Bankruptcy in Vermont
If you file bankruptcy in Vermont, you can likely keep many or all of your assets, including, but not limited to, 1 cow, 10 sheep, 10 chickens, and 3 swarms of bees. 500 gallons of oil, 5 tons of coal or 10 cords of firewood are also on the list.
20 gallons of maple syrup and your fishing boat on Lake Champlain aren't listed, but they surely should be! They could be covered under the "wild card" exemption.
In 2011, 1,127 Vermont residents filed bankruptcy. If you are wondering whether bankruptcy is the right path for you, consider this article. We'll show you how Vermont bankruptcy law differs from the laws other states; discuss the differences between Chapter 7 and Chapter 13 bankruptcy; help you to find and select a bankruptcy lawyer; and get you prepared to work with a bankruptcy attorney.
How Vermont Bankruptcy Law Differs from the Laws of Other States
In Vermont, you get to choose between federal and state bankruptcy exemptions. Consult with a qualified bankruptcy lawyer to determine which set of exemptions protects the most for you.
It's likely the state exemptions will be the more generous, especially if you own your own home. For example, in Vermont you can protect:
- $75,000 of home equity
- $2,500 of motor vehicle equity
- Personal and household belongings up to varying limits
These are the exemptions for an individual filing bankruptcy; a married couple, filing jointly, can double these exemption amounts.
It is a rare case the bankruptcy filers lose their assets.
Your Choices in Filing Bankruptcy in Vermont: Chapter 7 or Chapter 13
Those exemptions we just discussed determine the assets you can keep during Chapter 7 and the amount of debt you have to repay under Chapter 13 bankruptcies. When you file for bankruptcy protection, you need to let the bankruptcy court know which chapter you're filing under.
Though it's imperative to consult with a bankruptcy lawyer who will provide expert legal advice regarding your individual situation, we will provide some generalities, educational information.
- Chapter 7 is known as a "liquidation" bankruptcy because, in theory, assets are liquidated to pay debts. Many "non-secured" debts are discharged.
You must meet the "means test" to qualify and it takes about 6 months for a Chapter 7 bankruptcy to be discharged.
There is more than one path to filing Chapter 7. Get good legal advice before you disqualify yourself.
- Chapter 13 is known as a "reorganization" bankruptcy because debts are renegotiated and reorganized (with some being discharged). Debts are repaid over a three to five year period.
How to Find and Select a Bankruptcy Attorney
You can narrow down your search from all attorneys to those who focus on bankruptcy law and are licensed in Vermont. Try entering "Find a Vermont Bankruptcy Attorney" into your Internet search engine. Some bankruptcy lawyers may list themselves with local bar associations as well.
If any of these attorneys match up with referrals received from loved ones or professional advisors, all the better.
Most bankruptcy attorneys will offer a free, no obligation consultation or phone interview so you can determine whether that attorney is a good fit for you.
How to Prepare to Work with a Bankruptcy Attorney
First, read up on bankruptcy law so you can make good decisions and ask good questions.
Next, paperwork, paperwork, paperwork. Gather and organize your bills, debts, expenses, assets, and payments already made. You will be asked to fill out lengthy forms; these are necessary and will go a long way in protecting your assets.
Lastly, you may want to make a list of questions and be sure to ask your bankruptcy lawyer about protecting your lifetime supply of Ben and Jerry's ice cream.