Bankruptcy in South Dakota
Of course you know that South Dakota is home to the legendary Mt. Rushmore, but did you know:
- Sturgis is home of the annual Black Hills Classic Motorcycle Rally?
- Famed children's author, Laura Ingalls Wilder, lived near De Smet?
- A bison, native to SD, can weigh up to 2,000 pounds?
- Clark, SD, is home to the world famous Mashed Potato Wrestling contest.
- 1,844 South Dakota residents filed bankruptcy in 2011.
If you're a South Dakota resident, considering bankruptcy or you are in financial distress, you are not alone and this article is for you. Read on and you'll learn how South Dakota bankruptcy laws are unique, the difference between Chapter 7 and 13 bankruptcies, how to select a bankruptcy lawyer, and how to prepare to work with your lawyer.
How South Dakota Bankruptcy Law Differs from the Laws of Other States
"Exemptions" protect your assets when you file bankruptcy and South Dakota's bankruptcy exemption laws are unique. Exemptions describe the property you can keep.
While you can't use federal bankruptcy exemptions if you live in South Dakota, the state exemptions are much more generous anyway. For example, you can keep your:
- Registered homestead of unlimited value and
- Other assets up to $4,000 (or $8,000 for a married couple, filing jointly).
- Other exemptions apply, including but not limited to, burial plots, church pews, clothing, food, wages, and retirement accounts.
Your Choices in Filing Bankruptcy in South Dakota: Chapter 7 or Chapter 13
92% of the South Dakota residents, who filed bankruptcy in 2011, filed under Chapter 7. The remaining 8% filed under Chapter 13.
Most filers prefer Chapter 7, if they qualify, because many debts are discharged, meaning that they never have to be paid back, and the process only takes 6 months.
- The easiest way to qualify for Chapter 7 is to have income less than the state median income.
- For example, in South Dakota, an individual can make up to $37,961 and a family of four can have an income of up to $71,184.
- On the other hand, while some debts are discharged during Chapter 13, most are reorganized and repaid during a 3 to 5 year payment plan.
Both paths to bankruptcy end creditor harassment and offer you a fresh start.
How to Select a Bankruptcy Attorney
You are likely served best by finding several attorneys and then chatting with each to select the one you most comfortable working with.
To find attorneys, ask for referrals from:
- Friends and family
- Professional advisors
- Local bar association
- Internet search for "Find a South Dakota Bankruptcy Attorney"
How to Prepare to Work with a Bankruptcy Attorney
Gather and organize your financial documents including monthly bills, debts, assets, tax returns, contracts, and repayments made over the last year. Also, jot down any questions and concerns.
You don't need to be a legendary author like South Dakota's Laura Ingalls Wilder, but you do need to chronicle your financial life so your bankruptcy lawyer can provide good advice and file the appropriate papers.