- Do you qualify for Chapter 7 bankruptcy and how much does it cost to file in Wyoming?
- Are there any alternatives to Chapter 7 bankruptcy? It's always good to explore other options that may better suit your situation before going down the bankruptcy route.
- What specific information do you need to know about Chapter 7 bankruptcy in Wyoming? Each state has its own rules and regulations, so it's important to be aware of the specifics for Wyoming.
Chapter 7 bankruptcy is the most common type in the United States and it wouldn't surprise me if the majority of the 691 bankruptcies filed in Wyoming by June 30th, 2021 were Chapter 7 cases.
You can use the Wyoming Chapter 7 Calculator below to estimate your qualification and the cost:
Now, let's dive into why Chapter 7 is a popular choice in Wyoming.
1) How Chapter 7 Bankruptcy Works in Wyoming
There are two main questions most people have when it comes to their debt situation:
- How quickly will they get relief from the debt?
- How much is it going to cost them to file?
When comparing different ways to get out of debt, Chapter 7 bankruptcy is usually the cheapest and fastest option compared to Chapter 13 bankruptcy, debt negotiation, debt management, and debt payoff planning.
How Fast Do You Get Relief in A Chapter 7 Bankruptcy?
In Wyoming, you can usually get a Chapter 7 bankruptcy discharge in as little as 120 days or four months.
When deciding to file a Chapter 7, you may hear the term "no-asset" in the Chapter 7 case. This means you may not have a house or any other valuable assets exceeding Wyoming's bankruptcy exemptions. So, if you don't own any assets, this can be beneficial in Chapter 7, making it less complex. Remember that every case is unique, so you'll want to consult with an attorney if you are considering filing.
There are some challenges you'll need to navigate along the way. It's important to understand the ins and outs of the process and make sure you meet all the requirements. There are professionals out there who can guide you through bankruptcy laws and help you make the best decisions for your financial future.
If you're feeling overwhelmed by debt and want to explore your options, consider the potential benefits of a Chapter 7 bankruptcy in Wyoming. In just 120 days, you could be on your way to a brighter financial future.
How Much Does It Cost To File Chapter 7 Bankruptcy in Wyoming?
The cost of filing for Chapter 7 bankruptcy nationwide usually falls somewhere between $500 and $3000.
However, where you live may cause the price to change For example, it may cost $1,200 for a Chapter 7 bankruptcy attorney fee in Laramie, but might cost $1,500 in Cheyenne.
Sometimes, you can reduce the cost of filing for bankruptcy through a filing fee waiver. If you meet certain criteria, you might be eligible for a reduced fee or even have it waived altogether. Make sure to check out the Wyoming filing fee waiver for all the details.
How Do I Qualify For Chapter 7 Bankruptcy in Wyoming?
A Chapter 7 bankruptcy is designed for those who cannot repay some debts. However, before you can file, you must go through an income evaluation to see if you qualify for a Chapter 7 bankruptcy in Wyoming. This evaluation is called the means test.
Unsecured debts are debts that don't have any collateral attached to them. So, if you file a Chapter 7 bankruptcy, you can discharge medical bills, personal loans, particular old income tax debts, old utility bills, credit card debts, and most personal judgments. A Chapter 7 bankruptcy is like a fresh start, allowing you to get back on your feet. If you manage to pass the Wyoming bankruptcy means test then your unsecured debts can be wiped away.
It's like hitting the reset button on your financial life, giving you a chance to start fresh.
What about secured debts in Chapter 7?
If you're looking to wipe out secured debts, such as car loans and mortgages, under Chapter 7, there's a catch. You'll have to give up the asset to the creditor and the creditor has to agree to accept the asset as payment in full for what you owe.
Now, let's dive into what it takes to qualify for Chapter 7 bankruptcy.
IMPORTANT: Chapter 7 Qualification via Wyoming Means Test
The Bankruptcy Means Test calculates your average monthly and annual income. It compares your income against the median income of other households in Wyoming.
If your average or median income is below the Wyoming median income, you might qualify for a bankruptcy discharge under Chapter 7. That means you could be on your way to financial freedom!
But how can you find out if you're eligible? To figure out if you meet the requirements for Chapter 7 bankruptcy, try out this Wyoming Chapter 7 Bankruptcy Means Test Calculator below.
What if My Income Exceeds The Chapter 7 Means Test Allowable in Wyoming?
If your income is higher than the average income in your state, you might need to take a look at part 2 of the means test or consider an alternative option.
The means test is not a simple pass-or-fail exam, it consists of two parts. So, even if you "fail" the first part, there's still a chance to "pass" the second part and qualify for Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Income Limits in Wyoming
Let's dive into Wyoming's median income limit figures for the Means Test. These numbers are adjusted regularly based on data from the IRS and Census Bureau. So, if you're filing for bankruptcy on or after April 1, 2024, here's what to expect:
- For each additional member in your household, you add $9,000.
The US Trustees website is your go-to source for the most current numbers so be sure to check it out for up-to-date information.
Understand Wyoming bankruptcy exemptions
Let's talk about bankruptcy exemptions and how they can protect your property in a bankruptcy case. Exemptions ensure that certain assets are protected from being sold off in a Chapter 7 liquidation case. So, if you have a property that's not covered by these exemptions, it might be able to be sold.
To compare, in a Chapter 13 case, if you have non-exempt equity in your property, it could increase the amount you have to pay in your bankruptcy plan.
Now, let's talk about the homestead exemption because protecting a home is a top priority. In Wyoming, the homestead exemption is pretty straightforward. It's based on your age and marital status.
- For single and under or over the age of 65, the exemption is about $20,000.
- For married and under or over the age of 65, the exemption is about $40,000.
Wyoming has its own specific homestead bankruptcy exemption, stating: "Wy. Stat. Ann. § 1-20-101. Real property or house trailer you occupy." If you're curious about the federal bankruptcy exemptions, they're all laid out in the 11 U.S. Code §522. However, Wyoming doesn't let you use those federal exemptions.
Be sure to check Wyoming bankruptcy laws because laws can change, and you don't want to be caught off guard. So, do your research and stay informed.
Chapter 7 Bankruptcy Pros and Cons
Like any debt relief option, Chapter 7 bankruptcy has its upsides and downsides. Let's dive in and explore the pros and cons.
Pros
- Affordable debt relief solution
- You can receive a discharge in about 120 days.
- Fresh start that allows you to discharge the debt.
- You may be able to keep your home and belongings due to exemptions.
- It can put a stop to debt collection lawsuits. No more constant phone calls, threatening letters, or fear of legal action.
- No more deficiency. This is when you owe more on a loan than what your collateral is worth and the difference is called a deficiency, but a Chapter 7 can wipe it away.
- Provides relief for unaffordable unsecured debts.
Cons
- There are income requirements for qualification that you need to meet.
- You may potentially lose your home and other belongings if your assets exceed the exemption limit.
- It'll have a negative credit report impact for 10 years.
- It may have a negative credit score impact.
- If you have non-dischargeable debt it may not be able to be wiped away. These are debts such as student loans and taxes that may not be able to be included.
- Difficult to prevent foreclosure
Now that we've covered the pros and cons, let's move on to exploring the alternatives to Chapter 7 bankruptcy in Wyoming.
2) Alternatives to Chapter 7 Bankruptcy in Wyoming
Let's dive into some alternatives to Chapter 7 bankruptcy in Wyoming. Now, there could be a few reasons why you might not qualify for Chapter 7 bankruptcy, have too many assets, or simply don't want to go down that road. But don't worry, there are other options available!
a) Chapter 13 Bankruptcy
With a Chapter 13 bankruptcy, you can restructure your debts into a more manageable monthly plan. This means you may be able to afford your house and car payments easier.
There are many benefits to a Chapter 13 bankruptcy. First off, it can put a stop to foreclosures, repossessions, and even wage garnishments. You can also catch up on mortgage payments, past-due car payments, and tax debt over three to five years through the bankruptcy plan. Chapter 13 bankruptcy might also allow you to reduce unpaid child support and alimony. However, it's important to note that you must continue making your regular domestic support payments to stay in Chapter 13. In a Chapter 13 plan, some people may be able to lower their car loan payments and potentially get rid of second mortgages, as long as they meet certain requirements.
Can you afford Chapter 13 bankruptcy?
So, let's say you're in a situation where you don't qualify for a Wyoming Chapter 7 bankruptcy. Now you're left wondering if pursuing a Chapter 13 bankruptcy is the way to go. But here's the kicker: can you afford it? I know it sounds strange to ask if you can afford bankruptcy, but it's an important question to consider.
If you're trying to figure out whether you can potentially afford a Chapter 13 bankruptcy, you can use this Chapter 13 calculator that will help you estimate whether you'll be able to manage the monthly payment.
b) Debt Relief
If you're thinking of going the debt settlement route, there are a few things to keep in mind. First off, consider the impact it might have on your credit score.
When you partner with a debt settlement firm, they will make you fall behind on the accounts you choose to include by about 6 months. They will then negotiate with your creditors on a lower overall amount you pay back over 2-4 years. This may hurt your credit score since you have to fall behind.
Ultimately, it is up to your creditors if they want to agree or deny negotiations, so there is quite a bit of risk involved. If they agree, then you pay the lower amount through an escrow account, but they will expect you to keep up on all the payments. However, if the creditors disagree, they may try to sue you. However, you can choose which accounts to include in the program. There also may be potential taxes on the forgiven debt, so be sure to consult with the firm to understand more about the process.
c) Debt Management
Debt management companies focus on negotiating lower interest rates and the program usually lasts for about 3 to 5 years. Credit counseling is generally a more expensive option compared to the others. Some creditors, like some personal loan lenders, may not want to work with a debt management company. There is also a potential impact on your credit score.
Debt management can be a good option for those who have a bunch of high-interest credit card debt. The firm will work to significantly lower those so you can pay on the principle.
If you're considering debt management in Wyoming, it may be a suitable option if you have a significant amount of high-interest credit card debt. By reducing your interest rate from, let's say, 22-30% to a more manageable 10%, you can make your debt more affordable. This can be a beneficial solution for individuals in this particular situation.
d) Debt Payoff Planning
If you're feeling the weight of debt on your shoulders with interest piling up, you have options, such as debt payoff planning.
Debt payoff planning involves cutting down on expenses and putting any cash flow you have toward your debts to avoid interest charges. This isn't a one-size-fits-all solution. Depending on the size of your financial hardship, it may not be feasible for everyone. Payoff planning means you are paying the full amount back, so it's helpful if you can afford your debt but want to pay it off more efficiently.
There is an app called the Savvy debt payoff planner that will help you prioritize your debts by combining efficient methods to create a plan to pay things off as quickly as possible. On average, it saves folks around $2,000 in interest.
3) Specific Wyoming Chapter 7 Bankruptcy Information:
Let's dive into some key points about filing Chapter 7 bankruptcy in Wyoming that might help you make up your mind. First off, Chapter 7 bankruptcy is often referred to as "liquidation bankruptcy." It's called that because it involves selling off your assets to pay off your debts. Certain exemptions in place can protect some of your property, like your home, car, and essential belongings. One of the major benefits of filing Chapter 7 bankruptcy is that it provides you with a fresh start. It allows you to wipe the slate clean and start rebuilding your financial life. Once your debts are discharged, you're no longer legally obligated to repay them.
However, filing for Chapter 7 bankruptcy does come with its fair share of challenges. For starters, it can have a significant impact on your credit score. This can make it difficult to obtain loans or credit in the future. Another challenge to consider is that not all debts can be discharged through Chapter 7 bankruptcy. Certain types of debts, such as student loans, child support, and tax debts, may not be eligible for discharge.
Now that you have a better understanding of what filing Chapter 7 bankruptcy in Wyoming entails, you can weigh the pros and cons to determine if it's the right path for you. Remember, it's always a good idea to consult with a bankruptcy attorney who can guide you through the process and provide personalized advice based on your specific situation.
Credit Counseling and Debtor Education Courses
When you're going through the bankruptcy process, there are a couple of courses you need to take which are required if you want a discharge.
The first course you need to take is a credit counseling course. This has to be done before you file your bankruptcy case. It's designed to guide you and help you understand your financial situation better.
The second course is called a debtor education course. It's meant to educate you on financial management and give you the tools you need to make better financial decisions in the future and get back on your feet after the bankruptcy.
The United States Trustee's Office has approved certain companies in Wyoming that offer these bankruptcy courses. You can find a list of these companies on the UST website and these courses can be completed online. There is a small fee involved, but they're designed to help you navigate through the bankruptcy process and improve your financial future.
Wyoming Chapter 7 Bankruptcy Court Locations
When filing for bankruptcy, you will have to attend the 341 meetings of creditors. A lot of these meetings have been happening over the phone or through Zoom. But, if you have a meeting that needs to happen in person, it's important to know where the courthouse is.
Here are the locations for the bankruptcy court houses:
District of Wyoming
- 2120 Capitol Avenue, Room 2131, Cheyenne, WY 82001
- 111 S. Wolcott Street, Room 121, District of Wyoming
- 105 Albright Avenue, Mammoth, WY 82190
Chapter 7 Bankruptcy Trustees Wyoming
The Chapter 7 bankruptcy trustees in Wyoming are broken down by bankruptcy district. You can also find the list here.
- David L. Miller: (801) 447-8777.
- Randy L. Royal: (307) 765-4433.
- Tracy L. Zubrod: (307) 778-2557.
Before you jump into filing a bankruptcy case, it's important to review Wyoming's local bankruptcy rules. These rules may have some slight differences compared to the Federal Bankruptcy Rules.
Conclusion
If you're curious to see if you qualify and want to estimate the cost, you can try out the Chapter 7 bankruptcy means test calculator below.
Now, most people choose to work with a bankruptcy attorney when dealing with Chapter 7 or Chapter 13 bankruptcy. But there's an option to file without one. If you're interested in learning more about filing bankruptcy without an attorney, give this article a read.