must be paid within 120 days of filing and in no more than four installments.
Print Your Bankruptcy Forms
People filing Chapter 7 bankruptcy in Kansas City pro se, which means on their own without an attorney, must file one original set of forms and one copy. The forms must be printed clearly, in black ink on white paper, and on one side of the page only. The original set must be signed in ink.
If you don’t have a printer at home and can’t print at a friend’s or relative’s house, some possible options include:
Visiting a FedEx Office: there are several in Kansas City, including one less than ½ mile from the Bankruptcy Court
Finding another copy shop near your home
Checking into whether your local library offers free or low-cost printing
If you are filing your bankruptcy papers by mail, you will want to make an extra copy to keep until you receive your file-stamped copy from the Court. And, be sure to include a self-addressed, stamped envelope for the Court to return your stamped copy to you.
Go to Court to File Your Forms
You can file your Kansas City bankruptcy forms in person at the courthouse or by mail. Filing in person gets your bankruptcy case moving forward more quickly, and will allow you to get your file-stamped copy immediately. And, if you’ve made a simple mistake like forgetting to sign a form, the Clerk can point it out so you can fix it on the spot. The U.S. Bankruptcy Court for the Western Division of Missouri has three locations, but bankruptcy petitions for the whole division are filed at the federal courthouse in Kansas City. The address is 400 E. 9th Street. The Clerk’s office is open from 9 a.m. to 4:30 p.m. Monday through Friday.
Before heading out to file Chapter 7 bankruptcy in Kansas City, you should know what to expect when you arrive at the courthouse. You will be required to show photo identification to enter the courthouse, and will not be allowed to take a camera or cell phone into the building. Parking is metered or in a paid lot, so make sure you have money with you. You can get directions and find a parking map on the U.S. Courts location page for Kansas City.
Mail Documents to Your Trustee
A Trustee is appointed in every Kansas City bankruptcy case. The Trustee’s job is to keep the case running smoothly and make sure that everyone follows the rules. For instance, the Trustee reviews petitions and schedules to make sure that they are complete and check for signs of bankruptcy fraud. And, the Trustee checks to see whether the bankruptcy filer has non-exempt property that can be sold for the benefit of creditors.
Of course, the Trustee needs information to get the job done. Anyone filing bankruptcy in Kansas City must be prepared to provide documents beyond the completed forms, such as check stubs, bank statements, and tax returns. This additional information goes directly to the Trustee, not to the Court. The Trustee may also request additional documents as needed.
Take Bankruptcy Course 2
After filing but before receiving a discharge, nearly everyone filing Chapter 7 bankruptcy in Kansas City must complete a financial management course. This course is also sometimes called “debtor education.” The course is designed to help people build better financial habits after bankruptcy. Some of the content may already be familiar, but most people who are serious about rebuilding after bankruptcy find some valuable information in the course.
Like credit counseling, debtor education is offered by telephone, online, and in person. Kansas City bankruptcy filers don’t have a local in-person option. The only live options in Missouri are in Springfield and Joplin. However, the Department of Justice lists many approved online and telephonic financial management courses. You must submit proof of completion to receive your bankruptcy discharge.
Attend Your 341 Meeting
Most people filing Chapter 7 bankruptcy never have to appear before a judge, but must attend the 341 meeting. This meeting is also called the “meeting of creditors,” because creditors may attend the meeting and ask questions. Many people are nervous about this meeting, but it is usually short and simple. Preparing for the 341 meeting can ease that tension. First, you’ll show your identification, and the Trustee will talk to you about bankruptcy to make sure you understand what you’re doing. The Trustee also asks questions to make sure the information in the bankruptcy forms is complete and accurate. They may also want to to clarify or add to the information provided.
Creditors don’t usually show up to the 341 meeting in a Kansas City bankruptcy case. They may appear if they believe the bankruptcy filer is hiding assets, or if they want to talk about issues like whether you want to continue to make payments on your car or give the vehicle back and get out from under the debt. Creditors can ask you questions about your income and assets, but the Trustee will be there to keep the process on track.
Dealing with Your Car
Many people filing Chapter 7 bankruptcy in Kansas City are concerned about their cars. In the Chapter 7 process, you may have the opportunity to keep your car and continue making payments, to pay off part of the remaining balance on your car loan and keep the car, or to give your car back and wipe out the loan.
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Missouri Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Jacksonville
Missouri Means Test
Not everyone filing bankruptcy in Kansas City is eligible to seek relief under Chapter 7 of the Bankruptcy Code. If you earn more than the median household income for a household of your size in Missouri, you fail the income limits portion of the Missouri bankruptcy Means Test because it looks as though you are able to pay at least some of your debts. Since the median household income is based on gross income, before your taxes and other deductions are taken into consideration and without regard for living expenses, part two of the Missouri bankruptcy Means Test analyzes how these expenses impact your ability to pay your debts. If, after deducting the allowed expenses, it is clear that you do not have any disposable income to pay even a portion of your debts, you pass the Missouri bankruptcy Means Test and can move forward with a Chapter 7 bankruptcy in Kansas City.
Median Income Levels for Missouri
Missouri Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Missouri
Missouri Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Missouri Bankruptcy Forms
Most of the Missouri bankruptcy forms you need when filing Chapter 7 in Kansas City are based on the official federal bankruptcy forms. These forms can be downloaded as a fillable PDF for free along with this instruction manual. There are some district specific local Missouri bankruptcy forms used only in Missouri bankruptcy cases. The most relevant local forms for individuals filing bankruptcy in Kansas City without a lawyer are available separate from all other local forms to make them easier to find.
Exemption laws are the provisions in state or federal law that determine what property your Trustee could sell for the benefit of your creditors. If you have lived in the Show Me state for at least two years when filing bankruptcy in Kansas City, you are required to use the Missouri bankruptcy exemptions.