Rhode Island is home to the Newport Tower, the International Tennis Hall of Fame, and… residents with a lot of debt. Rather than spending your days hiding from the seemingly never-ending collection calls, worrying about garnishments and that ever-growing stack of bills, consider filing for a Chapter 7 bankruptcy to take care of the problem.
Don’t Throw Your Phone into the Atlantic Ocean to Avoid Creditors -- File For Bankruptcy, Chapter 7
Also referred to as a liquid or straight bankruptcy, Chapter 7 bankruptcy wipes your debt out of existence and stops garnishments in their tracks. Some of the debts that a Chapter 7 will erase include credit card bills, medical debts, and other lingering bills.
A Chapter 7 bankruptcy will not take care of any of the following debts, meaning that you’ll still be responsible for:
- Student loans
- Recently filed tax debts
- Child Support
- Money owed from ill-gotten gains such as fraud or embezzlement
Check and See if You Qualify, Ocean State Residents
You will need to hire a Rhode Island bankruptcy attorney in order to file. A bankruptcy attorney is trained in all aspects of bankruptcy law, and knows the specifics that apply to the state of Rhoda Island. Your bankruptcy attorney’s job is to help you fill out your Chapter 7 petition and then represent you in front of the judge and bankruptcy trustee, who is appointed by the court to represent your debtors.
The very first thing that your bankruptcy attorney will do is check the income limits for Rhode Island residents, which are as follows:
- Family of 1 - $46,136
- Family of 2 - $58,511
- Family of 3 - $72,184
- Family of 4 - $88,593
- Family bigger than 4 - add $7,500 for each person
If your income falls into within the limits, then you’re fine and can then file for a bankruptcy, Chapter 7. But, if your salary is higher than the Rhode Island income limits, your bankruptcy lawyer can use the means test, which is part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to see if you still qualify for a Chapter 7 Bankruptcy. The means test uses a special mathematical process which evaluates your financial information, including your income, assets and debts to determine your worthiness for bankruptcy. If your debts are determined to be excessive, you will be able to file Chapter 7. If not, you might need to file for a Chapter 13. Your attorney can help you decide what type of bankruptcy is the best for you.
Get Started on your Bankruptcy, Chapter 7 Today
Upon your first meeting with your Rhode Island bankruptcy attorney, there are a number of documents that you’ll need to bring with you. These include:
- A list of your debts. You may also need past statements and other information.
- Your last six month’s worth or paystubs.
- Last year’s filed tax return for you and your spouse
- Deeds and titles for your vehicles and property
- A list of your assets, including things like jewelry, furniture and electronics, plus bank and stock ownership records
After your bankruptcy attorney goes over all of your information, and performs the qualifying tests, the next step is to fill out a Chapter 7 bankruptcy petition. This will be filed with the court after you take the mandatory credit counseling course. The law requires debtors to take two courses, one before and one after you file for bankruptcy. These are courses are important because the U.S. government wants to ensure that you now know how to be fiscally responsible and won’t end up falling back into the too-much-debt trap. A certificate will be supplied along with your petition.
Your creditors won’t be able to contact you at all, once your Chapter 7 petition is filed. A trustee will be appointed to represent them, so all of those annoying calls from debt collectors will cease. If any of them have a question, they will have to contact the trustee or get a hold of your attorney. After reviewing your petition, a judge will approve it, and you should be debt free in approximately six months.
Rhode Island Exemptions
Residents of Rhode Island have the option of using either state or federal exemptions in a bankruptcy. These exemption laws protect some of the assets and property of individuals filing for a Chapter 7 bankruptcy. While these exemptions can change to reflect economic conditions and other factors, they still provide options for those who want to keep specified amounts of property.
Some exempt property includes:
- Home: Up to $300,000 for a primary residence
- Vehicle: Up to $12,000 for one automobile
- Household goods: $9,600
- Pensions and benefits - 100% of all of the following:
- Policeman and firemen
- Workmen's compensation
- Disability insurance benefits
- Employment security benefits
- Public employee retirement benefits
- Interests in pension or profit sharing plans--Foreign Service employees
- Veterans Administration benefits (includes pensions, life insurance and disability benefits)
- Public safety officers' death benefits
- Fraternal Society benefits
- FEMA benefits exempt from garnishment
- Other benefits include – 100% of the following:
- Employees' trusts
- Real property of redevelopment agencies
- Necessary wearing apparel
- One lot or right of burial in cemetery
- Up to $50 of wages or salary of any other debtor
- Wages and salary of wife and minor children of debtor
- Wildcard exemption: $5,000 to any of the above-named exemptions
Talk to your local bankruptcy attorney today to find out which exemptions will benefit your situation. You may find that your attorney can discover hidden exemptions or other laws that could help you keep even more property or assets.
Don’t live under the oppression of debt. Free yourself by filing for a Chapter 7 or Chapter 13 bankruptcy now.
Rhode Island Bankruptcy Court
The Federal Center
380 Westminister Mall, 6th Floor
Providence, Rhode Island 02903-3246
Phone: (401) 626-3100