How to File Bankruptcy in Delaware

Learn about the information you'll need to file your Delaware Bankruptcy.

December 12, 2017

When you’re not making enough money to pay your bills each month, filing a bankruptcy case might be the answer. But knowing where to look for the information can be difficult to figure out. This article will help you find much of what you need to get started, including official bankruptcy forms, Delaware means testing information, credit counseling providers, your local Delaware bankruptcy court, and information about protecting your property in a Delaware bankruptcy.

(Are you wondering which bankruptcy chapter is best for you? Check out What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?)

Official Bankruptcy Forms

You must take some steps before the Delaware bankruptcy court wipes out qualifying debt. You’ll disclose all aspects of your financial situation on official bankruptcy forms found on the U.S. Courts page. Then you’ll file the paperwork with the Delaware bankruptcy court along with a filing fee or a request for a fee waiver and proof that you’ve completed a credit counseling course (more below).

Delaware Bankruptcy Information

Federal law governs bankruptcy filings; however, Delaware law and other information will still come into play. Here’s what you need to know.

Means Testing and Credit Counseling Information

You’ll find two types of Delaware information on the U.S. Trustee website: means testing figures and approved credit counseling providers.

  • Means testing information. To qualify for Chapter 7 bankruptcy, your family income will be subject to a “means test.” You’ll pass with a family income that’s lower than the median income for Delaware—and possibly even if it’s higher if you can subtract enough pre-set expenses. The income charts and expense guidelines are published on the U.S. Trustee’s website (select “Means Testing Information”). To file a Chapter 13, you’ll do a similar calculation to find out the amount of your Chapter 13 bankruptcy payment.
  • Required course providers. Most debtors (all consumer filers, but not business debtors) must complete a credit counseling session before filing and a financial management course afterward. The U.S. Trustee website publishes a list of the approved providers for the Delaware district. Click on “Credit Counseling & Debtor Education.”

Delaware Bankruptcy Court Locations

The court’s address and telephone number are as follows:

U.S. Bankruptcy Court
824 Market ST N
3rd Floor
Wilmington, DE 19801
(302) 252-2900

You’ll find instructions for filing your paperwork and the local rules on the Delaware Bankruptcy Court website (click on “Filing Without an Attorney” and "Court Info").

Delaware Bankruptcy Exemptions

When filing a bankruptcy case, you’re allowed to protect (exempt) much of your property. You might even be able to keep all of it. Whether that’s possible will depend on if your property appears on the list of Delaware bankruptcy exemptions.

If you have to turn over nonexempt property, the Chapter 7 bankruptcy trustee will sell it for the benefit of your creditors. You won’t have to give anything up in a Chapter 13 bankruptcy, however. Instead, you’ll pay the value of the nonexempt property in monthly plan payments over three to five years.

In Delaware, spouses who file a joint bankruptcy can double the exemption amount as long as each has an ownership interest in the property.

Here are some common exemptions available under Delaware law. Unless otherwise indicated, all references are to the Delaware Code Annotated. (Note: When you file for bankruptcy in Delaware, you can exempt a total of $25,000 of any property described below, not including tools of the trade, retirement accounts, and your principal residence.)

  • Homestead or residential property. Up to $125,000 of equity in real property or a manufactured home that you use as your principal residence; any interest that you have in real estate held as a tenant by the entirety. (Del. Code Ann. tit. 10, § 4914)
  • Insurance benefits. Life insurance proceeds, group life insurance policy or proceeds, and life insurance proceeds if the policy prohibits using them to pay creditors. (Del. Code Ann. tit. 18, § 2725, 2727, 2729)
  • Motor vehicles. Up to $15,000 of equity in a motor vehicle if necessary for your employment. (Del. Code Ann. tit. 10, § 4914)
  • Personal property. Family bible and books, family pictures, pew or seat in a place of public worship, burial plot, clothing; tools necessary for your business, not to exceed $75 in New Castle and Sussex Counties or $50 in Kent County; sewing machines and pianos for personal use. (Del. Code Ann. tit. 10, §4902)
  • Pension, retirement, and life insurance benefits. Amounts payable under retirement plans, annuities, and insurance contracts (Del. Code Ann. tit. 10, § 4915); police officers’ pensions (Del. Code Ann. tit. 11, § 8803); state employees pensions (Del. Code Ann. tit. 29, § 5503); volunteer firefighters’ pensions (Del. Code Ann. tit. 16, § 6653).
  • Wages. 85% of unpaid wages. (Del. Code Ann. tit. 10, § 4913)
  • Educational savings plans. Delaware college investment plan accounts or Delaware ABLE accounts. (Del. Code Ann. tit. 10, § 4916)
  • Unemployment compensation. Unemployment compensation benefits. (Del. Code Ann., tit. 19, § 3374)
  • Workers’ compensation. (Del. Code Ann. tit. 19, § 2355).
  • Tools of the trade. A vehicle or tools necessary for your employment up to $15,000 in value. (Del. Code Ann. tit 10, § 4914)
  • Wildcard exemption. The head of household can protect an additional $500 worth of any other personal property except tools of the trade. (Del Code Ann. tit. 10, § 4903)

Delaware adjusts its exemption amounts periodically and additional exemptions exist. Check with the official website of the Delaware Code for any updates.

You’ll need to understand how the law will affect your bankruptcy case before filing. Although this provides important information, it isn’t an all-inclusive overview. Consider purchasing a detailed self-help book such as How to File Chapter 7 Bankruptcy by Cara O’Neill and Albin Renauer J.D. for more details.

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