Vermont Bankruptcy Laws
In 2005 the United States government installed new bankruptcy acts for
how bankruptcy is to be regulated in each state. The 2005 Bankruptcy
Act set new stipulations on who is eligible for Chapter Seven
bankruptcy. The Act also increased the monthly payments for Chapter
The United States also requires that every individual who applies for
bankruptcy complete a financial advisement course at least six months
prior to applying for bankruptcy. Another course is also required
following the bankruptcy's completion. However this course is designed
to assist individuals in how to keep their debts to a minimum and how
to not need to file for bankruptcy in the future.
A Means Test
Because Vermont offers different kinds of bankruptcy for consumers, a
means test is required before a petition can be processed. The means
test will evaluate an individual's average income, his or her expenses,
and living conditions to those of all other Vermont residents.
If the individual's income average is above the state mean then he or
she is most often eligible for Chapter Thirteen bankruptcy. If the
individual's income average is below the state mean then he or she is
most often eligible for Chapter Seven bankruptcy.
Deciphering between whether or not an individual qualifies for which
chapter of bankruptcy can depend on monthly payments. If an individual
can pay no more than one hundred dollars a month towards his or her
debts, he or she is eligible for Chapter Seven bankruptcy.
If an individual can pay up to one hundred sixty-six dollars a month
towards his or her debts, he or she is eligible for Chapter Thirteen
bankruptcy. All individuals who fall between these two ranges are
usually eligible for Chapter Seven bankruptcy. After a bankruptcy
petition has been granted, all notices of foreclosure and creditor
statements will be frozen.
Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy is a system that allows petitioners to
eliminate their debts by using their own personal income. The Vermont
bankruptcy court will evaluate an individual's income, living
conditions, debt, and expenses and will create a personal repayment
plan. The plan will have outlined how much is necessary to be paid each
month so that the debt can be eliminated in a maximum of five years.
Chapter Seven Bankruptcy
Chapter Seven bankruptcy allows individuals to eliminate their debt
through the liquidation of non-exempt property. A court-assigned
trustee will liquidate the designated property and pay off the
creditors on the individual's behalf. This entire process will often
take no more than six months. Under this chapter of bankruptcy some
portions of property are marked as exempt by the state of Vermont.
A chart, as issued through the state, divides what assets are exempt
from liquidation. The divisions are created by property value and the
kind of property. In Vermont these include homestead assets, pension,
insurance, tools of the trade, and unpaid wages. These categories can
include alimony, public benefits, motor vehicles, homes under
seventy-five thousand dollars, and many other personal items for