Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Delaware. However, Delaware laws still play a major role, especially when it comes to property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Credit Counseling in Delaware
Before you file for Chapter 7 or Chapter 13 bankruptcy in Delaware, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of Delaware agencies that have been approved to provide this counseling.
Where to File
The Delaware bankruptcy court is located in Wilmington. You can find information on forms, local rules, and more at the court’s website.
Like every other state, Delaware has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Some states allow bankruptcy filers to choose between the state’s list of exemptions and a federal list, but Delaware isn’t one of them.
Delaware allows homeowners to exempt up to $100,000 of equity in a home in 2011; in 2012, the amount is $125,000. The total of all the other exemptions a debtor takes (other than this homestead exemption and an exemption for retirement accounts) can’t be more than $25,000 for an individual filer or $50,000 for a married couple.
The Means Test
When you file for bankruptcy, you must compare your income to the median Delaware income for a household of your size. If your income is less than the state median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median income in Delaware for a two-person household is just under $60,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
Delaware Debtor Education
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of approved Delaware agencies.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Delaware bankruptcy lawyer.