Vermont Bankruptcy Law
Bankruptcy Courts in Vermont
If you live in Vermont and are considering filing for bankruptcy, your case will be handled in the U.S. Bankruptcy Court for the District of Vermont, which has two locations: Burlington and Rutland.
All Vermont bankruptcy cases follow federal bankruptcy law, but the court also applies local rules and procedures that supplement those laws. Because the court has its own local rules and procedures, it’s helpful to work with a bankruptcy attorney who understands Vermont-specific requirements. Bankruptcy court decisions follow guidance from and may be reviewed by the U.S. Court of Appeals for the First Circuit, which also covers Maine, Massachusetts, New Hampshire, and Puerto Rico.
Bankruptcy Filing Trends in Vermont
Although Vermont has one of the lowest rates of consumer bankruptcy filings nationwide, filings remain significant for those dealing with overwhelming debt. According to the bankruptcy court, filings remain in the low hundreds annually.
Most of the cases are Chapter 7; Chapter 13 filings are fewer but play an important role in helping homeowners protect property and reorganize debts.
Vermont Exemptions — What You Can Keep
Bankruptcy does not mean losing everything you own. Vermont law protects certain property, including the basic items you need to live and work. This “exempt” property cannot be taken or sold to pay creditors.
Vermont allows filers to choose between state and federal exemptions. The choice depends on your individual circumstances, so speaking with an attorney can help you determine which option provides greater protection.
Below are examples of some of the most common exemptions available to Vermont residents. These amounts show how much property you can protect when filing for bankruptcy. Married couples filing jointly may each claim the full amount of an exemption for property they jointly own.
Common Vermont State Exemptions
| Property Type | Amount Protected (Individual / Joint) |
|---|---|
| Homestead (including permanently sited mobile home) | $125,000 / $125,000 |
| Motor vehicle | $2,500 / $5,000 |
| Tools of trade / professional books | $5,000 / $10,000 |
| One wedding ring | 100% |
| Jewelry (other than wedding ring) | $500 / $1,000 |
| Household goods, furnishings, clothing, appliances, books, animals, crops, musical instruments | $2,500 / $5,000 |
| Wildcard | $7,400 / $14,800 |
| Bank deposits | $700 / $1,400 |
| Health aids | 100% |
| Life insurance (various types) | Up to 100% depending on policy |
| Government benefits (Social Security, VA, disability, illness benefits) | Amount reasonably necessary for support |
| Support payments (alimony/child support) | Amount reasonably necessary for support |
| Public assistance | 100% |
| Wages | 75% or statutory multiplier |
| Workers’ compensation | 100% |
| Unemployment compensation | 100% |
| Tenancy by the entirety (limited circumstances) | 100% |
Common Federal Bankruptcy Exemptions
| Property Type | Federal Amount (Individual / Joint) |
|---|---|
| Homestead | $31,575 / $63,150 |
| Motor vehicle | $5,025 / $10,050 |
| Household goods (up to $800 per item) | $16,850 / $33,700 |
| Jewelry | $2,125 / $4,250 |
| Wildcard | $1,675 + up to $15,800 unused homestead |
| Tools of trade | $3,175 / $6,350 |
| Cash value of life insurance | $16,850 / $33,700 |
| Health aids | 100% |
| Social Security, unemployment, public assistance | 100% |
| Veterans’ benefits | 100% |
| Pensions & retirement accounts | 100% |
| Personal injury awards | $31,575 / $63,150 |
| Wrongful death and support-related awards | Amount needed for support |
Choosing between state and federal bankruptcy exemptions can significantly affect what property you can keep. A bankruptcy attorney can help determine which option best protects your home, car, and personal assets.
Steps and Local Requirements
Credit counseling. Before filing, you must complete a short credit counselling course from an approved provider. A second debtor education course is required before discharge.
Means test. To qualify for Chapter 7, your household income must be below Vermont’s median income or pass a means test comparing income and necessary expenses.
Filing fees. The filing fee is $338 for Chapter 7 and $313 for Chapter 13. If you can’t pay the fee all at once, you can request to pay in installments or apply for a waiver.
Meeting of creditors. About a month after filing, you’ll attend a brief “341 meeting.” This is not held before a judge. Instead, a bankruptcy trustee will confirm your identity and review your financial paperwork.
In Vermont, meetings are typically held virtually or in person in either Burlington or Rutland, based on where you live.
Local Rules and Forms. The Vermont bankruptcy court has its own local rules and required forms in addition to the federal bankruptcy rules and forms. Following them carefully helps your case move smoothly. An attorney can guide you through these requirements.
What This Means for You
Filing for bankruptcy in Vermont can provide a fresh financial start and immediate relief from creditor pressure. The process stops most lawsuits, foreclosures, repossessions, and wage garnishments.
Most filers keep their homes, vehicles, and personal property. Because bankruptcy involves complex eligibility rules, strict deadlines, and local procedures, it’s best to consult an experienced bankruptcy attorney before filing.
An attorney can help you:
- Decide whether Chapter 7 or Chapter 13 is best for your situation
- Choose exemptions that best protect your property
- Complete credit-counseling and education requirements
- File all forms accurately and meet local deadlines
With proper preparation and legal guidance, bankruptcy can offer a fresh financial start and a path toward long-term stability.
