Vermont Bankruptcy Laws: What are the Laws Regarding Bankruptcy in the State of Vermont?
It is not uncommon to find yourself unable to pay your bills. Whether you are a business, a family or an individual when your debts are piling up, and you cannot make payments anymore, an excellent solution is to file for bankruptcy. In Vermont, like all other states in the United States, you can either file for Chapter 7 or Chapter 13 bankruptcy.
So, if you are looking to gain back your financial freedom and file for bankruptcy in Vermont, let us take a look at everything you need to know.
Chapter 7 and Chapter 13 bankruptcy
For residents of Vermont, filing for Chapter 7 is usually the popular choice if you want to get rid of your debts. This way, you can get a fresh start in just a few months, usually three to four, without having to use your money to pay your creditors technically. Your non-exempt assets will be collected by the trustee, who will then liquidate them and use the net proceeds to pay the creditors. Any amount exempted will go to you, the debtor. Some amount will go to the trustee a commission for their services.
People whose income are too high to qualify for Chapter 7 bankruptcy in Vermont or those with a debt that is non-dischargeable in a Chapter 7 filing can file for Chapter 13. Here, you must propose a repayment plan to the creditors, which usually lasts for about four to five years. The debtor will use their future income to pay the debts according to the plan, which means that they need to have a regular income source as well as some disposable income. This is an essential requirement if you plan to file for Chapter 13. Additionally, the total amount paid to creditors must be at least as much as the amount that the creditors would have received if you filed for Chapter 7.
Filing for bankruptcy in Vermont
First, you, the debtor needs to file a petition with the Vermont bankruptcy court. Here, you will be required to submit statements listing income, assets, liabilities, as well as the names and addresses of all your creditors and the amount that they are owed. Once you file your petition, this automatically prevents any action of debt collection against you and your property.
The clerk of the court then notifies the creditors listed that debtor has filed for bankruptcy. In some cases, bankruptcy petitions are filed to allow the debtor to reorganize their finances and come up with a reimbursement plan, which means they have filed for Chapter 13. In other cases, properties of the debtor are liquidated, which means they have filed for Chapter 7. This is usually opted for when the debtor doesn't have enough money to pay off their debts.
Usually, credit counseling from an approved agency is required before you can file your bankruptcy attention. You will have to show proof that you have attended the same. You may need to attend a debt management course before you can receive your discharge as well.
Vermont Bankruptcy Exemption
If you file for a Chapter 7 bankruptcy, Vermont law protects all or a portion of your property from being seized by the trustee or the creditor. If you file for Chapter 13 bankruptcy, you are most likely to be allowed to keep most of your assets and properties.
Mostly, whether you get to keep your property depends on whether it is exempt or not, either following the state of Vermont exemptions or the federal bankruptcy exemption list. You can select which list you would like to apply in your case.