Best Bankruptcy Lawyers in Rhode Island

About Bankruptcy Law in Rhode Island, United States

Bankruptcy law in Rhode Island is governed by federal regulations under the U.S. Bankruptcy Code, with local rules and procedures specific to the District of Rhode Island. Bankruptcy offers individuals and businesses in Rhode Island a legal path to resolve overwhelming debts either by reorganizing finances or by liquidating assets to pay off creditors. Common types of bankruptcy filings include Chapter 7, which involves selling certain assets to discharge debts, and Chapter 13, which allows for restructuring and repayment plans. While federal law dictates much of the bankruptcy process, Rhode Island has unique exemptions, district policies, and procedures that affect how cases are handled locally.

Why You May Need a Lawyer

There are several reasons why individuals or businesses in Rhode Island may require legal assistance when considering bankruptcy. Bankruptcy law is complex and failure to follow proper procedures could lead to a case dismissal or the loss of important assets. Common situations where legal guidance is invaluable include:

• Dealing with aggressive creditors or lawsuits related to debt collection.
• Facing foreclosure or car repossession and seeking to maintain ownership of property.
• Having income or asset levels that make filing under Chapter 13 or Chapter 7 uncertain.
• Handling complex business-related debts or partnerships.
• Understanding and utilizing Rhode Island-specific exemptions to protect certain property.
• Navigating the paperwork and documentation required for a successful filing.
• Determining the best bankruptcy chapter to file under for your unique circumstances.

A bankruptcy attorney can provide essential legal advice, guide you through local court processes, help protect your assets, and maximize the benefits of bankruptcy relief.

Local Laws Overview

While bankruptcy is primarily regulated by federal law, Rhode Island has several local rules and procedures that directly impact how bankruptcy is filed and resolved within the state. Key aspects include:

• Exemption Laws: Rhode Island allows bankruptcy filers to use state-specific exemptions to protect assets such as a primary residence, vehicles, and certain personal property from liquidation.
• Means Test: To qualify for Chapter 7 bankruptcy, filers must pass a means test that considers Rhode Island’s median income levels.
• Mandatory Credit Counseling: Debtors are required to complete credit counseling from an approved provider before filing.
• Local Forms and Procedures: The United States Bankruptcy Court for the District of Rhode Island requires specific forms and adherence to the court’s filing procedures.
• Homestead Exemption: Rhode Island’s homestead exemption protects up to $50000 of equity in a primary residence.

Consulting a lawyer familiar with Rhode Island bankruptcy law ensures that you can take full advantage of local protections and comply with court requirements.

Frequently Asked Questions

What are the main types of bankruptcy available in Rhode Island?

The most common types are Chapter 7 (liquidation) and Chapter 13 (repayment plan). Chapter 11 is also available for businesses or individuals with significant debt.

Do I have to liquidate all of my assets in bankruptcy?

No. Rhode Island’s exemption laws may allow you to keep certain property, including some equity in your home, vehicle, and personal possessions.

How does bankruptcy affect my credit score?

A bankruptcy filing will negatively impact your credit score and can remain on your credit report for 7 to 10 years. However, it can also provide an opportunity for a fresh financial start.

Can bankruptcy stop foreclosure or repossession?

Filing for bankruptcy can temporarily halt foreclosure or repossession proceedings through an automatic stay provided by federal law.

Is credit counseling required before filing?

Yes. You must complete credit counseling from an approved provider within 180 days before filing your case.

Will all of my debts be eliminated in bankruptcy?

Not all debts can be discharged. Generally, child support, alimony, certain tax debts, and most student loans are not eligible for discharge.

Can I file for bankruptcy more than once?

Yes, but there are waiting periods between filings depending on the type of bankruptcy previously filed and the outcome of that case.

What is the means test in Rhode Island?

The means test evaluates your income and expenses against Rhode Island’s median income to determine eligibility for Chapter 7 bankruptcy.

How long does the bankruptcy process take?

Chapter 7 cases typically take 4 to 6 months. Chapter 13 involves a repayment plan lasting 3 to 5 years.

Do both spouses have to file for bankruptcy together in Rhode Island?

No. Spouses may file individually or jointly, depending on their specific financial situation and shared debts.

Additional Resources

Individuals and businesses considering bankruptcy in Rhode Island may find these resources helpful:

• United States Bankruptcy Court for the District of Rhode Island
• Rhode Island Bar Association Lawyer Referral Service
• Legal Services Corporation of Rhode Island
• Department of Justice Approved Credit Counseling Agencies
• Consumer Financial Protection Bureau for education on bankruptcy and debt relief

Next Steps

If you are considering bankruptcy or facing overwhelming debt in Rhode Island, start by gathering all relevant financial documents including income statements, debt statements, tax returns, and asset lists. Schedule a consultation with a Rhode Island bankruptcy attorney who can review your situation, explain your options, and guide you through the filing process. Remember to seek out approved credit counseling before filing. Acting promptly can help protect your assets and provide the best opportunity for a successful financial fresh start.