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Is There A Limit To How Much Debt I Can Get Discharged In A St. Louis Bankruptcy?

There are certain limitations, but it depends largely on what type of Missouri bankruptcy you wish to file. The two main options are a St. Louis Chapter 7 bankruptcy and a St. Louis Chapter 13 bankruptcy. These chapters have substantive differences in how debt is handled (or whether you would even qualify for one). But the debt limits proscribed by the Bankruptcy Code are very clear.

When you file a Missouri Chapter 7, there are no limitations as to the amount of unsecured debt to be discharged. A Chapter 7 gets rid of these kinds of debts forever, such as credit cards, medical bills, payday loans, deficiencies from a car repossession, gym memberships, and even magazine subscriptions. Once the debts are knocked out, you can immediately begin to rebuild your credit rating as you move forward with life. So if the amount of unsecured debt you are currently carrying is $30,000, or $300,000, or even $3,000,000, it’s all going to get discharged.

There are, however, debt limits in a Missouri Chapter 13. A Chapter 13 is described as a repayment plan over the course of three to five years during which certain debts are paid back. Primary examples of the kinds of things to be paid back would be mortgage arrearage, car loans, tax debt, back child support, attorney fees, and sometimes a percentage of your unsecured debts. If the amount of unsecured debt is above $336,900, then you will not qualify for a Chapter 13. Or if your secured debts (like house mortgage or car note) are above $1,010,650, you again will not qualify under this chapter of bankruptcy. In this kind of situation, you may wish to consider a Chapter 11 bankruptcy (which is described as a reorganization).

One scenario to watch out for would be the following: You need to file for bankruptcy because of creditors suing you, garnishing your wages, levying your bank account (or any number of the lovely things that creditors and collection agencies do). But you have previously filed a Chapter 7 five years ago. The bankruptcy rules state that you can only file a new Chapter 7 every eight years (so if you filed one five years ago, you would obviously need to wait another three years before you qualify again). At this point, you look at the possibility of a Chapter 13. But as it turns out, you have in excess of $400,000 of unsecured debt. As mentioned above, this level of debt disqualifies you for a Chapter 13 bankruptcy. So now the only real option you have is a Chapter 11 Reorganization.

The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been assisting clients for years to make sure that their interests are kept safe. Our basic philosophy is driven by the idea that you each individual should expect that his or her attorney will know the law inside and out, will guide the person through the entire process from start to finish, and will ensure that each client is put squarely on the road towards financial freedom. All office consultations and phone conversations are free of charge.

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