When bills become unpayable, people often consider filing for bankruptcy. You can get a fresh start and relieve some of your financial stress by filing for bankruptcy in Missouri. However, before taking any action, you should understand the process and what to expect. This blog post will provide an overview of how to file for bankruptcy in Missouri and everything you need to know to make the best decision for you. Keep reading to learn more!
What Is Bankruptcy?
Bankruptcy offers relief to individuals and businesses who cannot pay their debts. In bankruptcy, an automatic stay prevents creditors from collecting from you, at least temporarily, so that you can work out a payment plan with them.
Signs that You May Need to File for Bankruptcy
The decision to file for bankruptcy isn’t right for everyone, so it is important to know this before making the decision.
Here are some signs that you may need to file for bankruptcy:
- You’re having a hard time catching up with your mortgage payments.
- Your creditors aren’t willing to work out a payment plan with you.
- You’re paying your basic living expenses with your credit cards.
- Debt collectors are calling you, or your house is being foreclosed on.
Is Bankruptcy the Only Option?
It’s key to explore all your options before considering bankruptcy. Alternatives to bankruptcy may include debt settlement or credit counseling. An advisor can assist you in determining the best option for you.
By consolidating your debt, you can reduce your payments. This will save you money on interest and help you repay your debt more quickly. It is also possible to negotiate directly with your creditors. You’ll avoid bankruptcy if you can reach an agreement.
The Types of Bankruptcy for Individuals
There are two main types of bankruptcies for individuals available in Missouri: Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy tends to be considered first because it only takes a few months and requires no payments to creditors. Furthermore, it is a good option for those with minimal living and working needs so as not to lose unnecessary luxury items. However, a Chapter 7 bankruptcy won’t allow you to catch up on mortgage or car payments.
Chapter 13
Chapter 13 filers, on the other hand, are given three to five years to repay their debts. There are many variations between Chapter 13 and Chapter 7. As an example, you can avoid foreclosure and repossession of your car while keeping all your property. You can also negotiate a payment plan with your creditor if your debt cannot be discharged in bankruptcy.
How to File for Bankruptcy in Missouri
There are people who avoid bankruptcy because they are worried they will not be able to afford a lawyer. Bankruptcy attorneys are expensive and the most costly part of filing for bankruptcy in Missouri. The great news is that you do not need an attorney to file for bankruptcy on your own.
Below are the steps to do so.
- Gather Your Missouri Bankruptcy Documents: Make sure you have copies of your tax returns from the past two years and your last 60-day pay stubs.
- Take a Credit Counseling Course: Learn more about the credit counseling course here.
- Fill Out the Bankruptcy Forms: The forms are available free of charge at USCOURTS.gov.
- Pay Your Filing Fee: Chapter 7 bankruptcy requires a court filing fee of $338. If your income does not exceed 150% of the poverty guidelines in Missouri, you can request a fee waiver.
- Print Your Bankruptcy Forms: Make sure to print all forms on regular, white 8.5″ x 11″ paper using black ink.
- File the Forms With the Missouri Bankruptcy Court: Missouri bankruptcy cases can be filed in three ways:
- If you live in the Eastern District, you can go to the courthouse in St. Louis; if you live in the Western District, you can go to the courthouse in Kansas City.
- If you don’t want to go to court in person, you can mail your paperwork. Depending on where you live, you’ll send it to either the Eastern or Western District’s courthouse.
- The bankruptcy petition can be filed online. Online filing is allowed in both Missouri districts for pro se filers.
- Mail Documents to Your Trustee: You will be assigned a trustee after filing for bankruptcy.
- Take Another Course: Sign up for a debtor education course within 60 days of the 341 meeting.
- Attend Your 341 Meeting: Your creditors can attend this meeting to ask questions.
What Happens After You File for Bankruptcy in Missouri?
Bankruptcy discharges the majority of your unsecured debts, so you won’t be responsible for paying them back. However, bankruptcy cannot discharge some debts, including student loans, child support, and alimony. Depending on your bankruptcy choice, you may also have to give up some assets.
How Does Bankruptcy Affect Your Credit Score?
Bankruptcy will appear on your credit report for seven to ten years after filing. Loans or credit lines may be difficult to obtain as a result.
Rebuilding Your Credit Post Bankruptcy
A bankruptcy does not mean you’ve lost your financial future, as is commonly believed. The following actions can help you rebuild your credit:
- Taking out a small loan.
- Making on-time payments.
- Getting a secured credit card.
- Maintaining a good payment history.
- Regularly checking your credit report for errors.
- Becoming an authorized user on a credit card.
Sell Your House for Cash & Avoid Bankruptcy in Missouri
If you’re considering filing for bankruptcy, the best way to avoid it is by selling your house. At Favor Home Solutions, we buy houses as-is for cash, so you don’t have to worry about making repairs or undergoing the emotional stress that comes with bankruptcy.
Let’s work together to develop a solution that meets your unique needs within your preferred timeframe! Get the cash you need in as little as 14 days and regain your peace of mind. Contact us today to learn more about how we can help you!
