Bankruptcy in Rhode Island
Bankruptcy is a federal process that allows debtors to find relief from debt or financial obligations that the debtors can no longer meet. Bankruptcy also allows debtors to repay creditors through asset liquidation or reorganization and payment plans. The Federal Bankruptcy Code provides options for different types of bankruptcy cases. A debtor may file the type of case that best addresses the debtor’s needs and income level.
What are Rhode Island Bankruptcy Records?
Bankruptcy records consist of documents generated in the course of bankruptcy cases. State courts cannot hear bankruptcy cases because bankruptcy is a federal process. Federal courts have exclusive jurisdiction over bankruptcy cases. Each district in the United States has a bankruptcy court. Rhode Island has only one federal bankruptcy court, called the United States Bankruptcy Court for the District of Rhode Island. The court has just one location in Providence.
The US Bankruptcy Court Clerk maintains bankruptcy court records. Interested parties may submit records requests to the Clerk in person, through email, or over the phone. The US Bankruptcy Court in Rhode Island also makes bankruptcy records available online and through automated voice systems. Some third-party websites host public bankruptcy information. Interested parties may obtain available information from the websites.
What do Rhode Island Bankruptcy Records Contain?
Bankruptcy records in Rhode Island contain documents generated in the course of a bankruptcy case, including pre-filing and post-filing processes. Before filing for a bankruptcy case, a petitioner must complete certain steps such as means-testing, and credit counseling. Bankruptcy records contain information about these processes. Records of post-filing processes, such as debtor education courses are also included in bankruptcy records. Other documents in bankruptcy records include transcripts, forms, petitions, notices, course completion certificates, and financial information. There are different types of bankruptcy cases, and each type may involve different forms or documentation. Typically, a requester can find the following in bankruptcy records:
- Bankruptcy case number
- Filing date
- Case disposition
- Debtor’s name and address
- A comprehensive list of creditors and amount owed to each creditor
- Debtor’s financial information, including bank statements and income statements
- Debtor’s employment and income information
- A list of the debtor’s assets and liabilities, including real property
- The assigned trustee
- Judge’s name
Are Bankruptcy Records Public Information?
Bankruptcy records are public information. Interested parties may request bankruptcy records from the US Bankruptcy Court Clerk or through other channels that the court provides. Under the Freedom of Information Act (FOIA), documents that any government agency creates or maintains are public information. This is to encourage transparent governance practices and to keep the public informed.
Record seekers may also obtain bankruptcy records from third-party websites. These non-governmental data platforms often come with tools that help simplify the search for single or multiple records. However, record availability on third-party sites tends to vary because they’re independent of government sources. Most third-party sites require some information to process a search. Record seekers may need to provide:
- A bankruptcy case number (if known)
- The name of the debtor on record
Bankruptcy in Rhode Island
Bankruptcy in Rhode Island is a court process authorized by the U.S. Bankruptcy Code and governed by federal and local rules to help insolvent parties that are unable to pay their creditors. Available to individuals, spouses, municipalities, and companies, this process may involve debtors repaying or discarding debts through liquidation or reorganization to get a mostly clean slate free from outstanding financial obligations.
State courts in Rhode Island have no jurisdiction over bankruptcy cases, but federal courts have authority over the case, specifically the U.S. Bankruptcy Court in Rhode Island. Interested persons may start the procedure by filing a petition with the court. However, there are several forms of bankruptcies in the Bankruptcy Code, such as Chapter 7, Chapter 11, Chapter 13, and others. Bankruptcy court records like dockets, transcripts, and entire case files may contain information on the bankruptcy process and copies of filed petitions, statements, schedules, certificates, and other bankruptcy forms.
How to Get Rhode Island Bankruptcy Records
The US Bankruptcy Court Clerk in Rhode Island maintains bankruptcy records. Interested parties may obtain bankruptcy records from the public access terminals at the clerk’s office, which is located at:
US Bankruptcy Court
District of Rhode Island
380 Westminster Street,
Providence, RI 02903
Requesting parties can get bankruptcy records over the phone by calling (401) 626-3100 or through the Automated Voice Information System (VCIS). To use the automated system, users must have the bankruptcy case number, the debtor’s full name, social security number, or taxpayer identification number. The user must also have a touch-tone phone. The VCIS provides limited bankruptcy case information, including:
- 341(a) meeting date, time, and location
- Debtor's attorney's name and phone number
- Assigned Judge's name
- Case status
- Trustee's name
- Case chapter
- Case disposition
- Discharge and closing dates
US bankruptcy courts provide bankruptcy records through PACER. Persons interested in obtaining bankruptcy records through the system must register for an account. Electronic access to court records is available at $0.10 per page. For users who do not exceed $30 in a quarter, the fee will be waived. Persons who cannot access or afford to use PACER may send record requests to the Clerk’s office by email at firstname.lastname@example.org.
How do I Find Out if My Bankruptcy Case is Closed in Rhode Island?
For cases filed from 1998 till date, interested parties may find out the status through PACER. Users must register to use the system and pay $0.10 for every search page. PACER usage is billed quarterly, and only users who spend more than $30 will be charged. Requesting parties can also obtain case status information by emailing the Bankruptcy Clerk’s office at email@example.com. Electronic copies of bankruptcy records are available by email at no charge. The Clerk’s office provides record search assistance or case status information over the phone; requesting parties may call (401) 626-3100. The US Bankruptcy Court Clerk’s office has public access terminals. Interested parties may obtain case status information from these terminals and print copies at $0.10 per page. The court’s CM/ECF system also provides case status information to registered users.
For cases filed before 1998, interested parties may obtain status information directly from the National Archives (NARA) online or by mail. Requesting parties can also request bankruptcy records from NARA with the court’s assistance. There are no electronic copies of records filed before 1998, so NARA sends scanned copies of such records. The court may request a SmartScan service from NARA on behalf of the requesting party. However, SmartScan is only available for a maximum of 100 pages. Electronic retrieval of SmartScan documents costs $10. If the number of pages exceeds 100, the requesting party must have NARA ship the case record to the court. When the records arrive at the court, the requesting party must view the record within 30 days. After 30 days, the court will return the record to NARA.
Can a Bankruptcy be Expunged in Rhode Island?
Bankruptcy is a federal process guided by federal laws and therefore, state record laws do not apply. The Federal Bankruptcy code does not provide for expungement, so it is not possible to expunge bankruptcy records in Rhode Island. However, it is possible to seal bankruptcy records. While expungement completely erases a record, sealing restricts public access to the record. Record holders may petition the court to seal a bankruptcy record. If the court grants the petition, only authorized persons, such as persons named on the record and legal representatives of such persons may access the record.
What Is the Downside of Filing for Bankruptcy in Rhode Island?
Filing bankruptcy may have several negative impacts on the debtor, one of the fastest being the loss of credit cards and other borrowing privileges like home loans and mortgages. Typically, debtors have to list credit card accounts in their bankruptcy paper whether there is an outstanding debt or not, and the bankruptcy automatically cancels all contracts, including credit cards, loans, and lease agreements. Consequently, the credit card company shall cancel the card, same with other creditors.
Similarly, a debtor may find it challenging to get loans or other credit options. This may be due to court restrictions that limit debtors’ ability to get loans (without court approval) before discharging debts or because of credit reporting companies who collect and report bankruptcies to various credit providers, following the Fair Credit Reporting Act. These companies gather bankruptcy information directly from court records and can show this in the individual's credit report for up to ten years, and the bankruptcy status may discourage potential creditors or lead to higher interest rates.
In relation to this, debtors may lose points in their credit score depending on their pre-bankruptcy credit situation. For instance, previously high credit scores from 740 and above may lose up to 240 points, and average points may drop by 130-150 points. A low credit score can also discourage rental property owners, employers, and insurers who check credit reports. However, previously low credit scores may increase by some points, filers can rebuild credit scores, and individuals may convince potential employers, landlords, or insurers with other mitigating factors that may encourage approval.
Another downside to filing bankruptcy is the cost. Debtors have to pay filing fees, attorney fees, court charges, and other related expenses incurred during the bankruptcy process. Some bankruptcy processes may also be tedious and can take years before discharge, not to mention that not all debts are dischargeable with bankruptcy. Hence, filers will still have to find a way to settle student loans, spousal or child support, and criminal fines.
Lastly, some specific procedures have their pros and cons. For instance, persons who file Chapter 7 bankruptcy are likely to lose non-exempt properties, while entities who file Chapter 11, 12, 13, or 15 bankruptcies have to go through a more complex procedure with a delayed debt-relief period.
What Is Chapter 11 Bankruptcy in Rhode Island?
As per the U.S. Bankruptcy Code, Chapter 11 bankruptcy in Rhode Island is a court process that helps insolvent parties pay outstanding debts through reorganization. Commonly used by businesses and individuals with substantial assets and debts, this chapter provides debtors a means of getting debt repayment while remaining in control of properties, assets, or business operations.
Under this chapter, debtors can maintain assets, restructure their debts, create a plan to increase profits, and repay debts within a specified period. The process also allows debtors to reject or assume contracts and sell certain assets without a lien. However, filing a Chapter 11 bankruptcy requires the debtor to submit a reorganization plan and disclosure statement, which will provide a summary of assets, liabilities, business profit plans, and custom repayment methods.
Reorganization is a powerful tool that helps debtors pay less through classifying claims, adjusting loan terms, and determining who will be paid in full or percentage amount. As a result of the complex procedure, Chapter 11 often takes months to file, while repayment and discharge may take six months to two years.
Companies with large debts and assets who wish to maintain operations may choose to file under Chapter 11 to avoid the liquidation process involved in a Chapter 7 bankruptcy. Persons whose debts surpass the debt limit for Chapter 13 bankruptcy may also file this form of bankruptcy. Generally, stock and commodity brokers may not file for relief under this chapter. Furthermore, the court requires a debtor to complete a credit counseling class within the past 180 days of filing
Usually, Rhode Island bankruptcy records shall be available until the court removes or seals them from public access.
What Is Chapter 7 Bankruptcy in Rhode Island?
Under Chapter 7 of the U.S. Bankruptcy Code, debt relief is provided through liquidation. Unlike other bankruptcy relief options available authorized by federal laws, this procedure does not involve reorganization or the provision of a repayment plan. Instead, insolvent parties opt for quicker relief through the sales of non-exempt assets and the use of proceeds to repay creditors, followed by discharge of certain debts in compliance with the Code. However, this means that debtors are at the risk of losing non-exempt property, except in no-asset cases.
Individuals, corporations, partners, or other business entities may file Chapter 7 bankruptcy but must pass a means test to determine if the debtor has enough income to settle debts under Chapter 13 bankruptcy. The court also uses the means test to find out if the filing is presumptively abusive i.e. the debtor is trying to qualify for Chapter 7 by subtracting higher-than-average expenses.
Chapter 7 bankruptcy also involves debtors attending a meeting of the creditors where they will answer questions on the accuracy of the provided information. Generally, the debtor receives a discharge order which frees the filer from certain financial obligations. Chapter 7 bankruptcy records shall be publicly available unless sealed or removed by court order.
What Is Chapter 13 Bankruptcy in Rhode Island?
Chapter 13 bankruptcy in Rhode Island is a legal procedure that enables individuals, self-employed persons, and owners of unincorporated businesses to repay debts with regular income. Debtors who file this type of bankruptcy can maintain their property but have to file a repayment plan that proposes terms for settling debts through monthly or biweekly installments within three to five years.
Eligibility requirements for Chapter 13 bankruptcy include:
- Secured and unsecured debts not exceeding $419,275 and $1,257,850, respectively
- Sufficient disposable income to cover the biweekly or monthly payment
- Copies of tax returns for most recent and prior tax year
- The debtor does not have any bankruptcy petition dismissed in the preceding 180 due to court order violation or failure to appear in court
- Debtor received credit counseling during the preceding 180 days of filing
The debtor must begin making payments to the trustee within 30 days of filing a Chapter 13 bankruptcy and continue making regular payments once the court confirms the plan. If the debtor fails to pay the planned amount due to changes in the financial status, the court may convert the case to a Chapter 7 bankruptcy or dismiss the case. Otherwise, debtors can discharge debts as long as they completed all payments in compliance with the Bankruptcy Code.
Chapter 13 bankruptcy records in Rhode Island are publicly available except when exempted from disclosure by law or court order.
What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Rhode Island?
The major difference between Chapter 7 and Chapter 13 bankruptcy is how debt-repayment happens. The former involves debt repayment through liquidation – selling off the debtor's non-exempt properties to pay off debts, while the latter deals with debts through reorganization –restructuring debts and planning monthly payments. As a result, debtors may lose properties under Chapter 7 or keep assets and possibly suffer long-term financial constraints due to strict budgeting under Chapter 13.
Due to the simplicity of Chapter 7 bankruptcy, the process is faster and takes around five months to discharge, whereas Chapter 13 uses the debtor's disposable income to repay debt and takes three to five years to discharge. In Chapter 13 bankruptcy, reorganizing debts, filing a repayment plan, and getting court approval may also take more time when compared to the Chapter 7 filing process.
Furthermore, Chapter 13 has more eligibility criteria, including a secured and unsecured debt limit and wage earner restriction (only individuals or couples may file). On the other hand, any individual or business may file a Chapter 7 bankruptcy after passing a means test and satisfying other basic requirements. Lastly, Chapter 7 bankruptcy discharges more debts than Chapter 13 bankruptcy. However, Chapter 13 allows for reduced debts through restructuring practices like lowering interest rates or reducing the secured debt amount to the current value of the secured property/collateral.
What is Bankruptcy Protection in Rhode Island?
Bankruptcy protection in Rhode Island refers to legal provisions that protect debtors from creditor’s collection activities and debt-related actions. As per the U.S. Bankruptcy Code, debtors are protected by the Automatic Stay under Section 362. This automatic stay prevents creditors from carrying out or continuing collection actions like repossession, lawsuits, wage garnishment, foreclosure, and certain other activities related to the debtor's overdue financial obligations.
Effective immediately after the court files the bankruptcy petition, the stay allows debtors to get space and time to prepare for the bankruptcy process and gives equal ground to all creditors so that one creditor does not get repaid before others. The court shall issue a bankruptcy notice to all creditors, and the debtor may sue any creditor who willfully ignores the stay.
However, there are some limitations and exceptions to the automatic stay, including:
- Creditors can file a petition for the court to lift the stay with a valid reason.
- Some activities shall not stop with the automatic stay, such as tax audits, criminal actions, domestic support obligations, and actions by licensing agencies.
- The debtor cannot repossess properties foreclosed before the petition was filed.
- Repeat filings and prior dismissed petitions in a year can lead to a lesser stay period.
What Are Rhode Island Bankruptcy Exemptions?
Bankruptcy exemptions in Rhode Island are provisions of the law that restrict creditors or trustees from selling certain assets to settle debts and help determine which properties the debtor can protect from liquidation. Rhode Island allows eligible residents to choose within state and federal exemptions. The state exemptions include:
Homestead exemption: Up to $500,000 in principal residence land and buildings
Vehicle exemption: Up to $12,000 in motor vehicles
Wildcard exemption: Up to $6,500 in any assets
- Life insurance payments, as long as the clause prevents proceeds from being used to pay creditors
- Temporary disability insurance
- Fraternal benefits
- Benefits or proceeds from accident or sickness insurance properties
Personal property exemption:
- Up to $9,600 on household goods, furniture, beds, beddings
- Up to $300 in books and bibles
- Up to $50 in consumer cooperative holdings
- Up to $2,000 in jewelry
- Debts secured by bill of exchange or promissory note
- Tuition savings account and prepaid tuition program
- Burial plot
Tools of the trade exemption:
- Up to $2,000 in working tools
- Library of practicing professional
- Sailor’s earned but unpaid wages
- Active military member’s earned but unpaid wages
- $50 in earned but unpaid wages
- Wages and salary of spouses or minor
- Earned was unpaid wages
- Wages paid by a fund providing relief providing or charitable organization
- Wages of persons receiving public assistance for one year after stopping relief
Pension and retirement exemption:
- IRA and ERISA-qualified benefits
- Pensions of private employees, police officers, firefighters, state and municipal employees
Public benefit exemption:
- Crime victims’ compensation
- Family assistance benefits
- General assistance or aid to aged, blind or disabled
- Worker’s compensation
- Unemployment compensation
- State disability benefits
- Veterans disability of sand when
- Wages and salary of a minor
- Business partnership property
Federal bankruptcy and non-bankruptcy bankruptcy exemptions are also available in Rhode Island.
What Are the Other Types of Bankruptcy in Rhode Island?
There are three other types of bankruptcy available in Rhode Island in compliance with the U.S. Bankruptcy Code: