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Bankruptcy in Vermont

Are there any income requirements for filing bankruptcy in Vermont?

There are two different types of bankruptcy proceedings in the State of Vermont.  The first is known as Chapter 13 bankruptcy, and the second is known as Chapter 7 bankruptcy.  There are absolutely no income requirements that apply to your ability to file for Chapter 13 bankruptcy.  All people and businesses which have not filed for bankruptcy in the last six years are eligible to file for Chapter 13 bankruptcy regardless of their income level.  There are income requirements in order to file for Chapter 7 bankruptcy.  This is because, Chapter 7 bankruptcy is designed only for people who are truly unable to pay their debts due to a lack of resources.  For this reason, you will need to prove that your income is below the average income in your area in order to file for Chapter 7 bankruptcy.  A means test will be applied to determine whether or not you meet this requirement.

If I am married, do I have to file with my spouse Vermont?

Married couples in the State of Vermont are not required to file a joint petition in order to seek bankruptcy relief.  However, many married couples will benefit from choosing to file a joint return.  This is especially true for those individuals who share the majority of the household debt.  Be sure to remember that only the matter of legal responsibility matters when determining whether or not a spouse is required to pay back a debt.  Simply because you and your spouse commonly share responsibility for the household debt does not mean that you are both legally responsible for that debt.  In order to be considered legally responsible for your spouse’s debt, you will have had to voluntarily assumed that debt as a co-applicant or co-signer.

What are the property exemption rules in Vermont?

The property exemption rules in the State of Vermont are as follows:

-Homestead exemption of up to $75,000

-Up to $2,500 of equity in one vehicle

-Up to $5,000 in tools of the trade

-One wedding ring

-Up to $500 in other jewelry

-Up to $2,500 in furniture, apparel, and appliances

-Up to $5,000 in crops

-Up to $400 in other personal property plus up to $7,000 of unused exemptions

-Up to $700 in bank account

Will all of my debts be discharged as part of a Chapter 7 bankruptcy in Vermont?

All debts that have not been secured by collateral will be eligible for discharge as part of a Chapter 7 bankruptcy proceeding.  Debts which have been secured will not be discharged under any circumstances.  In order to determine whether your debts are eligible for discharge, you should provide your attorney will a complete and accurate list of all your debts and assets.

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