{"id":286879,"date":"2021-04-23T07:25:59","date_gmt":"2021-04-23T12:25:59","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/bankruptcy-laws-by-state\/vermont-bankruptcy-exemptions-and-law.html"},"modified":"2026-09-25T10:09:34","modified_gmt":"2026-09-25T15:09:34","slug":"vermont-bankruptcy-exemptions-and-law","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/vermont-law\/vermont-bankruptcy-exemptions-and-law.html","title":{"rendered":"Vermont Bankruptcy Exemptions and Law"},"content":{"rendered":"\n
\n

Vermont Bankruptcy Exemptions and Law<\/h1>\n\n
\n
\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

\n
\n
\n

Key Takeaways<\/h2>\n

Vermont<\/span> bankruptcy<\/span> exemptions<\/span> allow overwhelmed state residents to eliminate or restructure debt while protecting key assets. Filers choose between Chapter 7 liquidation<\/span> and Chapter 13 repayment plans<\/span> based on income limits and home equity. Filing for bankruptcy triggers an automatic stay<\/span> that immediately stops creditor harassment, wage garnishments<\/span>, and foreclosures<\/span>.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n

\n

Federal law<\/span> governs the\u00a0general bankruptcy process<\/span>. However, the U.S. Bankruptcy Code<\/a> allows states to adopt their own laws to help bankruptcy filers protect some or all of their assets from creditors.<\/p>\n

Regardless of which type of bankruptcy<\/span> you file, you can avail yourself of either state or federal bankruptcy exemptions<\/span>. It all depends on which set of exemptions<\/span> better fits your situation. How much the exemptions<\/span> help you also depends on whether you have any real or\u00a0personal property<\/span>\u00a0of\u00a0value.<\/p>\n

In this article, we will explain Vermont<\/span>\u2019s bankruptcy laws<\/span>, including the bankruptcy exemptions<\/span> available in the State of Vermont<\/span>. We will also briefly discuss the differences between Chapter 7 and Chapter 13 bankruptcy<\/span>, so you know which type of case you wish to file.<\/p>\n

If you\u2019re contemplating filing bankruptcy<\/span> but have questions about how it works, contact a Vermont<\/span> bankruptcy<\/span> attorney<\/span><\/a>. They\u2019ll review your financial situation and guide you through the bankruptcy process<\/span>.<\/p>\n

Types of Bankruptcy in Vermont<\/strong><\/h2>\n

There are two types of personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy<\/span>. The type of bankruptcy<\/span> you file will impact the exemptions<\/span> you claim.<\/p>\n

A Chapter 7 bankruptcy<\/span><\/a> is ideal for debtors who want to eliminate their debt and start over. If you happen to own property, such as a home, you will have to choose between the federal and state exemptions<\/span>.<\/p>\n

Normally, if you have equity in your home, you will sell your house and use the proceeds to pay off your creditors. This is why many people refer to a Chapter 7 <\/span>bankruptcy<\/span> case<\/span> as a \u201cliquidation<\/span> bankruptcy.\u201d<\/p>\n

In a Chapter 13 <\/span>bankruptcy<\/span> case<\/span><\/a>, a debtor commits to a repayment plan<\/span> that lasts for three to five years, depending on the person\u2019s income. This is why this type of bankruptcy<\/span> is often known as a reorganization<\/span> bankruptcy.<\/p>\n

Now, in a Chapter 13 bankruptcy<\/span><\/a>, you would normally continue to make payments toward your mortgage and car loan. However, if you have a ton of home equity, your creditors may demand that you sell your property or create a repayment plan<\/span> to pay them.<\/p>\n

The good news is that, regardless of which type of bankruptcy<\/span> you file, there are exemptions<\/span> available to you. We will discuss the details of the Vermont<\/span> exemptions<\/span> below. However, know at the outset that the state exemptions<\/span> in Vermont<\/span> are much more generous than the federal homestead <\/span>exemption<\/span>.<\/p>\n

The Automatic Stay Protects You During Bankruptcy Proceedings<\/strong><\/h2>\n

The moment you file your bankruptcy petition<\/span>, something called the \u201cAutomatic Stay<\/span>\u201d begins. The automatic stay<\/span><\/a> prohibits your creditors from pursuing collection efforts<\/span>. For example, if your mortgage company was moving toward foreclosure<\/span> on your property, they will have to stop all foreclosure<\/span> proceedings during the bankruptcy.<\/p>\n

The same is true for other collection actions, including:<\/p>\n