Written by Attorney Jacquelyne N. Mosley-Pastrana.
Updated July 28, 2020
Did you know that George McGovern, former South Dakota Senator, and once presidential candidate filed for bankruptcy after his investment in a hotel didn’t do well. He later spoke about laws that make it difficult for small businesses to operate. McGovern credited the bankruptcy experience with making him a more understanding presidential candidate. He didn’t become president but later headed a nonprofit organization and went on to write a bestseller. Just like many, McGovern had misconceptions about filing bankruptcy. You may think bankruptcy is for the other guy and not for you, but severe financial times can hit anyone. After carefully reviewing your options, you can decide whether filing Chapter 7 bankruptcy in Sioux Falls is right for you.
Bankruptcy was created for honest citizens to recover from the financial turmoil whether that’s been brewing for a while or appeared in an instant. Often people wait as the ripple effect of debt consumes their lives, but some decide to file a Sioux Falls bankruptcy. Most in South Dakota file either a Chapter 7 or Chapter 13 bankruptcy. Under Chapter 7 bankruptcy, debt is discharged or wiped out in about 4 - 6 months for those with limited income who genuinely can't afford to pay off their debt. Most people filing Chapter 7 keep all the property they own.
Most debts are dischargeable, such as credit card debt, utility bills, medical bills, and personal loans. Dischargeable debts can be wiped away with your Chapter 7 bankruptcy in Sioux Falls. Some liabilities, known as non-dischargeable debts, aren't wiped away. Non-dischargeable debts include student loans, government loans, government fines, restitution, child support, and alimony payments. Many people still file bankruptcy when they have a combination of dischargeable and non-dischargeable debts. Those that file bankruptcy with non-dischargeable debt, often do so because they find that they can pay them after wiping away the dischargeable debts.
Filing Chapter 13 bankruptcy creates a 36 - 60 payment plan to pay down debt; it can also be used to pay off non-dischargeable priority debts. It’s usually filed when a person has more expensive property than they would be able to keep under Chapter 7 bankruptcy. Many people hesitate to file bankruptcy in South Dakota because they can't afford a lawyer. You have many avenues for free legal help to file your Sioux Falls bankruptcy yourself. You can get free Legal Help at East River Legal Services where you can apply online or call 605-336-6919. Dakota Plains Legal Services also offers legal assistance to low-income residents of South Dakota. You can call the Sioux Falls Office at 605-301-8086. You can also apply online or call 1-855-287-3510 to reach the State Bar of South Dakota Access to Justice Program to apply for a free lawyer. The American Bar Association has an online program that provides answers to your bankruptcy legal questions about your case. You can also apply for legal help online to reach multiple legal nonprofit agencies through SD Law Help. Upsolve is also a great resource to get information and if you qualify even help with filing your Sioux Falls bankruptcy.
Sioux Falls Bankruptcy Lawyers - Estimated Cost
When filing bankruptcy in Sioux Falls, some people want to hire a lawyer because a competent lawyer is a good investment, especially if you're facing complicated issues. Some issues include passing the Chapter 7 bankruptcy means test or selling or transferring property. Some seek counsel for advice about dischargeable and non-dischargeable debt. A Sioux Falls bankruptcy lawyer cost is between $1,100-$1,200 to help with Chapter 7 bankruptcy. This amount doesn't include the filing fees or other court fees and can vary depending on the specifics of your case. Many bankruptcy attorneys in Sioux Falls offer free consultations. During a consultation, the bankruptcy lawyer will want to look over your situation and give you feedback about how he or she might help you. In this meeting, you should also get to know how the lawyer works. You can ask questions about experience, fees, or potential problem spots in your bankruptcy. Also, remember you don't need to speak to just one attorney, you can meet with a couple before making your decision. If you can't afford an attorney to help you with your Sioux Falls bankruptcy, remember you can find free help. The steps below can guide you.
How to File Bankruptcy in Sioux Falls, South Dakota for Free
You can file a Chapter 7 bankruptcy in Sioux Falls for free, and this step-by-step can help. It provides direction from collecting your documents to attending your 341 Meeting and dealing with your car as part of your South Dakota bankruptcy case.
Collect Your Sioux Falls Bankruptcy Documents
You'll need to prepare for your Sioux Falls bankruptcy. The first step you'll take is getting all your documents related to what you make, what you owe, and what you own. This will help you get a full picture of how you're doing financially.
Some income documents that you'll want to collect will be your pay stubs, taxes, and W-2s. Your employer in Sioux Falls can give you the previous 2 months worth of your pay stubs if you reach out to Human Resources. You can get your most recent 2 years of taxes from your tax preparer or the IRS. Obtain copies of your credit report from all three agencies to compare your debts. You can get one free copy of your credit report once per year. Review the credit reports for your creditors, their addresses, and the amounts that you owe. It's also a good idea to get the amounts and names of creditors you don't see on the report such as any court judgments. You also want a copy of your vehicle registration and property information. Copies of your financial account statements from banks, retirements, or investments are needed too. These documents will help you complete your Sioux Falls bankruptcy forms.
Take Credit Counseling
Anyone filing bankruptcy in Sioux Falls is required to take a credit counseling course. In the course you'll participate in activities such as creating a budget and analyzing your expenses from most to least important. You may already know this information, but it's a standard requirement that everyone filing bankruptcy in South Dakota must fulfill. The design of the class gives each person the chance to explore their options for dealing with debt. Afterward, you'll get a certificate to prove you completed this class.
To check this requirement off your list, take an approved credit counseling course. There is no in-person class within 2 hours driving from Sioux Falls, but you can take the class by phone or online. When you complete the course, you'll receive a certificate of completion valid for 6-months. You're required to file the certificate with your Sioux Falls bankruptcy forms.
Complete the Bankruptcy Forms
The forms are the meat of your bankruptcy. Your bankruptcy documents will come in handy here. You can find the forms you need on the Federal Bankruptcy Court website and use the instruction manual. You can get a more specific list of forms with explanations about how to complete each form from the Upsolve’s South Dakota page. Filling out your bankruptcy forms can be repetitive and tedious. Remember other folks in South Dakota just like you have done it by candidly filling in the information. When filing bankruptcy in Sioux Falls, some use electronic bankruptcy software to help, but most don't. With or without bankruptcy software, you'll need to provide the Court with in-depth information about your finances. Everyone in South Dakota filing bankruptcy completes these forms, and so can you by powering through it.
Get Your Filing Fee
Taking care of your filing fee is an essential step of ensuring you've got a successful Sioux Falls bankruptcy. It costs $335 for the Chapter 7 filing fee and $310 for the Chapter 13 fee. You can pay the fee with cash, money order, or cashier's check in the exact amount. If you are in a particular circumstance, such that you fall at or under 150% of the federal poverty guidelines, you may qualify for a fee waiver. To apply, you submit your fee waiver application to the Court with your Sioux Falls bankruptcy petition. The Court will review your Sioux Falls bankruptcy paperwork to determine whether you can afford to pay the fee after filing your case. If you are in financial need but require more time to pay the filing fee, you can apply for installment payments. Stepping into court with your payment or applications in hand will help you file bankruptcy in Sioux Falls more smoothly.
Print Your Bankruptcy Forms
You'll print out your Sioux Falls bankruptcy forms after you've completed your bankruptcy forms and decided how to pay your filing fee. Many use the Court’s list of required forms to keep track of what they’re printing. Legal forms, such as your Sioux Falls bankruptcy forms, Schedules, Statements, and supporting documents, will be printed one-sided. If you need, you can print these forms at the Sioux Falls public library for 10 cents a page. You can also bring your flash drive and shop local at a spot like Minuteman Press. Keep in mind that you'll print over 70 pages one-sided. When you sign your bankruptcy forms, you're promising that what you've written is true. So it's vital that you carefully review each page of your Sioux Falls bankruptcy forms. You’ll include your phone number under your name on the Voluntary Petition form as required when filing your bankruptcy case. You only need to file one original of your Sioux Falls bankruptcy, and you may want to make a copy for yourself as well.
Go to Court to File Your Forms
You’ll take your original Sioux Falls bankruptcy petition with your credit counseling certificate and filing fee or special applications to the courthouse. Reviewing the requirements checklist ensures you've submitted the documents that are due. One of the two South Dakota Bankruptcy Court locations is in Sioux Falls at 400 South Phillips Avenue, Room 104, Sioux Falls, SD 57104-6851. Residents of Sioux Falls and Minnehaha County file their South Dakota bankruptcies here in person or by mail. You can drive or take the Sioux Area Metro to the courthouse, as downtown busses including the 3, 5, and 8 run during the week. You can visit the courthouse during its business hours on weekdays, except for federal holidays.
Filing your South Dakota bankruptcy in person has the advantage that the staff at the Clerk's office in room 104 review your filing. The benefit is that you can correct issues that would prevent your case from getting processed then and there before submitting your Sioux Falls bankruptcy filing. Once you file your case, you’ll get your case number, Trustee information, and 341 Meeting date and time.
Mail Documents to Your Trustee
After filing bankruptcy in Sioux Falls, the Court assigns your case number, the Trustee, and the date and time for your 341 Meeting. The Trustee will manage your case and review your Sioux Falls bankruptcy to confirm whether there are assets to pay your creditors. Once you receive the contact information of the Trustee, it saves time to send the most recent two years of taxes. This way, it can be obtained at least a week before your 341 Meeting. You'll send any documents about your Sioux Falls bankruptcy directly to your Trustee and not to the Court.
Your creditors get notice of your Chapter 7 bankruptcy case through Form 309A. When they receive the notification, they must stop contacting you, and typically creditors neither object nor go to the 341 Meeting. You will also get your own Form 309A with the information about your 341 Meeting. If you receive another Form 309A as return mail addressed to one of your creditors, you'll need to take immediate action. Form 309A returned as undeliverable indicates the creditor address you listed in your creditor matrix needs to be updated. Make a reasonable effort to ensure your creditors are informed about you filing Chapter 7 bankruptcy in Sioux Falls.
Take Bankruptcy Course 2
After filing bankruptcy in Sioux Falls, you are required to take a second bankruptcy course to get your bankruptcy discharge. A bankruptcy discharge is a Court order that wipes out your eligible debts. You can only get it when you take an approved financial management bankruptcy course, also known as a pre-discharge course after filing bankruptcy. While the first bankruptcy course gave you information to decide whether you want to go forward with bankruptcy, the financial course is about shaping your life after bankruptcy. The financial management course aims to shift your goals toward better credit use, saving money, and goal setting. At this point you've probably been planning this long before you filed for bankruptcy, so you're ready to get it done for your certificate of completion.
You’ll need to pick an approved agency to take the class. While the closest in-person class is two hours away in Wolsey, you can take the pre-discharge course online or by phone. Within 90 minutes you can have your certificate on its way. It's required that you file the certificate at the Bankruptcy Court where you filed your Sioux Falls bankruptcy. The Court should receive it within 60 days of the first date of your 341 Meeting. Piece of cake, right?
Attend your 341 Meeting
Your 341 Meeting is another vital part of getting your bankruptcy discharge. You're required to bring your photo ID and proof of social security number. You should dress presentably, but it's not a good idea to wear anything expensive. Keep in mind that the Trustee has thoroughly reviewed your Sioux Falls bankruptcy information. The Trustee will see not only your clothes, but will look at what you are wearing on your fingers, wrist, and neck. It's the Trustee's job to confirm you disclosed the items you own for a possible payment to creditors. South Dakota has 7 locations for 341 Meetings. Your county determines the location. As part of Minnehaha County, you'll meet at the Sioux Falls Bankruptcy Court. For the specific room, time, and date of your 341 Meeting you can refer to section 7 of your Notice of Filing Chapter 7 bankruptcy. Despite the fact that the 341 Meeting is also a meeting of the creditors, creditors rarely come because most Chapter 7 cases have no assets to distribute. The meeting will be short with the Trustee asking you standard questions about your Sioux Falls bankruptcy case. Other South Dakota filers are usually surprised by how quickly the meeting goes by as they truthfully answer each question under oath.
Dealing with Your Car
The Sioux Falls River Greenway has 28 miles of trails, and biking is a great way to get around until the winter. Some drive or take the Sioux Area Metro. An emerging problem in South Dakota is the suspension of drivers licenses and registrations for money owed to the state. You may feel like you've little recourse. Many feel the same way you do. No matter your situation, if you have a car while filing bankruptcy in Sioux Falls, you will make decisions about your vehicle. Whatever you decide to do with the property where you have loan with a lender, you’ll need to inform the Court of your intention within 30 days of filing your bankruptcy. It’s helpful to keep in mind that many qualify for an auto loan later down the line after filing their South Dakota bankruptcy.
The upside is that if you own your car, you can likely use the wildcard exemption to keep it through your Sioux falls bankruptcy. Exemptions protect the amount of property you can keep during bankruptcy. On the other hand, if you have an auto loan, you can buy out the loan, continue the loan, or give back the car.
During a buyout or redemption, you negotiate to pay a lump sum. The lump-sum is based on the vehicle's value. The downside is many don't have the cash on hand to buy out the car. Instead, some decide to take out a high-interest loan through a redemption lender that won't be wiped out during their Sioux Falls bankruptcy.
If affordable, some decide to continue a loan with the lender and reaffirm. Reaffirmation is when you keep paying the car payments and sign another loan with the lender promising to pay it throughout your Sioux Falls bankruptcy. A judge will decide whether to approve your reaffirmation agreement based on your needs. The downside to reaffirmation is that you are reinstating your liability for the debt. Plus, with a missed payment, the car could be repossessed, and the lender can sue you for money owed.
Many decide to give back the car, and it allows the debt to be wiped out during their Sioux Falls bankruptcy. Some choose to surrender or give the car back when they realize they owe more than the value of the car or because it's simply not affordable. The lender will collect the car, and you would be relieved of the debt and get a fresh start. Keep in mind that with a new beginning, it isn't out of the question that you’ll one day ride a chopper in the Sturgis Motorcycle Rally down the line.
South Dakota Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Sioux Falls
South Dakota Means Test
Chapter 7 bankruptcy in Sioux Falls, is reserved for people with limited income who genuinely can't afford to pay their debts. The South Dakota bankruptcy Means Test was created for filers to qualify by calculating yearly income or income after expenses, thereby showing that Chapter 7 relief is proper in their situation.
Median Income Levels for South Dakota
South Dakota Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for South Dakota
South Dakota 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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South Dakota Bankruptcy Forms
When filing bankruptcy in Sioux Falls, you’ll complete the South Dakota bankruptcy forms and the necessary local forms. For example, make sure to follow the instructions in Appendix 1F of the local rules when creating the required creditor matrix.
South Dakota Exemptions
Individuals filing bankruptcy in Sioux Falls can use South Dakota bankruptcy exemptions to keep the value of the things they own up to a certain amount. The state allows residents to choose between federal and state exemptions.