December 13, 2017
When finances are causing stress, filing for bankruptcy can help. To get started, you must first choose between Chapter 7 or Chapter 13 bankruptcy. Then, when you prepare the paperwork, you’ll need to know where to find the law that allows you to protect (exempt) property in South Dakota, as well as means test information, credit counseling providers, the official bankruptcy forms, and your local South Dakota bankruptcy court.
Official Bankruptcy Forms
Qualifying for a debt discharge (the order that forgives debt) requires you to give details about your income, expenses, property, bills, and recent financial transactions. To do so, you’ll gather required financial documents and transfer the information on official bankruptcy forms. Your South Dakota bankruptcy case will start when you file:
- the completed bankruptcy forms
- a filing fee or fee waiver, and
- proof that you’ve completed a credit counseling course (more below).
You can fill out the forms online on the U.S. Courts “Forms” webpage.
South Dakota Bankruptcy Information
Federal law governs bankruptcy filings; however, South Dakota’s laws and procedures still come into play.
Means Testing and Credit Counseling Information
Two types of information you need for a South Dakota bankruptcy case can be found on the U.S. Trustee website: means testing figures and approved credit counseling providers.
- Means testing information. Chapter 7 bankruptcy requires you to meet certain income guidelines by passing a “means test.” If your family income is less than the South Dakota median, you pass. If your family income is greater than the median, you might still qualify for a Chapter 7 when you take into account certain standard expenses. You’ll find the income charts and expense guidelines on the U.S. Trustee’s website (select “Means Testing Information”). To determine your Chapter 13 payment plan, you’ll do a similar calculation.
- Credit and debt education providers. You’ll take two classes when filing for bankruptcy, a credit counseling class and a debtor education course. The credit counseling course must be completed before filing. You’ll find the approved providers on the U.S. Trustee website under “Credit Counseling & Debtor Education” (scroll down to your bankruptcy district).
South Dakota Bankruptcy Court Locations
On the South Dakota Bankruptcy Court website, you’ll find instructions for filing your paperwork in “Filing Information” under the “Court Info” tab. You’ll also want to become familiar with the court’s rules by reading the information under the “Local Rules and Forms” tab.
The South Dakota Bankruptcy Court maintains two offices. Before you file, you should call one of the court’s offices to determine which will have jurisdiction over your case.
|U.S. Bankruptcy CourtBankruptcy Clerk's Office225 South Pierre Street, Room 203Pierre, SD 57501-2463(605) 945-4460
||U.S. Bankruptcy CourtBankruptcy Clerk's Office400 South Phillips Avenue, Room 104Sioux Falls, SD 57104-6851(605) 357-2400
South Dakota Bankruptcy Exemptions
When you file for bankruptcy, you’ll want to exempt (protect) as much property as you can. You might even be able to protect all of it, depending on whether it appears on the list of allowable South Dakota exemptions.
If you have to turn over any nonexempt property, the Chapter 7 trustee will sell it for the benefit of your creditors. If you file a Chapter 13 case, you won’t turn over any property. Instead, you’ll pay out the value of the nonexempt property over the course of your three- to five-year Chapter 13 repayment plan.
Below are some of the most commonly used bankruptcy exemptions. If you are married and filing a joint bankruptcy petition, you can double the amount of most South Dakota bankruptcy exemptions if you both own the property (not including the homestead exemption). If only one spouse owns the property, then you cannot double the amount. The statute citations refer to the South Dakota Codified Laws.
- Homestead exemption. All equity in your home if the property is less than one acre in a town and 160 acres elsewhere. This exemption will cover a mobile home that is larger than 240 square feet as long as you registered it with the state at least six months before your bankruptcy. You can exempt up to $30,000 of the proceeds from selling your home for up to one year. That amount increases to $170,000 if you are a widow, widower, or over 70 years old and not married. Spouses cannot double the homestead exemption; the spouse or child of a deceased homeowner may also claim the exemption. (§§ 43-31-1 through 43-31-5, 43-31-13)
- Personal property. Clothing; food and fuel to last one year; bible and books up to $200; pictures; cemetery association property; church pew; burial plot; health aids that are prescribed by a professional. (§§ 43-45-2(2) through (5); 43-29-25)
- Motor vehicle. There is no specific exemption for a car or other motor vehicle; however, you can use South Dakota’s wildcard exemption (described below) to exempt equity in your car.
- Wages. Wages that you earned within the 60 days before your bankruptcy if needed to support a family (§ 15-20-12); wages of prisoners in work programs (§ 24-8-10).
- Pensions. Public employees (§ 3-12-115); city employees (§ 9-16-47); ERISA-qualified benefits up to the currently-allowed amount (§ 9-16-47). (For more information about exempt retirements, including IRAs and other tax-exempt plans, see Your Retirement Plan in Bankruptcy.)
- Public benefits. Crime victims' compensation (§ 23A-28B-24); public assistance (§ 28-7A-18); unemployment compensation (§ 61-6-28); workers' compensation (§ 62-4-42).
- Tools of the trade. None, but you can use the South Dakota wildcard exemption to protect tools of the trade (see below).
- Insurance. Life insurance proceeds up to $10,000 if the beneficiary is a surviving spouse or child (§ 43-45-6); health benefits up to $20,000; the proceeds or cash value of an endowment or life insurance policy, up to $20,000 (§ 58-12-4); annuity contract proceeds up to $250 per month (§ 58-12-8); life insurance proceeds if the policy specifically states that it cannot be used to pay creditors (§ 58-15-70); fraternal benefit society benefits (§ 58-37A-18).
- Wildcard. Up to $5,000 of any personal property (not real estate). If you’re the head of a family, you can exempt up to $7,000 of personal property. (§ 43-45-4)
Be aware that additional exemptions exist. Also, South Dakota adjusts its exemption amounts periodically. To make sure you have the most recent figures, be sure to check for updates on the Codified Laws section of the website of the South Dakota Legislature.
This overview does not provide all of the information needed in a bankruptcy case. You’re responsible for familiarizing yourself with the law. Because you’ll want to be sure to make well-informed decisions about your bankruptcy matter, consider purchasing a do-it-yourself book like How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D.