Wyoming Bankruptcy Law
Wyoming bankruptcy follows laws that reflect federal law and compare closely to other states with strict laws concerning exemptions. Because of the state’s low unemployment rate, 7.0%, and lack of exemptions under Chapter 7, many people will either choose to file for Chapter 13 or be told by a judge that it’s their only option. The WY bankruptcy laws are strict, but the laws are in place to help a person who has either been irresponsible with their finances or been the victim of unfortunate economic conditions.
Wyoming Bankruptcy : Personal and Corporate
If a family or individual decides to file for Wyoming bankruptcy, they generally file for Chapter 7 or Chapter 13. If a corporation is facing economic hardship, it can opt to file for Chapter 11. There are other types of bankruptcy, but these chapters are the most common.
WY Bankruptcy : Chapter 7
Chapter 7 bankruptcy has become harder and harder to obtain in the last couple of years under federal and state law. However, the initiative still works best for families or individuals with large amounts of unsecured debt (credit cards, medical, personal loans, etc) and low to no means of income.
In order to qualify for Chapter 7, a person must pass a means test. In order to pass, the person’s household income must fall below Wyoming’s state average of $53,757, and a judge must conclude that the person cannot afford monthly payments in order to pay back some of the debt. After qualifying for Chapter 7, a person may be entitled to some or all of the exemptions below:
• $10,000 homestead
• $2,400 for vehicle
• Up to $3,000 in personal property
• $2,000 for tools of trade
WY Bankruptcy : Chapter 11
If a corporation is facing economic instability, an owner may choose to file for Chapter 11 bankruptcy. The measure gives the corporation a “grace period” in order to reorganize its finances, employees, and other essential logistics in order to increase profit and reduce the overall owed debt.
WY Bankruptcy : Chapter 13
A family may either choose to file for Chapter 13 or be forced to file this type of bankruptcy. The most beneficial aspect of Chapter 13 allows a family or individual to keep their property and assets during a period of three to five years. During this time period, they make monthly payments in order to reduce their overall owed debt by as much as 25% or even more in some cases. This type of bankruptcy is also called “reorganization” because it allows a person or family to organize their finances and living expenses in order to reduce debt.
If a person files under Chapter 7, a creditor may collect their federal and state tax returns as assets. These funds are normally protected under Chapter 13.
Filing for Wyoming Bankruptcy
Like most other states, the state of Wyoming makes a person attend a credit counseling course six months before even filing for Wyoming bankruptcy. Additionally, the same individual must attend a debtor education courses before reaching a final settlement with a creditor.
It’s always in your best interest to hire an attorney if considering Wyoming bankruptcy. A lawyer can help you submit the right documents and fees at the right time, and they can sometimes help reduce backed taxes to the IRS in some cases. Nonetheless, they will help you reach the best possible settlement with your creditor. You will be required to submit the following documents under Wyoming and federal law:
• Attorney certificate
• Proof of income
• Proof of net monthly income
• Anticipated changes in income
• Educational individual retirement account
• Tax returns from most recent to as far back as four years