Written by Attorney Tina Tran.
Updated June 12, 2020
People have problems. Some are because of bad decisions. Some are because of things we can’t control. Either way, sometimes we need help. Help may come from a friend or family member. But, that kind of help can have strings attached. It also requires us to share information we might not want to share. A better solution might be filing a Chapter 7 bankruptcy. It is not the only type bankruptcy, but is generally the simplest. It also is finished quicker than other types of bankruptcy. What you are seeking in bankruptcy is a discharge. That is the Order of the Court that takes away your debts. If your income is below the median income for Missouri you may decide Chapter 7 is for you. If you are behind on your mortgage, and trying to save your home from foreclosure, Chapter 13 would be better. Having the need to pay past due taxes may also be a good reason to look at Chapter 13. If you need to spread out your payments on automobiles or possibly lower the interest rates, Chapter 13 may be a good option as well. Chapter 12 is limited to farmers and commercial fisherman. Chapter 11 is usually used by businesses to help in reorganizing debt, and is a very costly alternative. One thing to keep in mind when filing bankruptcy is the need to be honest. The documents you file with the Court are filed under penalty of perjury. That means you must be truthful. Bankruptcy gives you a fresh start as long as you are honest. Filing bankruptcy in Springfield places you in the Southern Division of the Western District of Missouri. The address for the Court is 222 N. John Q. Hammons Parkway, Springfield, MO 65806. The Southern Division includes Cedar, Christian, Dade, Dallas, Douglas, Greene, Howell, Laclede, Oregon, Ozark, Polk, Pulaski, Taney, Texas, Webster and Wright counties. If you live in any of these counties you would file in Springfield, and you may be able to get free legal assistance.
Springfield Bankruptcy Lawyers - Estimated Cost
In researching the cost of a bankruptcy lawyer in Springfield, the easiest way is to go online. In deciding on an attorney you will find some attorneys advertising the fees for filing a Chapter 7 bankruptcy beginning as low as $500, plus costs. Some are showing fees beginning at $999. It is very important to understand what the term plus costs means. Is it limited to filing fees? Could it include the costs of classes required before and after filing? Before retaining an attorney you need to have a clear understanding of what your total expense of filing will be. The top end could be as high as $2,500. Some attorneys offer free consultations.
How to File Bankruptcy in Springfield, Missouri for Free
Filing bankruptcy in Springfield is a process. There are requirements you need to meet, and the list of those requirements are shown below in the proper order.
Collect Your Springfield Bankruptcy Documents
When filing a Springfield bankruptcy you will need to give six months of pay stubs to the Trustee, leading up to the date of filing your case. Most employers will provide them to you if you request them. If you are self employed, the Trustee may require a profit and loss statement. Some trustees may be satisfied with six months of bank statements if your checks are automatically deposited. You may need to provide the bank statements anyway. You will also need to provide the last two years of income tax returns. This includes both your federal income tax return and your Missouri state income tax return. If you do not have your returns you might need to get your accountant or CPA to provide them. If you are of an age or an income level where you have been advised by the IRS that you do not need to file returns, it is possible you will need a statement showing no returns are required. If you prepared your own returns and did not keep a copy or cannot download a copy you can get a transcript from IRS by going to the IRS website. It usually takes two or three weeks to get the transcript sent to you.
Take Credit Counseling
If you are more comfortable going to a physical location to take your consumer credit counseling course you can contact Consumer Credit Counseling of the Ozarks to make an appointment at (800) 882-0808. They have more than one location and can direct you to the nearest location for you. They also have services available online at consumer credit. There are numerous credit counseling services available to you online, and the cost is different for each. The important thing is to get a Certificate quickly.In a Missouri bankruptcy, the Credit Counseling Certificate is usually filed with the Clerk of the U.S. Bankruptcy Court at the time that you file all other documents. You should expect the course to take you 1 to 2 hours to complete. Make sure you set aside enough time to complete the course in one session. The purpose of this course and the second course you will take after filing the case is to get you accustomed to handling your money is an organized manner.
Complete the Bankruptcy Forms
The bankruptcy forms you will need to file a Chapter 7 bankruptcy in Springfield consists of Schedules A through J. There are other forms as well, including a Statement of Financial Affairs, and a Statement of Intentions. Being thorough is important. Most people understand to not pick and choose which creditors they list. In your situation they would include all creditors, and all collection agencies. Each statement shows at the top what is to be included. It is important that all information be readable. Typing them is probably better than writing them out by hand, especially if your handwriting is like mine, really bad. The forms are designed to give the Court and the trustee a clear picture of debts and assets. There are certain assets you are allowed to keep when you file bankruptcy. They are called exempt assets, and are determined by Missouri state law. We’ll discuss these further in this outline. Schedule A and B need to show any property that you own. Schedule A deals with real estate. If you own a timeshare it would be listed here. Most people find that timeshares are almost never a good value, and with bankruptcy you have the opportunity to get rid of a timeshare. In Schedule B you will list your personal property, and will value the property. It does not matter what you paid for the property. Auction or garage sale value is generally accepted. If you have more assets than you are allowed to keep the Trustee can take possession of the assets and auction them off. This is why you need to use auction or garage sale value. It is not to undervalue property. It is to recognize that personal property goes down in value after you purchase it. Schedule C allows you to list exempt assets, which are possessions you are allowed to keep. Be thorough. List everything that applies to each schedule. When filing bankruptcy in Springfield most people make certain they list all income, and all expenses. Don’t exaggerate. Look at your spending history from your bank statements, and try to be as accurate as possible.
Get Your Filing Fee
Filing fees are designed to pay the cost to the government for handling of your paperwork. The fees also provide a fee for the Chapter 7 trustee for handling your case. The filing fee does not vary based on the size of the family. It costs the same for a family of three as it does for a family of six. Sometimes saving the filing fee can be very difficult, especially if you are unemployed or have expenses greater than your income. When you file a Springfield bankruptcy you can apply to have the Court waive your filing fee, and the Court may do so. There is a chance the Court will not waive the fee, but will allow you to pay it over two to three months. If the Court allows you additional time to make installment payments be sure to pay each payment in a timely manner. Otherwise, your case could be dismissed.
Print Your Bankruptcy Forms
When Filing bankruptcy in Springfield take the Clerk of the Court two copies of the petition and schedules. It is a good idea to sign and date every page that has a signature line, and initial all other pages. This will show that you have reviewed all documents. The Clerk will file the original and return one that is time stamped to show exactly when you filed. You can make additional copies of the set the Clerk gives back to you. If you don’t have a printer you can usually go to a public library or office supply store to have copies made. I have listed the address for the Bankruptcy Court in the paragraph titled Filing Bankruptcy in Springfield, Missouri.
Mail Documents to Your Trustee
The trustee is appointed by the office of the United States Trustee, and their job is to make certain that you have been thorough in filling out your documents. Also, if you have assets you cannot exempt, the trustee can take them and sell or auction them. The trustee may offer to sell the excess assets back to you. Any funds raised by the trustee will go to unsecured creditors, and the trustee will receive a fee for doing this extra work. When filing Chapter 7 Bankruptcy in Springfield, the trustee’s name and address will be listed on the Notice of Commencement you will receive from the Court after the case has been filed. You will provide the bank statements, wage or pay stubs, and tax returns to the trustee. Be sure to show only the last four numbers of your social security number or the social security number of any family member listed on your tax returns. Mail these as soon as you get the Notice of Commencement so you won’t forget to get them sent in a timely manner.
Take Bankruptcy Course 2
If someone took the first course at a physical location, it is likely they would do the same for the second course. If you took the first course online, you should be able to use the same company for the second. When you have filed a Springfield bankruptcy most people would do the second course soon after filing. You don’t want to fail in getting it done. Out of sight, out of mind, is not a good idea. If this course is not taken you will not get your discharge. So do it early, and it will be out of the way.
Attend Your 341 Meeting
The 341 meeting gets its name from section 341 of the U.S. Bankruptcy Code. In a Chapter 7 bankruptcy in Springfield it is conducted by theTrustee, and it’s an opportunity for creditors to appear and ask questions should they wish to do so. In most cases, creditors do not attend. The bankruptcy judge is not allowed to be present. It is not technically a court hearing. It is an opportunity for the trustee to question you under oath, and for you to answer honestly any question of the trustee. Most of these meetings only take a few minutes. Be sure to take your government ID (driver’s license) and your social security card with you to the meeting.
Dealing with Your Car
If you have no equity in your car you should consider surrendering it. If you do so, you will not be obligated for any further payment. You can choose to reaffirm, or keep the debt and continue paying for the car. Sometimes you can decide to not reaffirm the debt, but continue paying for the vehicle. Depending on the creditor, this may be a good choice. There is a process known as redemption where you agree to pay the value of the car through a company called 722 Redemption, but be aware that if you do so, the interest rate will be high. Surrendering a car in bankruptcy may make it more difficult to finance one in the future. On the other hand, reaffirming the debt and making timely payments will help you reestablish your credit going forward.
Missouri Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Springfield
Missouri Means Test
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
We previously discussed some of the bankruptcy forms. We want to emphasize the importance of carefully reading every question in the Statement of Financial Affairs. One of the most difficult sections deals with money you may have repaid to friends or relatives within 2 years prior to filing bankruptcy. Treating family or friends preferentially can be a problem. For example, consider the case in which your mother loans you $20,000 a year before filing bankruptcy. You pay her back, but don’t pay credit cards with equal care. The trustee can go to mom and demand the money back. Another example is that you paid one credit card in full that had a balance of $1,000. You did it during the preceding 90 days, while making minimum or no payments to other cards. This is a preference, and can present a problem.
Each state has its own set of bankruptcy exemptions. If you have been a resident of Missouri for the majority of the preceding 180 days you are qualified to file in Missouri. However, if you have lived in Missouri for less than two years you may not be able to use Missouri bankruptcy exemptions. You may have to use the exemptions of your prior state of residence, or the federal exemptions. Many states require you to still be a resident in order to use their available exemptions.exemptions. In that case you would have to use the federal exemptions.