Chapter 7 Bankruptcy in St. Louis

What Is Chapter 7 Bankruptcy?

Chapter 7 is the most common form of personal bankruptcy. Sometimes called a "liquidation" bankruptcy, it allows individuals and families to discharge (permanently eliminate) most types of unsecured debt — including credit card balances, medical bills, personal loans, utility arrears, and deficiency balances from repossessions.

Unlike Chapter 13, which involves a multi-year repayment plan, Chapter 7 is a relatively quick process. Most cases are completed and discharged within 3 to 4 months of filing. Once the discharge is entered, the debt is legally gone — creditors can never legally pursue you for it again.

Who Qualifies for Chapter 7?

To qualify for Chapter 7, you must pass what's called the "means test," which compares your average monthly income over the previous 6 months to the median income for a household of your size in Missouri. If your income is at or below the median, you automatically qualify. If it's higher, a more detailed calculation applies.

Current Missouri median income limits (updated November 1, 2025):

What Debts Are Discharged?

The following types of debts are typically eliminated in Chapter 7:

• Credit card balances
• Medical and hospital bills
• Personal loans and lines of credit
• Utility arrears
• Deficiency balances after repossession
• Certain older income tax debts (subject to rules)
• Payday loans
• Most judgments (unless based on fraud)

Debts that cannot be discharged include: student loans (in most cases), recent income taxes, domestic support obligations (alimony/child support), and debts incurred through fraud.

What Assets Can You Keep?

Missouri law allows you to exempt (protect) certain property from the bankruptcy process. Most Chapter 7 clients keep all of their assets because their property falls within these exemptions. Key exemptions include:

• Homestead: Up to $15,000 (individual) or $30,000 (married couple) in home equity
• Motor vehicle: Up to $3,000 in equity per vehicle
• Household goods & furnishings: Up to $3,000
• Retirement accounts: Fully exempt (401k, IRA, pension)
• Clothing: Up to $1,500
• Tools of the trade: Up to $3,000
• Wages: 75% of disposable earnings are exempt from garnishment

Timeline: What to Expect

• 1
  Free consultation — Meet with Attorney Baro to review your situation and confirm Chapter 7 is right for you.
• 2
  Credit counseling course — Required by law; takes about 1 hour, completed online, typically costs $10–$20.
• 3
  Case preparation & filing — You provide documents; we prepare and file the complete petition with the court.
• 4
  Automatic stay — Immediately upon filing, all collection actions must stop by federal law.
• 5
  341 meeting of creditors — Typically held 3–5 weeks after filing. Lasts about 10 minutes. You answer basic questions under oath. Creditors rarely appear.
• 6
  Discharge — Approximately 60 days after the 341 meeting, the court enters your discharge order. Your debts are eliminated.

Total time from filing to discharge: approximately 3–4 months.