Those facing overwhelming amounts of debt can get some relief under Vermont bankruptcy laws. Before starting the process, make sure you understand the protections you receive.

Bankruptcy Exemptions

The state of Vermont offers two exemption schemes for its residents to consider when filing for bankruptcy. The federal scheme protects the following assets:

• Up to $20,200 for a home
• Unmatured life insurance contract
• Life insurance payments if you depended on the deceased
• Up to $10,775 for life insurance policy with a loan value
• Alimony and child support
• Up to $20,200 for personal injury payments
• Up to $20,200 for tools of the trade
• ERISA qualified benefits, retirement benefits and pensions
• Up to $500 per item for a total of $10,775 for household goods
• Lost earnings payments
• Up to $1,350 for jewelry
• Health aids
• Wrongful death, crime victim’s compensation, public assistance Social Security, unemployment, and veterans’ benefits payments
• A wild card exemption for $1,075 of any property and $10,125 of the unused homestead exemption
• Up to $3,225 for a vehicle

Under Vermont bankruptcy laws, debtors may keep:

• Up to $75,00 for a homestead
• Wedding ring
• Up to $500 for jewelry
• Certain retirement benefits
• Disability benefits
• Group life insurance proceeds
• Up to $350 per month for an annuity
• Up to $20 per month for health insurance
• Up to $2,500 for vehicles
• Up to $5,000 for tools of the trade and professional books
• Stove, heater, refrigerator, freezer, water heater, sewing machines
• Up to $2,500 for furnishings, clothing, other appliances, animals, crops, musical instruments, and books
• Up to $5,000 for growing crops
• Up to 500 gallons of bottled gas
• One cow, one yoke of oxen or team of two horses, ten sheep, ten chickens, two goats, and feed for one winter
• Three bee swarms with hives and honey
• Up to $700 in bank deposits
• Tack, plow, and yoke
• Public benefit programs
• Support payments
• Public compensation programs
• Life insurance
• Loss of future earnings payments
• Proceeds from sale or destruction of exempt property
• 75 percent of weekly earnings

Chapter 7 Bankruptcy Information

Chapter 7 bankruptcy erases most debts through the bankruptcy process. You must qualify for this form of bankruptcy by passing a means test.

Chapter 13 Bankruptcy Information

Chapter 13 bankruptcy requires you to work through a three to five year repayment plan before assets are sold and debts are erased. This could protect some of your assets by buying some time to work on repayment.