Vermont Bankruptcy

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Summary

If your income is less than 150% of the federal poverty guidelines you can apply to have the fee for filing bankruptcy in Vermont waived. If you are not eligible to do so, you can file your Chapter 7 bankruptcy in Vermont for free by asking the court for permission to pay the fee installments after your case has been filed and you are protected by the automatic stay.

Even in the best of times, things that negatively impact your financial resources can happen without any warning. If a local business is forced to downsize, causing a loss of income for your family, which in turn results in your inability to meet all of your financial obligations, it is not your personal failure. Sometimes life happens and things snowball out of control quicker than anyone thought possible. Unfortunately, personal pride sometimes keeps the regular Vermonter from seeking the same relief that the Bankruptcy Code has provided to some of the richest folks in the country. If you are struggling to make ends meet because most of your paycheck is spent on paying back debt, consider filing a Chapter 7 bankruptcy in Vermont as a possible path forward. The bankruptcy laws were created to protect people who got in over their head without meaning to, protecting their necessities and giving them an opportunity to right the ship and start fresh. Also, remember that you are not letting anyone down if avail yourself of the relief granted by the federal and Vermont bankruptcy laws because sometimes a Vermont bankruptcy is the best option for everyone involved. Just consider the Hermitage Club, whose creditors put it in a Chapter 7 bankruptcy in Vermont.

How to File Bankruptcy in Vermont for Free

If your income is less than 150% of the federal poverty guidelines you can apply to have the fee for filing bankruptcy in Vermont waived. If you are not eligible to do so, you can file your Chapter 7 bankruptcy in Vermont for free by asking the court for permission to pay the fee installments after your case has been filed and you are protected by the automatic stay.


Collect Your Vermont Bankruptcy Documents

Since there is quite a bit of information requested by the bankruptcy forms, it's best to collect certain documents that contain at least some of the information you will need. In fact, making sure you have everything you need should be your first step in preparing for a successful Chapter 7 bankruptcy in Vermont. The forms require you to list all of your debts and provide accurate addresses for each one of your creditors. Your credit report will be a great resource to make sure you are not accidentally leaving out an old debt or use an old address. You can request a report from each one of the three credit reporting agencies for free, once per year. You will also need each paycheck stub you have received in the six months before your Vermont bankruptcy case is filed as well as your most recent federal income tax return. If you are not sure what your average monthly expenses are, pulling a few recent bank account statements will come in helpful when preparing the post-bankruptcy budget everyone filing bankruptcy in Vermont has to provide to the court.

Take Credit Counseling

Everyone filing bankruptcy in Vermont has to have taken a credit counseling class in the preceding six months. If you do not take this class, you are not eligible to be a debtor in bankruptcy. The purpose of this course is to make sure that all Vermonters who consider filing for bankruptcy protection are aware of all debt relief options available to them before doing so. When you are ready to move forward with this step, make sure you choose one of the companies approved to offer the course to folks filing bankruptcy in Vermont. The Office of the United States Trustee, who is responsible for approving each company, maintains a current listing of approved providers on its website. There is a small cost associated with the class, but you should not expect to pay more than $50. Additionally, you do not have to travel to anywhere as you are able to take the course only by phone or online. When you are done, make sure you put your certificate of completion you receive confirming that you complied with this requirement with the rest of the bankruptcy documents you have collected in preparation for filing a Chapter 7 bankruptcy in Vermont.

Complete the Bankruptcy Forms

This part of the process is typically the most tedious in the process of filing bankruptcy in Vermont. It is important to take your time with this, if possible, as your bankruptcy forms will be your only chance to make a first impression on the court and the trustee handling your case. Even though the laws exist to protect you, you have to make sure that you hold up your end of the bargain by carefully and thoroughly completing your bankruptcy forms. If you hire a lawyer for your Chapter 7 bankruptcy in Vermont, they will typically complete the forms for you based on the information and documents you provide to their office. If you can't afford a lawyer, check if you are eligible to use Upsolve for help with filing Chapter 7 in Vermont. All of the forms can be downloaded as a fillable PDF for free. If you plan on handling this on your own, make sure you also download and print page one of this checklist for an easy reference sheet outlining the documents needed for a Chapter 7 bankruptcy in Vermont and this instruction manual with important tips about completing the forms.

Get Your Filing Fee

As previously explained, you can file an application to have the court filing fee for your Chapter 7 bankruptcy in Vermont waived if your household income is less than 150% of the federal poverty guidelines. However, this application will only be granted if the court determines that you have sufficient income to pay the fee in installments after filing bankruptcy in Vermont. If you are not eligible for a waiver, then, if at all possible, wait to file your case until you've had the chance to save up the full $335 fee. While the court does allow folks filing bankruptcy in Vermont to apply for permission to pay the fee in installments, you risk having your case thrown out if you're unable to make all the payments on time. It makes sense to do this if the garnishment is the reason you are unable to save up enough for the court filing fee because that has to stop once your Chapter 7 bankruptcy in Vermont has been filed. In other words, if your paychecks are not getting garnished at the time, then filing Chapter 7 in Vermont will not make it any easier to save up the court filing fee. That's why it typically only makes sense to pay the fee in installments if you can't wait to file your Vermont bankruptcy case because of a scheduled foreclosure or other legal action.

Although lawyers who assist people filing bankruptcy in Vermont are required to submit all of the paperwork through the court's online filing system, folks who are representing themselves have to provide everything to the court in paper. If you are working with Upsolve, we will send you a single PDF file you can print as-is from any available printer. Even though filing bankruptcy in Vermont is a legal proceeding all forms are printed on regular 8.5" x 11" paper and not on the larger legal-sized paper. If you completed all the forms on your own, then it will take just a little bit longer to make sure you have everything, as you probably have all of the different forms saved as individual files on your computer. In that case, the checklist mentioned earlier that provides a complete list of all documents needed to file a Chapter 7 bankruptcy in Vermont will be helpful yet again. Since it is a good idea to have an exact copy of everything you are submitting to the court for your Vermont bankruptcy in your own records, it is recommended that you print (or make) a second copy. Although the set you are bringing to the court for filing your case cannot be printed double-sided, there is no issue with saving some paper by printing your own copy that way.

Go to Court to File Your Forms

Although the Vermont Bankruptcy Court has locations in both Burlington and Rutland, you can only file paperwork at the Burlington location. If it is a hardship to travel there to file your Chapter 7 bankruptcy in Vermont, you can also submit all of the paperwork and the court filing fee (as long as it is in the form of a money order or cashier's check) by mail. If it is not a hardship to make the trip, then filing your Vermont bankruptcy in person is the recommended filing method as it gives you the opportunity to fix any errors or omissions right then and there and file the case without unnecessary delays. If you bring your own copy of the documents with you when you to go the court to file Chapter 7 bankruptcy in Vermont, the clerk can stamp it with all the important case information at the end. Since bankruptcy is a federal matter, remember that you will be entering a federal building and be prepared to pass through security on your way in.

Mail Documents to Your Trustee

Once your Chapter 7 bankruptcy in Vermont has been filed, a trustee will be assigned by the court to administer the case. The trustee's job is to make sure that your unsecured creditors get what they are supposed to get pursuant to Vermont bankruptcy laws and procedure. As part of their due diligence, the trustees not only review the documents the debtor filed with the court, but also certain supporting documents. The Bankruptcy Code obligates every person filing bankruptcy in Vermont to send a copy of their most recent income tax return to the trustee at least 7 days before their 341 meeting. In addition to making sure that you comply with this requirement, also keep an eye on your mail as the trustee assigned to your Chapter 7 bankruptcy in Vermont may send you a letter requesting additional information in preparation for your 341 meeting. Some documents commonly requested are recent paycheck stubs, bank statements, vehicle titles and mortgage documents. Although the trustee does not represent you, have to comply with all reasonable requests and generally cooperate with the trustee.

Take Bankruptcy Course 2

Even though you completed the credit counseling course before your Vermont bankruptcy case was filed, you are not actually eligible to have your discharge entered yet. The discharge is the court order that forbids your creditors from ever trying to collect on you pre-petition obligations again. Basically, it is the main reason people file a Chapter 7 bankruptcy in Vermont. In order to be eligible to have your discharge entered, you have to complete bankruptcy course 2. Every person filing bankruptcy in Vermont has to take this course, ideally within 60 - 90 days after their case is first filed. As before, it is important to take this course from a company that has been approved to offer it to folks filing bankruptcy in Vermont. When you are done, remember to find out whether they will file your certificate of completion with the court for you. If not, make sure to keep track of the certificate so you can complete this certification and file it with the court instead. This will let the judge know that you have complied with this requirement and are ready to have a discharge entered in your Chapter 7 bankruptcy in Vermont when the time comes.

Attend Your 341 Meeting

The 341 meeting tends to be the scariest part of filing bankruptcy in Vermont even though most folks are surprised by easy it was once they are done with theirs. It takes place about 20 - 40 days after your Chapter 7 bankruptcy in Vermont has been filed, though you will find out the exact day and time for your 341 meeting within a few days of filing your case. Take advantage of the early notice to make sure that you take the time off and arrange for childcare, if necessary. Even though the 341 meeting is sometimes referred to as the "meeting of creditors" or the "creditors' meeting" it is pretty unusual for a creditor to show up. In most cases, the person who filed Chapter 7 bankruptcy in Vermont simply meets with their trustee and, after being placed under oath, answers the trustee's questions about their case. It usually lasts less than 10 minutes and it's easy enough to prepare just a little bit by reviewing all of your bankruptcy forms one more time before your meeting. The one thing that trips up folks filing bankruptcy in Vermont most often is that they forget to bring their IDs. Before the trustee can conduct your meeting, they have to verify your identity by checking your government issued picture ID and acceptable proof of your social security number, so you make sure you have yours with you before you head to your meeting.

Dealing with Your Car

Your car will play two distinct roles in your Chapter 7 bankruptcy in Vermont. First, it is an asset you own and therefore must be listed on your schedule of property and claimed as exempt to the extent possible. Additionally, if you are still paying on your car loan, the car serves as collateral for secured debt. Outside of the bankruptcy context, this means that if you stop making payment the car is repossessed and you get billed for any balance left on the loan after the vehicle is sold at auction. While filing Chapter 7 in Vermont is not a path to get out of paying for your car, it does give you the option to surrender the vehicle without having to worry about getting billed for a deficiency balance, no matter how much the loan amount exceeds the value of the vehicle. Of course, if you want to keep the vehicle you have a few options as well. The most common way folks accomplish this is by entering into a reaffirmation agreement with the creditor holding the loan. This allows you to keep everything basically the same as it was before filing bankruptcy in Vermont. However, if you are struggling to make your payment every month be very careful about reaffirming your car loan, as it has the effect of pulling the loan out of the pool of debts to be discharged, meaning you are once again personally responsible for the full loan balance.

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Vermont Bankruptcy Means Test

The Vermont means test for bankruptcy is the eligibility analysis that makes sure that only folks who truly cannot afford to pay even a portion of their debts are able to file a Chapter 7 bankruptcy in Vermont. The first part checks whether you exceed the income limits as determined by the median household income for a household of your size. However, even if you "fail" this part of the Vermont means test for bankruptcy (because you make too much money) you may still qualify to file a Chapter 7 if deducting certain pre-determined expenses from your income makes it clear that you do not have enough money remaining to pay at least a portion of your debts.

Data on Median income levels for Vermont

Vermont Median Income Standards for Means Test for Cases Filed On or After May 1, 2019
Household SizeMonthly IncomeAnnual Income
1$4,299.67$51,596.00
2$5,904.00$70,848.00
3$6,644.50$79,734.00
4$7,368.58$88,423.00
5$8,118.58$97,423.00
6$8,868.58$106,423.00
7$9,618.58$115,423.00
8$10,368.58$124,423.00
9$11,118.58$133,423.00
10$11,868.58$142,423.00

Data on Poverty levels for Vermont

Vermont Fee Waiver Eligibility for Cases Filed On or After May 1, 2019
Eligible for fee waiver when under 150% the poverty level.
Household SizeState Poverty LevelFee Waiver Limit (150% PL)
1$1,040.83$1,561.25
2$1,409.17$2,113.75
3$1,777.50$2,666.25
4$2,145.83$3,218.75
5$2,514.17$3,771.25
6$2,882.50$4,323.75
7$3,250.83$4,876.25
8$3,619.17$5,428.75
9$3,987.50$5,981.25
10$4,355.83$6,533.75
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Vermont Bankruptcy Forms

The Vermont bankruptcy forms have been created by the court in the district for use in Vermont bankruptcy cases. They supplement the official national forms that are in use across the country. When your Chapter 7 is first filed, you only need one of the Vermont bankruptcy forms, Form B of the Local Forms which serves as a cover sheet for submitting your paycheck stubs to the court. All Vermont bankruptcy forms are available for free on the court's website.

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District of Vermont Requirements

After your Vermont bankruptcy case has been filed with the court, it is your duty to keep the court and all interested parties updated if your address or contact information changes by timely filing Local Form M. If you are filing your Chapter 7 bankruptcy in Vermont without a lawyer ("pro se") make sure to check out this comprehensive guide outlining all requirements for individuals filing a Vermont bankruptcy case on their own.

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Vermont Bankruptcy Exemptions

The laws that determine which property your trustee is able to sell as part of your Chapter 7 bankruptcy in Vermont, if any, are sometimes referred to as the Chapter 7 bankruptcy exemptions, although they are used in identical fashion across all chapters of bankruptcy. There are federal bankruptcy exemptions and state-specific bankruptcy exemptions. As long as you have lived in the Green Mountain State for at least two years when your Vermont bankruptcy case is filed, you are able to choose between the federal bankruptcy exemptions or the Vermont bankruptcy exemptions, depending on which scheme best protects your assets.

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Vermont Bankruptcy Lawyer Cost

If you are thinking about hiring a lawyer to help you with your Chapter 7 bankruptcy in Vermont, it is best to set up a few free consultations with bankruptcy lawyers in your area. The average cost of a bankruptcy lawyer in the Green Mountain State is around $1,150, though the relative complexity of your financial situation will determine how much a lawyer will charge for your Vermont bankruptcy case.

  • Attorney cost estimate: $1,100 – $1,200

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Vermont legal aid organizations provide free legal services to low-income Vermonters. You can find out more about legal aid in Vermont for bankruptcy matters on Vermont's Legal Help Website. If you are not comfortable filing a Chapter 7 bankruptcy in Vermont without the assistance of a lawyer, reach out to one of the organizations listed below, to find out if you are eligible for free legal assistance.

Legal Services Law Line of Vermont, Inc.
(802) 863-7153
274 North Winooski Avenue, Burlington, VT 05401

Upsolve
Nationwide Service (NYC Office)

Upsolve Location
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Vermont Court Locations

Federal Building
844-644-7459
11 Elmwood Avenue Burlington, VT 05401

Federal Building
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Vermont Judges

Vermont Bankruptcy Judges
DistrictJudge Name
District of VermontHon. Colleen A. Brown
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Vermont Trustees

Vermont Trustees
TrusteeContact Info
Raymond J. Obuchowskiray@oeblaw.com
(802) 234-6244
Douglas J. Wolinskydwolinsky@ppelaw.com
(802)864-0880
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