Rhode Island Bankruptcy
Rhode Island Bankruptcy Law
Rhode Island bankruptcy laws closely reflect federal law, and the state’s exemption laws are quite generous in comparison to other states. In most cases, a person won’t lose their house or property while filing for Rhode Island bankruptcy, and the state provides other types of generous exemptions as well. The RI bankruptcy laws are not there to stop you from filing; they are there to help save your credit in the long run.
Like other states, Rhode Island requires anyone considering bankruptcy to attend a credit counseling course six months before the official file. Also, the same person must present evidence showing the attended a debtor education course before a final settlement is established.
Rhode Island Bankruptcy : Personal and Corporate
Families and corporations can both file for Rhode Island bankruptcy. A person or individual with normally file under Chapter 7 or Chapter 13, while a corporation will usually file under Chapter 11.
RI Bankruptcy : Chapter 7
There are a number of qualifications a person or family must meet in order to register for Chapter 7. The state of RI is strict with exemptions applying to residents. Even if a person has lived in the state for more than 180 days, they may still only receive the exemptions observed in their former state.
A person or family must also pass a means test that looks at their level of steady income. Even though the state of Rhode Island as an average household income $52,053, their unemployment rate is one of the highest in the country at 11.6%. A person can generally file for RI bankruptcy even if they are receiving unemployment benefits in Rhode Island. A family the qualifies for Chapter 7 may receive the following exemptions:
• $300,000 homestead
• Up to $24,000 in personal property
• Earned and unpaid wages to $50
• Pensions
• Public benefits
• Insurance
• Wild card
RI Bankruptcy : Chapter 11
If a corporation faces economic trouble, they may stay afloat if they file for Chapter 11 bankruptcy. The measure allows an owner to oversee the reorganization of finances and resources, employees, and other logistics in order to reduce debt.
RI Bankruptcy : Chapter 13
If person doesn’t qualify to receive Chapter 7, they will make structured payments over the next three to five years in order to reduce their owed debt up to about 25%. The advantage in filing for Chapter 13 is that a family can usually keep their house if facing the possibility of foreclosure.
Taxes
If you owe backed income taxes to the IRS, the state of Rhode Island is one of the few states in which you can have your tax debt eliminated. There are certain exemptions to this rule, and some families may even have to turn their tax returns over to a collector under a Chapter 7.
Filing for Rhode Island Bankruptcy
The process of Rhode Island bankruptcy is complex and often takes a heavy toll on an individual if they decide to try and handle the process alone. The best decision is to hire a lawyer to help you with turning in proper documents, files, and fees at the right time. A Rhode Island bankruptcy lawyer can also help you eliminate backed taxes to the IRS and help you reach the best settlement with creditors.
