Information on Filing Bankruptcy in Vermont
The procedures for filing bankruptcy in Vermont, from qualifying for bankruptcy to filing a petition, follow federal standards. However, as a Vermont resident you must use Vermont-specific data to complete your bankruptcy petition. As bankruptcy data varies from state to state, you may be able to qualify for bankruptcy in Vermont when you could not qualify in another state, and you may be able to keep assets that you could not keep in another state.
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Chapters of Bankruptcy
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As in all states, as an individual debtor in Vermont you have two primary choices for personal bankruptcy, Chapter 7 and Chapter 13. Chapter 7 provides for the liquidation of your non-exempt assets for distribution to creditors, while Chapter 13 requires monthly payments to the court but no asset sales.
Vermont Bankruptcy Qualification
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Many debtors who file Chapter 7 bankruptcy have no non-exempt assets to sell, and thus there is no distribution at all to the creditors. As a result, the courts have implemented a means test that you must pass if you wish to qualify for Chapter 7 bankruptcy. As of November 1, 2010, you could qualify to file Chapter 7 in Vermont as a single filer if your annual income was below $42,347. This figure represented the median annual income for a one-person household at that time, and is updated regularly. As long as your annual income is less than the median in Vermont for a household of your size, you can qualify for Chapter 7 bankruptcy. If not, you can still qualify if your net disposable income is low enough by subtracting reasonable expenses as determined by the Internal Revenue Service in categories such as food, housing and utilities. If your income is too high you must file Chapter 13 if you are to file at all.
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Vermont Bankruptcy Exemptions
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As you do not have to make any payments to your creditors under a Chapter 7 bankruptcy, your assets are at risk. The State of Vermont lets you keep a certain amount of assets so that you have something to build a financial foundation on after you emerge from bankruptcy. Divided into eight categories, these exemptions can protect everything from your homestead to your personal property. While some categories such as state employee pensions are exempted to an unlimited amount, others have specific dollar amounts that are updated regularly. If you file Chapter 13 bankruptcy in Vermont, all of your assets are protected and you do not have to exempt them.
Vermont Bankruptcy Districts
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While most states have multiple bankruptcy districts, Vermont only has one, the Vermont Bankruptcy District Court. This court has jurisdiction over all counties in Vermont and has courthouses in Montpelier and Rutland. As a Vermont resident, you must file your bankruptcy petition in a Vermont bankruptcy court.(see Resources).
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