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Posted by: National Bankruptcy Forum
Missouri was pivotal for launching the settlement of the western United States. The Lewis and Clark expedition began near present day St. Louis, and Missouri was the eastern starting point for the Pony Express, the Oregon Trail, the California Trail, and for many years, the Santa Fe Trail. The 91-acre Jefferson National Expansion Memorial in St. Louis was created to memorialize the movement west, and the Gateway Arch is its best known attraction. The Gateway Arch is the world’s tallest arch at 630 feet high — and the tallest manmade monument in the western hemisphere.
In 2016, Missouri had a per capita personal income (PCPI) of $42,926, which ranked it as the 36th highest PCPI in the country and placed it at 87% of the national average of $49,246. The 2016 PCPI increased 1.3% from the previous year, less than the national average of 1.6% increase.
Missouri’s current-dollar GDP was $300.9 billion in 2016, which ranked it at 22nd in the United States. Its real GDP grew 1.1% from 2015 to 2016, less than the national change of 1.5%. Missouri’s largest industry is finance, insurance, real estate, rental, and leasing, according to the Bureau of Economic Analysis of the U.S. Department of Commerce. The second-largest industry is professional and business services.
More people file bankruptcies in Missouri than in most of the country. Missouri ranked 14th in the nation in the spring of 2017 for number of bankruptcy filings, with 352 people out of 100,000 filing personal bankruptcy yearly. Of course, the ranking and the number of bankruptcies change somewhat from year to year due to changes in regional economies.
In this post, we’ll discuss some basics you need to know if you are planning to file for Chapter 7 bankruptcy, what sort of exemptions you can take in Missouri, and where the bankruptcy courts are located.
The Basics about Chapter 7 Bankruptcy
Although each state has laws governing state exemptions in bankruptcy, bankruptcy is primarily governed by Title 11 of the U.S. Code. Chapter 7 is a liquidation bankruptcy (as opposed to a reorganization). In a Chapter 7 bankruptcy, the bankruptcy trustee can sell the debtor’s non-exempt property in order to help pay their creditors. Chapter 7 is the most common kind of bankruptcy filed by individuals.
The U.S. Bankruptcy Code provides a list of exemptions, but each state can also establish their own list of exemptions. Your exempt property is safe from the bankruptcy trustee, and that’s why determining what property is exempt is so important. In many cases, you can only exempt property in a category up to a certain value. The limits on the value apply to the equity in the property, not the value of the property as a whole.
Filing Bankruptcy in Missouri: Can I keep my house?
Missouri is an opt-out state, which means you cannot choose between federal exemptions that are part of the U.S. Bankruptcy Code and state exemptions. If you file bankruptcy in Missouri, you must use the Missouri exemptions. Bear in mind that if you and your spouse are filing a joint bankruptcy, you can essentially double your exemptions, as each of you can claim the statutory exemption amounts in most cases.
You will want to discuss exemptions in-depth with your Missouri bankruptcy lawyer in order to thoroughly understand all your options. Let’s take a look at some of the commonly used exemptions.
Missouri Bankruptcy ExemptionsThe top 5 exemptions under Missouri state law.
|Type of exemption||Missouri law|
|Homestead||$15,000 in equity in principal place of residence, $5,000 for mobile home. Married couples who own their property as a tenancy in entirety can exempt the full value of the home, as long as they don't have joint debts|
|Personal property||$3,000 in household furnishings and goods, $3,000 in tools of the trade, $1,500 in firearms, $1,500 wedding ring and $500 in other jewelry, plus a $600 wildcard exemption|
|Wages||75%, or 30 times federal minimum wage|
|Pension/retirement||ERISA and government employee benefits, plus retirement exemptions allowed per federal law|
Missouri exemptions allow you up to $15,000 in equity in the house or other real estate where you live. You may take up to $5,000 in a mobile home. Unlike other types of property, if you and your spouse are filing jointly, you may not double the homestead exemption. Mo. Rev. Stat. § § 513.430.1(6), 513.475
However, if a married couple owns real estate as a tenancy by the entirety, the property is owned by a single marital entity rather than two individuals. Property held as tenants by the entirety is completely exempt as long as the couple do not have joint debts. Mo. Rev. Stat. § § 513.475, 513.427
Example: If you bought a $300,000 house in which you have $15,000 in equity, it will not be sold, because your equity is under the exemption amount. However, if the equity in the property is $60,000, the trustee could sell the house to pay your debts, since the exemption is quite a bit less than your equity. If you own the house with your spouse as tenants by the entirety and do not have joint debts, the house is completely exempt, and the equity you have in it is irrelevant regarding exemptions.
There are a number of personal property exemptions in Missouri. They include:
- Household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments up to a value of $3,000. Mo. Rev. Stat. § 513.430.1(1)
- A wedding ring not over $1,500 in value and other jewelry valued at up to $500 total. Mo. Rev. Stat. § 513.430.1(2)
- Any implements or professional books or tools of the trade with a value up to $3,000 total. Mo. Rev. Stat. § 513.430.1(4)
- Professionally prescribed health aids. Mo. Rev. Stat. § 513.430.1(9)
- Firearms, firearm accessories, and ammunition up to $1,500 total value. Mo. Rev. Stat. 513.430.1(12)
- Burial grounds, not to exceed one acre in area or $100 in value. Mo. Rev. Stat. § 214.190
Any motor vehicles, not to exceed $3,000 in value total, are exempt. Mo. Rev. Stat. § 513.430.1(5)
Example: You bought a $20,000 car, but have only paid $3,000 on it. Your car is safe from the bankruptcy trustee because you have not exceeded the $3,000 equity exemption. If you owed more than $3,000, the bankruptcy trustee could take your car.
Your wages are exempt up to 75%, or 30 times the federal minimum hourly wage. Mo. Rev. Stat. § 525.030
Pensions and Retirement
ERISA-qualified benefits needed for support are exempt. Mo. Rev. Stat. § § 87.090, 87.365, 87.485
Government employee benefits, as named in various statutes, also are exempt.
Benefits and awards
The following benefits and awards are exempt in a Chapter 7 bankruptcy in Missouri.
- Veterans benefits. Mo. Rev. Stat. § 513.430.1(10)(b)
- Workers’ compensation. Mo. Rev. Stat. § 287.260
- Unemployment compensation. Mo. Rev. Stat. § § 288,380, 513.430
- Social Security benefits and public assistance. Mo. Rev. Stat. § 513.430.1(10)(a)
- Disability or illness benefits. Mo. Rev. Stat. § 377.090
- Fraternal benefit society benefits to $5,000, bought over six months before filing. 513.430(10)(c)
- Wrongful death awards. Mo. Rev. Stat. § 513.430.1(11)
- Up to $750 per month in support, alimony, or maintenance. Mo. Rev. Stat. § 513.430.1(10)(d)
- Up to $150,000 of life insurance dividends, loan or cash surrender value, and interest, if purchased more than six months prior to filing bankruptcy. Mo. Rev. Stat. § 513.430.1(8)
- Disability or illness benefits. Mo. Rev. Stat. § 513.430.1(10)(c)
- Unmatured life insurance policy and up to $15,000 of any matured life insurance proceeds for burial expenses for designated family members. Mo. Rev. Stat. § 513.430.1(7)
Missouri is one of a few states with a wildcard exemption. Theirs exempts property of any kind valued up to $600 total if it’s not already included in a personal property exemption. Mo. Rev. Stat. § 513.430.1(3)
Additional property up to $1,250 for the head of family plus another $350 in property for each dependent child also is exempt. Mo. Rev. Stat. § 513.440.
Missouri Bankruptcy Court Locations
There may be options short of filing bankruptcy, and the sooner you speak with a Missouri bankruptcy attorney, the more likely it is that you will have other options. However, if you do file for bankruptcy, you will want to speak with your attorney regarding your exemptions and the property you will be able to keep. A good Missouri bankruptcy attorney knows how to protect your assets.
You can file for bankruptcy in either of two districts: