Vermont Bankruptcy

The term “bankruptcy” provides a formal mechanism for eliminating or reorganizing debts when repayment is no longer feasible. It is a federal process, but in Vermont you may choose between Vermont's state exemptions or the federal exemption list.

Individuals are required to select either of the two schemes and apply it consistently. Residency rules generally apply before you may file bankruptcy in Vermont. To qualify for Vermont’s state list, residency rules require that you must have lived in the state for a minimum period of two years.

How to File Bankruptcy in Vermont

In order to stay compliant throughout the process of filing for bankruptcy, individuals are required to pursue certain steps. Interested parties may begin the process by completing a credit counseling (pre-filing) course and debtor education (post-filing) with approved providers. These courses are mandatory in all federal bankruptcy cases.

Gathering the necessary documentation helps facilitate the process. Filers are required to present records such as tax returns (last two years), six months of income or pay stubs, bank statements, a comprehensive list of assets or debts, real estate deeds, vehicle titles, and any lawsuits.

Deciding the chapter you want to file under is very important. You may choose your chapter and apply either the federal or state exemption scheme. Most individuals file under Chapter 7 (liquidation) or Chapter 13 (3–5-year repayment).

On the contrary, some individuals, or businesses utilize the exemption under Chapter 11. Other steps involve filing the petition and schedules with the U.S. Bankruptcy Court for the District of Vermont. While attorneys may file bankruptcy cases electronically, self-represented litigants are required to follow the clerk’s guidance.

Once filing is complete, it triggers an automatic stay, which stops most collection actions. During the filing process, a processing fee is typically required. Depending on the type of exemption (federal or state), you are required to pay the fees contained in the fee schedule. If eligible, you may request a fee waiver or an installment.

As part of the process, you are required to appear in person for the §341 meeting of creditors. Trustees may request that you answer specific questions relating to your finances. Also, to facilitate the process, you must respond to trustee or court requests until your case is discharged or your payment plan is confirmed.

Vermont Bankruptcy Types: Chapter 7, Chapter 13 & Chapter 1

Bankruptcy chapters offer solutions for financial hardship, with exemptions outlining protected property:

Chapter 7 (liquidation)

This chapter permits the discharge of qualifying debts. A court-appointed trustee may sell non-exempt assets to repay creditors. The type of exemptions you use typically determines which of your assets are protected.

Chapter 13 (repayment plan)

Individuals with regular incomes may opt for this chapter to pay their creditors. It enables the restructuring of debts over a period of 3 to 5 years and allows you to complete outstanding debts. The plan requires payments that reflect the value of a non-exempt equity based on the selected exemption scheme.

Chapter 11 (reorganization)

This is only used by businesses and some individuals with complex or higher debt profiles. Although operations continue, a plan is structured to ensure that debt is repaid.

Steps in Filing for Bankruptcy in Vermont

• Complete credit counseling
• Gather financial documents
• Choose Chapter 7, 13 or 11 and select Vermont vs federal exemptions
• File petition and schedules with the District of Vermont
• Pay filing fee or request relief
• Attend the §341 meeting
• Complete debtor education
• Monitor and respond to trustee/court communications

Vermont Bankruptcy Court and Record Access

Vermont has only one bankruptcy court, which operates out of two locations. This bankruptcy court serves the entire state and handles all federal cases, including fraud and disputes over a creditor's claim. The public may find the appropriate filing location and the procedures for accessing official records below.

Court Location

The U.S. Bankruptcy Court for the District of Vermont: The Clerk’s Office is headquartered in Burlington. Business hours are from 8:30 a.m. to 5:00 p.m., Mon–Fri. Hearings take place in either Burlington or Rutland based on your location. Vermont residents may schedule an in-person visit to the nearest location to access bankruptcy records:

Mailing Address:

The address below is where hearings are held in the Rutland location:

151 West Street

Rutland, VT 05701

For cases filed in Rutland, individuals may visit the staff directory for contact information and copy requests.

Record Access

To obtain access to case dockets and filings online, residents may visit PACER and the PACER Case Locator. To access records on PACER, you may register a user account online. The court’s website links directly to registration and how to use the PACER Case Locator if you do not know where the case is filed.

Limited case information is available for free via the Multi-Court Voice Case Information System (McVCIS) by dialing 866-(222)-8029. The Vermont court code is available on the court’s staff or VCIS page.