Updated December 21, 2018
If you’re not making enough to meet your bills each month, filing a bankruptcy case might be the answer. But finding the information necessary to prepare your filing can be difficult. This article will help you find much of what you need to get started, including:
- official bankruptcy forms
- Delaware means testing information
- mandatory education providers
- your local Delaware bankruptcy court, and
- information about protecting your property in a Delaware bankruptcy.
If you’re wondering which bankruptcy chapter is best for you, check out What Are the Differences Between Chapter 7 and Chapter 13 Bankruptcy?
Delaware Bankruptcy Information
Federal law governs bankruptcy filings; however, you’ll still need to know some Delaware law and other information. This will get you started.
Means Testing, Credit Counseling, and Debtor Education
You’ll find two types of Delaware information on the U.S. Trustee website: the means testing figures used to determine whether you qualify for a discharge and approved education providers.
- Means testing information. To qualify for Chapter 7 bankruptcy, your family income will be subject to a “means test.” You’ll pass if your family income is 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 must complete a credit counseling session before filing and a debtor education 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 Exemptions
When filing a bankruptcy case, you’re allowed to protect (exempt) much of your property. The amount will depend on whether the asset appears on the list of Delaware bankruptcy exemptions.
Here’s what happens to nonexempt property that you can’t protect with a bankruptcy exemption:
- Chapter 7 bankruptcy. If you have nonexempt property, the Chapter 7 bankruptcy trustee will sell it for the benefit of your creditors.
- Chapter 13 bankruptcy. You won’t have to give anything up in a Chapter 13 bankruptcy. Instead, you’ll pay the value of the nonexempt property—or your disposable income, whichever is more—in monthly plan payments over three to five years.
You can exempt a total of $25,000 of any property described below using the Delaware bankruptcy exemptions (not including tools of the trade, retirement accounts, and your principal residence). Also, spouses who file for bankruptcy together can double the exemption amount as long as each has an ownership interest in the property.
Delaware Homestead Exemption
Up to $125,000 of equity in real property or a manufactured home used 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)
Delaware Motor Vehicle Exemption
Up to $15,000 of equity in a motor vehicle if it’s necessary for your employment. (Del. Code Ann. tit. 10, § 4914)
Delaware 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)
Other Delaware Exemptions
- 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)
- 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) The tools of the trade exemptions are much lower in New Castle and Sussex Counties ($75) and Kent County ($50). (Del. Code Ann. tit 10, § 4902(b)) Check these figures with a local attorney.
Unless otherwise indicated, all references are to the Delaware Code Annotated. Delaware adjusts its exemption amounts periodically, and additional exemptions exist. Check with the official website of the Delaware Code for any updates.
Delaware Bankruptcy Court Website and Location
The court’s address and telephone number are as follows:
U.S. Bankruptcy Court
824 Market ST N
Wilmington, DE 19801
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.”
Bankruptcy Costs, Filing Fees, and Forms
If you’re like most people, you want to know what filing for bankruptcy will cost. Here’s what you can expect.
- Official bankruptcy forms are free. Before the Delaware bankruptcy court wipes out qualifying debt, you must fill out the bankruptcy forms and disclose all aspects of your financial situation. You’ll find free, fillable, downloadable forms online on the U.S. Bankruptcy Court forms web page.
- Bankruptcy filing fees or waiver. You’ll pay the current bankruptcy filing fee when you file your paperwork with the court unless you qualify for a fee waiver.
- Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on your area (although the first consultation will likely be free). The easiest way to find out the going rate is by calling local bankruptcy offices. Find out the benefits of being represented by an attorney.
You’ll need to understand how the law will affect your bankruptcy case before filing. Although this article provides essential 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 or seek advice from a local bankruptcy attorney.