St. Louis Bankruptcy Attorney
July 20, 2017 Blogroll No Comments

Bankruptcy is a legal procedure by which individuals and businesses can discard debt or agree to repayment plans with creditors. For many, bankruptcy provides an opportunity to start again while repaying debts. Still, filing bankruptcy comes with a stigma despite the fact that nearly 800,000 individuals and businesses filed for bankruptcy in 2016.

Most filings for bankruptcy do so under a Chapter 7 bankruptcy filing. Although Chapter 7 bankruptcy is available to both businesses and individuals, it is more commonly used by individuals.

Chapter 7 Bankruptcy Eligibility

Not everyone is eligible to file for Chapter 7. In fact, Chapter 7 bankruptcy requires focuses on two major factors when determining if an individual is eligible: income or having previously filed bankruptcy.

An individual earning above a certain income level in ineligible for bankruptcy. An individual seeking to file for bankruptcy in Missouri must earn an income below the state’s median income level of $38,895. Individuals earning more than Missouri’s median income are not automatically eligible to file for Chapter 7 bankruptcy. Certain exempt assets and expenses may be subtracted from the filer’s income to determine whether his or her disposable income falls below the state’s median income. An individual with excessive income is not allowed to file for Chapter 7 bankruptcy; this helps avoid high-earners from abusing the bankruptcy system.

In addition to the income test, Chapter 7 bankruptcy is not available to individuals who have received a bankruptcy discharge in the last six to eight years.

What Happens to My Property?

Filing for bankruptcy does not mean that you will be left homeless, penniless, and living on the street. This is a common misconception many have about bankruptcy. Most individuals filing for Chapter 7 are able to keep most of their possessions. Some filers may be eligible to keep all of their possessions. Bankruptcy laws identify exempt property–that is, the property that is off limits to creditors–and allow the filer to maintain both ownership and access Some examples of exempt property include:

  • One’s residence;
  • Retirement funds, such as 401k accounts;
  • Social Security Income; and
  • Disability benefits.


The nonexempt property is added to the bankruptcy estate. This property can be sold and the proceeds are used to satisfy outstanding debts. The bankruptcy estate and its respective sales are managed by a court-appointed bankruptcy trustee. The trustee ensures that the bankruptcy estate is properly managed and that creditors are paid.

Consult a St. Louis and St. Charles Bankruptcy Attorney Today

Do not allow the social stigma of filing for bankruptcy keep you from reasonably settling your debts. Here at the Law Offices of Kenneth P. Carp, we can help alleviate your stress by advising you as to what bankruptcy alternatives are best for you. Schedule your initial consultation by calling (636) 947-3600 today.

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