January 20, 2017
If you’re considering filing for bankruptcy in Missouri, it’s likely that you’ll be able to keep most—or possibly all—of your property. You can learn what you’ll be able to protect by reviewing Missouri’s exemption statutes.
The Property You Can Keep
The law of the state of Missouri determines the assets that residents can exempt (protect) in bankruptcy. In Missouri, you must use Missouri’s exemptions because the state has opted out of the federal bankruptcy exemption scheme (some states allow residents to choose between the two systems).
However, you can use the federal “nonbankruptcy” exemptions in addition to Missouri’s state exemptions (discussed in detail below).
How to Protect Property: The Process
You’ll need to take steps to claim your exemptions. You can start by comparing your property to the exempt property list. You’ll list all of your exempt property on the official bankruptcy form Schedule C: The Property You Claim as Exempt. “Nonexempt” property consists of assets that you can’t protect with an exemption.
It’s the job of the bankruptcy trustee—the individual the court appoints to manage your case—to review all of your paperwork, including Schedule C. The trustee will object if it appears that you inappropriately exempted an item. If the trustee doesn’t object, you won’t have to do anything further. You’ll get to retain the asset.
What will happen to nonexempt property will depend on the bankruptcy chapter filed. The trustee will sell nonexempt property in a Chapter 7 bankruptcy and distribute the proceeds to creditors. In a Chapter 13 case, you’ll be able to keep all of your property; however, you’ll have to pay its value to your creditors in your three- to five-year repayment plan.
(You can learn about both chapters by reading Choosing the Type of Bankruptcy: Chapter 7 or 13.)
Missouri Property Exemptions
The most commonly-used Missouri exemptions are listed below (as of January 2017). Spouses who file a joint petition can double most exemption amounts. You’ll find the text of each exemption (with conditions) in the Missouri Revised Statutes (Mo. Rev. Stat.) on the website of the Missouri General Assembly.
- Mobile home—$5,000 (cannot be doubled); must be used as a principal residence and not attached to land. (§ 513.430.1(6))
- Homestead—$15,000 in equity in a principal residence (cannot be doubled). (§ 513.475)
Wages and Support
- Spousal support, alimony, or maintenance payment—$750 per month. (§ 513.430.1(10)(d))
- Earnings—75% of net earnings; 90% of net earnings if the filer is the head of the household; or 30 times the federal minimum wage per week. (§ 525.030(2))
- Motor vehicle—$3,000. (§ 513.430.1(5))
Household Furnishings, Jewelry, and Clothing
- Household items—$3,000; includes goods, furnishings, and appliances; clothing; books; animals and crops; and musical instruments. (§ 513.430.1(1))
- Wedding ring—$1,500. (§ 513.430.1(2))
- Other jewelry—$500. (§ 513.430.1(2))
Tools of the Trade
- Tools of the trade—$3,000; the things needed in your trade or profession, including books. (§ 513.430.1(4))
Retirement Accounts, Pensions, and Other Benefits
- Local government employee retirement benefits (§§ 70.695, 70.755)
- City employee retirement benefits (§ 71.207)
- Police and highway patrol retirement benefits (§§ 86.190, 86.353, 86.493, 86.563, 86.780, 104.250)
- Firefighter retirement benefits—including death and disability benefits. (§§ 86.563, 87.090, 87.365, 87.485)
- State employee retirement benefits (§ 104.540)
- Teacher and school employee retirement benefits (§§ 169.090, 169.240, 169.380, 169.520, 169.587, 169.690, 169.780)
- Workers’ compensation (§ 287.260)
- Administrative judge and legal advisor retirement benefits (§ 287.820)
- Unemployment compensation (§§ 288.380, 513.430)
- Social Security benefits, public assistance, unemployment compensation (§ 513.430.1(10)(a))
- Veterans’ benefits (§ 513.430.1(10)(b))
- Disability, illness, or unemployment benefits (§ 513.430.1(10)(c))
- Stock, bonus, pension, annuity, or retirement plan payments—to the extent necessary for support. (§ 513.430.1(10)(e))
- Qualified retirement or health savings plan (§ 513.430.1(10)(f))
- Unmatured life insurance (§ 513.430.1(7))
- Life insurance for funeral expenses—$15,000. (§ 513.430.1(7))
- Life insurance—$150,000; unmatured dividends, interest, and loan value (conditions apply). (§ 513.430.1(8))
- Burial plot—$100 or one acre. (§ 214.190)
- Certain partnership property (§ 358.250)
- Health aids (§ 513.430.1(9))
- Wrongful death award—amount reasonably necessary for support. (§ 513.430.1(11))
- Firearms, accessories, and ammunition—$1,500. (§ 513.430.1(12))
- Wildcard—$600; the filer can select any property. (§ 513.430.1(3))
- Head of household wildcard—$1,250 plus $350 for each dependent child under 21 years old or each household member with a disability. (§ 513.440)
Be aware that other exemptions exist, that the amounts can change, and that many exemptions are subject to conditions. Consulting with an experienced bankruptcy lawyer is a good way to ensure the protection of your property.
The federal nonbankruptcy exemptions often overlap state exemptions. When they do not, these exemptions will help you protect valuable assets, such as a qualified retirement plan, wages, and public benefits.
(For details, read Federal Nonbankruptcy Exemptions: A Supplement to Your State Bankruptcy Exemptions.)
Questions for Your Attorney
- Does it make sense to file for bankruptcy if it means that I’ll lose property?
- Will a Chapter 7 or Chapter 13 better protect my assets?
- Should I sell my property and use the proceeds to negotiate with my creditors?