January 23, 2019
Filing for bankruptcy provides the relief you need when you’re behind on your bills, and learning about the differences between a Chapter 7 and a Chapter 13 bankruptcy is a good place to start. This article will explain other information you’ll need to know, such as:
- how to protect property in your Idaho bankruptcy, and
- whether your income qualifies you for a bankruptcy discharge.
You’ll also learn where to find the official bankruptcy forms, approved educational courses, your local bankruptcy court, and more.
Qualifying for Bankruptcy in Idaho—Means Testing
If figuring out which chapter you’d like to file is your first step, then determining whether you meet the chapter’s qualification requirements is the next. Here are the basics.
- Chapter 7 bankruptcy. You’ll meet income qualifications by passing the “means test.” If your household income is lower than the median income of your state, you pass and can receive a discharge in a Chapter 7 case. You might still pass the means test after subtracting allowed expenses.
- Chapter 13 bankruptcy. If your income exceeds the Chapter 7 limits, you can repay some or all of what you owe in a five year Chapter 13 repayment plan. The tricky part here is that you must have enough income to pay all required debts. To determine your Chapter 13 bankruptcy payment, you’ll do a calculation similar to that in Chapter 7. You’ll pay the greater of your disposable income, the value of your nonexempt property, or the amount of your nondischargeable debt (such as support obligations and tax debt).
The necessary income charts and expense guidelines are on the U.S. Trustee’s website (select “Means Testing Information”).
Protecting Property With Idaho’s Bankruptcy Exemptions
An important part of deciding the best chapter for you is determining whether you’ll have to give up property. Don’t worry—you won’t lose everything. In fact, you might not lose anything at all. Finding out which assets you can protect is as simple as looking at Idaho’s bankruptcy exemption law.
A list of federal bankruptcy exemptions exists, too, but Idaho doesn’t let residents choose between the two lists. You’ll use Idaho’s bankruptcy exemptions and the federal nonbankruptcy exemptions if they’re helpful.
Here's what will happen to nonexempt property (things you can’t protect with an exemption):
- In a Chapter 7 bankruptcy, the trustee appointed to manage your matter will sell any nonexempt property and distribute the proceeds to creditors according to the bankruptcy payment rules.
- By contrast, you can keep all of your property in a Chapter 13 bankruptcy. But, there’s a catch. You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan.
- Spouses who file together in Idaho can double the exemption amount in each category (except for the homestead) as long as both spouses have an ownership interest in the property.
Idaho’s Bankruptcy Exemption List
Here are some commonly used Idaho bankruptcy exemptions. Unless indicated, all references are to the Idaho Code or federal law.
Idaho Homestead Exemption
A filer can protect up to $100,000 in equity in a home or mobile home. This amount can’t be doubled. The exemption amount covers sales proceeds and insurance proceeds from the destruction of your home (conditions apply). (§§ 55-1001, 55-1002, 55-1003, §55-1008, 55-1113)
Idaho Motor Vehicle Exemption
A debtor can exempt up to $7,000 in a motor vehicle. (§ 11-605(3))
Idaho Wildcard Exemption
A debtor can exempt up to $800 of any tangible personal property (no real estate or nontangible property interests). (§11-605(10))
Other Bankruptcy Exemptions in Idaho
These are additional types of property you’ll be able to protect.
- Property exempt without limitation. You can exempt an unlimited amount of the following: burial plot, health aids that allow you or a family member to work and maintain your health, public assistance, and unemployment compensation. (§ 11-603)
- Property reasonably necessary for support. You can exempt the following property as long as it is reasonably necessary for your support (conditions might apply): proceeds received as the result of bodily injury or wrongful death of a person upon whom you’re dependent (§ 11-604(1)(c)); disability benefits (§ 41-1834); alimony or support payments (§ 11-604(1)(b)); insurance benefits (§§ 41-1833(1), 41-1930); group life insurance benefits (§ 41-1835); life insurance proceeds (§ 41-1930).
- Personal property. Up to $7,500 ($750 per item) of household appliances and furnishings, pets, instruments, heirlooms, and items of sentimental value (§§ 11-605(1)(a),(b),(c)); crops cultivated on up to 50 acres and water rights for 160 inches of water (§ 11-605(7)); up to $1,000 of jewelry (§ 11-605(2)); a firearm up to $750 in value (§ 11-605(8)).
- Pension and retirement benefits. ERISA-qualified benefits (§§ 50-1011, 11-604A); public employees’ retirement benefits (§§ 59-1317, 59-1325); firefighter's fund retirement benefits (§ 72-1422); employee plan benefits (§§ 11-604(1), 11-604A, 41-1834). (Additional exemptions might also be available for retirement benefits. See Your Retirement Plan in Bankruptcy.)
- Tools of the trade. Up to $2,500 of tools used in a trade or business. (§ 11-605(2))
- Wages. Up to $1,500 in disposable earnings per calendar year. (§ 11-605(11))
Idaho adjusts amounts periodically, and additional exemptions exist. To be sure that you’re protecting your property, check the Idaho statutes on the Idaho Legislature website or consult with a bankruptcy lawyer.
More Idaho Bankruptcy Information
You’ll use this information when you’re ready to prepare your paperwork and file your case.
Idaho Credit Counseling and Debtor Education Information
Individual filers must take two financial courses—one before filing and another before receiving a discharge (debt forgiveness). Approved providers are listed under “Credit Counseling & Debtor Education” on the U.S. Trustee’s website (be sure to scroll down to your district).
Bankruptcy Costs, Filing Fees, and Forms
Most people must pay something to file for bankruptcy. Here’s what you can expect.
- Official bankruptcy forms. Before the Idaho bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms webpage, you’ll file your paperwork in your local bankruptcy court.
- Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Find out about both in Bankruptcy Filing Fees and Costs.
- Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area. Many people benefit from retaining counsel. Find out the benefits of being represented by an attorney.
Idaho’s Bankruptcy Court Website and Location
When you file for bankruptcy, your local court will have its own rules you must follow, as well as forms that you must file. On the Idaho bankruptcy court website, you’ll find the court’s local rules and filing instructions by selecting “Self Representation” on the navbar.
The District of Idaho has three offices. Your case gets assigned to a court based on your county of residence. Please contact one of the offices below for further guidance.
550 W. Fort Street, St. 400
Boise, ID 83724
6450 North Mineral Drive
Coeur d'Alene, ID 83815
801 E. Sherman Street, Rm 119
Pocatello, ID 83201
This overview cannot address all information you’ll need to file a bankruptcy case. For more detailed information that can help you make important bankruptcy decisions, consider purchasing a book such as How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D.