Rhode Island Bankruptcy Exemptions and Law

For most people, filing bankruptcy is a last-resort option. Not only does bankruptcy damage your credit, but it can also put your assets at risk. To help, Rhode Island offers bankruptcy exemptions that help protect your real and personal property.

Those who file bankruptcy may be in over their heads in debt, but that doesn’t mean they don’t own homes, motor vehicles, and other personal property. This can cause concern when filing Chapter 7 bankruptcy for fear that the bankruptcy trustee will sell their assets to pay their secured and unsecured creditors. While this is certainly a possibility in any bankruptcy case, both federal and state laws offer exemptions to people who file bankruptcy.

This article examines Rhode Island bankruptcy law, including the available bankruptcy exemptions. It also covers the main types of bankruptcy and explains how you can qualify for a Chapter 7 or Chapter 13 bankruptcy case.

If you’re considering filing bankruptcy but aren’t sure if it’s the best option, contact a Rhode Island bankruptcy attorney. They’ll review your financial situation, explain your options, and ensure you take full advantage of the exemptions available to you under Rhode Island law.

Types of Consumer Bankruptcy in Rhode Island

Federal law recognizes two main types of personal bankruptcy: Chapter 7 and Chapter 13. The type of bankruptcy you file depends primarily on whether you want to eliminate your debt or restructure it. In a Chapter 7 bankruptcy case, the bankruptcy court discharges most or all of your debt.

In a Chapter 13 case, the bankruptcy trustee works with you and your creditors to restructure your debt by negotiating a three-to-five-year repayment plan. While the U.S. Bankruptcy Court may discharge some of your debt in a Chapter 13 bankruptcy, this isn’t always the case. It will depend on the type and amount of debt you include in your bankruptcy petition.

Understanding the differences between Chapter 7 and Chapter 13, including the eligibility requirements for each, can make it easier to choose the right option for you. Let’s take a closer look at each type.

Chapter 7 Bankruptcy Case

In a Chapter 7 bankruptcy, a trustee reviews your debts and assets. If everything’s in order, they’ll recommend that the bankruptcy judge discharge unsecured debts. Some of your secured debts may be discharged as well, but it depends on the specifics of your case. You may need to either surrender assets or keep the collateral and reaffirm your loan with the lender.

Some of the more common types of debt discharged in a Chapter 7 bankruptcy include:

• Credit card debt
• Personal loans
• Payday loans
• Medical bills
• Past due utility bills
• Past due rent (rent that was due before you filed your bankruptcy petition)

Many legal experts refer to a Rhode Island Chapter 7 bankruptcy case as a liquidation bankruptcy. You liquidate your debt and, sometimes, your assets as well. The court will rarely, if ever, discharge post-petition rent that becomes past due. You are expected to keep up with your rent and other monthly bills once bankruptcy proceedings begin.

While Chapter 7 can give you a financial fresh start, it comes with costs. Even if you don’t lose any assets, your credit rating will be negatively affected.

Chapter 13 Bankruptcy Case

In a Chapter 13 case, the filer is seeking a manageable payment plan for their debts. Filing bankruptcy can create a viable plan, allow them to stay in their home, and stop aggressive debt collection activity.

When filing a Chapter 13 bankruptcy case, you must provide the trustee with a list of your debts and assets. The trustee then reviews your income and basic living expenses. Your disposable income is then used to pay your creditors.

Chapter 13 bankruptcy allows you to spread your debts out over a three-to-five-year period, during which you’ll make monthly payments to the trustee. The trustee distributes this money to your creditors in order of seniority.

The order in which your creditors receive payment in a Chapter 13 is as follows:

• Secured creditors (Mortgage company, auto lender, etc.)
• Priority unsecured creditors (Alimony, child support, tax debts, etc.)
• Non-priority unsecured creditors (Credit card companies, loan companies, etc.)

Once you complete your repayment plan, the trustee will determine which debts the court should discharge, which ones you will continue paying, and which ones are deemed settled or paid in full. While child support and alimony are non-dischargeable debts in a Chapter 7 bankruptcy, you can include past-due support obligations in your Chapter 13 repayment plan.

Are There Debts That Are Non-Dischargeable in Bankruptcy?

Some debts aren’t dischargeable in bankruptcy, regardless of the chapter. Filing bankruptcy to rid yourself of overwhelming student loans is extremely unlikely to work, as bankruptcy courts rarely discharge them. Other non-dischargeable debts in your Rhode Island bankruptcy include:

• Alimony
• Child support
• Most recent tax debts
• Other domestic support obligations
• Criminal restitution
• Debts from fraud or misconduct
• Debts arising from luxury goods and services
• Reaffirmed debts
• Personal injury judgments arising from a DUI
• Government and civil fines and penalties

For the most part, bankruptcy won’t provide debt relief for these obligations. The bankruptcy process is meant to help people seek relief from traditional debts they incur in good faith.

After you submit your bankruptcy petition, you must attend something called a “341 Meeting of Creditors.” This is where the trustee and your creditors can question you about your debts, assets, and income as they relate to your bankruptcy filing. Creditors can object to the court’s discharging their debt as part of your bankruptcy. If the judge allows them to file a formal objection, they must do so through a separate, adversary proceeding.

Eligibility Requirements for Bankruptcy Under Rhode Island Law

To file bankruptcy, you must meet certain eligibility requirements. These differ between the two types of bankruptcy cases.

To qualify for Chapter 7 bankruptcy, you must pass the “Means Test.” This requires you to show that your income is less than your state’s median household income. As of 2026, the median incomes for Rhode Island are as follows:

• One-person household: $77,653
• Two-person household: $98,736
• Three-person household: $119,419
• Four-person household: $137,479

If your household exceeds four people, add $11,100 for each person. As long as your income falls below the above thresholds and you file the proper bankruptcy forms, you should qualify for a Chapter 7 in Rhode Island.

The requirements for Chapter 13 are markedly different. You must prove the following to file a Chapter 13 bankruptcy petition:

• Your total secured and unsecured debt must fall below the maximum thresholds set by federal law, 11 U.S.C. Section 109(e). These thresholds are as follows for 2026:
  • Secured debt maximum: $1,580,125
  • Unsecured debt maximum: $526,700
• You have sufficient regular income to pay your monthly payments during your repayment plan

As long as the debts you list on your Schedules D, E, and F are below the above totals, you should qualify for Chapter 13. Chapter 13 will also negatively affect your credit rating, but not as severely as Chapter 7 will.

Where Should You File Your Rhode Island Bankruptcy Case?

If you plan to file for bankruptcy, you must do so in one of the federal courts that handles bankruptcy cases. In Rhode Island, this means the U.S. Bankruptcy Court for the District of Rhode Island in Providence. The court address is:

6th Floor

380 Westminster Street

Providence, RI 02903

You can file your case either online or in person at the courthouse. After registering online, you can upload your forms and check the status of your case through the Electronic Case Filing (ECF) system.

The filing fee for a Chapter 7 case is $338, while it costs $313 to file Chapter 13. If you can’t afford the filing fee, request a fee waiver from the court. You can also ask to pay the fee in four equal installments.

Immediate Benefits of Filing a Rhode Island Bankruptcy

While it won’t be easy, filing Chapter 7 or Chapter 13 bankruptcy offers long-term benefits. Filers will also appreciate the effects that start right away.

Some of the immediate benefits of filing bankruptcy include:

• The automatic stay protects you from collection action
• You can work out a more reasonable payment arrangement with your creditors (Chapter 13)
• You can avoid such problems as foreclosure and repossession
• You get a fresh start (especially with a Chapter 7 bankruptcy)

These are a tremendous aid to filers. Let’s take a closer look at each one.

The Automatic Stay

The moment you file bankruptcy and the court assigns you a case number, the automatic stay kicks in. The automatic stay is a legal mechanism by which creditors are prohibited from taking any collection action against you.

The automatic stay applies in both Chapter 7 and Chapter 13 bankruptcy cases. It stays in effect until your bankruptcy is complete. For a Chapter 7 bankruptcy, your case concludes when the judge issues your discharge. With a Chapter 13 case, it ends when you complete your repayment plan.

Some of the adverse action creditors must refrain from taking under the automatic stay include the following:

• Civil lawsuit
• Foreclosure
• Repossession
• Wage garnishments
• Bank account levies
• Executing a lien
• Sheriff’s sale
• Eviction (in most cases)

If one of your creditors violates the automatic stay, let your Rhode Island bankruptcy attorney know. Not only are creditors prohibited from taking collection action against you, but they are also not allowed to contact you directly if you are represented by an attorney. This includes the endless barrage of threatening phone calls.

Negotiating a Reasonable Payment Plan for Large Debts

Once you file bankruptcy, creditors can’t contact you about payment. Instead, your bankruptcy lawyer and the trustee will negotiate with your creditors to settle your debt for a reduced amount. This is more common in a Chapter 13 case, as Chapter 7 filers seek discharge of their debts. If one of your creditors has the option of receiving a settlement out of the Chapter 13 plan or receiving small payments for three to five years, they may opt for the settlement.

Avoid Imminent Foreclosure and Repossession

In most cases, filing bankruptcy and triggering the automatic stay will prevent foreclosure and repossession. If you are behind on your mortgage payments and fear your lender will initiate foreclosure proceedings, bankruptcy may be a good option. The same holds true for your motor vehicle. If the finance company is threatening repossession, filing bankruptcy (either chapter) can stop this.

Sometimes a mortgage company or auto lender can convince the bankruptcy judge to let them follow through with foreclosure or repossession. This is rare, and your Rhode Island bankruptcy lawyer can help prevent it.

Achieving a Fresh Financial Start

Most bankruptcy filers want a fresh start once their bankruptcy case is over. Once the bankruptcy court discharges your debts or you’ve completed your payment plan, you’ll have a clean slate.

This also means you’re likely to encounter issues when trying to open new credit accounts. Most credit card companies, auto lenders, and mortgage companies will be reluctant to extend you credit in the months (or years) following your bankruptcy, especially in a Chapter 7 case. It may take a while for banks to trust that you can afford to make payments on a loan. However, had you not filed bankruptcy, you may be in debt for the rest of your life, hiding from creditors and begging for extensions on payment deadlines.

What Is a Bankruptcy Exemption?

Filing bankruptcy means you may lose some treasured assets, like artwork, jewelry, and retirement accounts. To help you stay in your house and keep some of your possessions, Rhode Island offers debtors certain bankruptcy exemptions. These exemptions allow you to exclude equity in your property from your creditors’ reach during bankruptcy.

When you file your bankruptcy petition, you’ll include a list of your debts and assets, along with a schedule that identifies any exemptions you are claiming. Rhode Island bankruptcy filers can choose between their state bankruptcy exemptions and the federal exemptions. When you first meet with a Rhode Island bankruptcy attorney, they’ll examine the exemptions you hope to claim in your bankruptcy petition to determine which is your best option.

Rhode Island allows debtors to choose between state and federal bankruptcy exemptions, which isn’t the case everywhere. In general, most people in Rhode Island choose the state’s generous homestead exemption. The Rhode Island homestead exemption is $500,000, well above the federal option. In addition, most other bankruptcy exemptions in Rhode Island are higher than the federal offerings.

Rhode Island Bankruptcy Exemptions

Using bankruptcy to get a fresh start can feel pointless if you can’t protect your real and personal property. Rhode Island law offers generous bankruptcy exemptions to make this possible.

The state bankruptcy exemptions in Rhode Island include:

• Home equity: $500,000 (You must meet certain criteria to claim the full $500,000)
• Motor vehicle exemption: $12,000
• Personal property: $9,600 (Furniture, appliances, clothing, etc.)
• Retirement accounts: Unlimited
• Jewelry: $2,000 total
• Wildcard exemption: $6,500
• Insurance payments: Unlimited
• Tools of the trade: $2,000
• Wildcard: $6,500

You can apply the wildcard exemption to any non-exempt property. For example, if you need to protect more than $12,000 in your car or SUV, you can apply all or part of the wildcard exemption to your motor vehicle. The same applies to other types of personal property, such as jewelry and artwork.

Special Considerations for the Rhode Island Homestead Exemption

You must meet certain criteria to qualify for the full $500,000 Rhode Island homestead exemption. If you can’t, you can file a Chapter 13 bankruptcy, claim the bankruptcy exemptions in your previous state (if possible), or opt for the federal homestead exemptions.

The basic requirements for claiming the Rhode Island homestead exemptions are as follows:

• Property must be your principal residence
• Must live in the house and intend to live there after bankruptcy
• Must have purchased the property at least 1,215 days (40 months) before filing bankruptcy
• Must be current on your mortgage (if applicable)

The requirement that you purchase the property at least 1215 days prior to bankruptcy stems from the federal “Short-Term Ownership Rule.” If you have owned your primary residence for less than 40 months at the time of your bankruptcy petition, the most you can claim in homestead protection is $214,000. This amount changes each year, depending on federal law.

Disclaimer: State laws change frequently due to new legislation, higher court rulings, and other means. While FindLaw strives to provide the most current information, consult a local bankruptcy attorney to confirm your state laws.

Seek Legal Advice From a Rhode Island Bankruptcy Lawyer

Filing bankruptcy can be a frustrating process. One way to make it easier is to retain a local attorney for bankruptcy help. An experienced bankruptcy lawyer understands the local laws and knows how to maximize the bankruptcy exemptions.

Unless you’re an expert in bankruptcy law, it’s a good idea to contact a Rhode Island bankruptcy attorney before you file your bankruptcy petition. They’ll examine your situation, explain your best move, and make sure your paperwork is properly prepared. A mistake in your filing costs you both money and time you might not have.