{"id":286884,"date":"2021-04-15T14:05:27","date_gmt":"2021-04-15T19:05:27","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/bankruptcy-laws-by-state\/wyoming-bankruptcy-exemptions-and-law.html"},"modified":"2021-04-23T09:46:58","modified_gmt":"2021-04-23T14:46:58","slug":"wyoming-bankruptcy-exemptions-and-law","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/bankruptcy-laws-by-state\/wyoming-bankruptcy-exemptions-and-law.html","title":{"rendered":"Wyoming Bankruptcy Exemptions and Law"},"content":{"rendered":"\n
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Wyoming Bankruptcy Exemptions and Law<\/h1>\n
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\n By J.P. Finet, J.D.<\/a> | Legally reviewed by Bridget Molitor, JD<\/a>\n | Last updated\n
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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
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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

<\/a>Why File for Bankruptcy?
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If you have been overwhelmed by your debt and fear you can never pay it off, filing for bankruptcy could provide the help you need to get back on your feet financially. Bankruptcy offers a lifeline to those who are drowning in debt by providing them with protection from creditors and bill collectors while they either pay down or eliminate their debts. Wyoming has also implemented its own rules on bankruptcy that could provide you with additional protection from creditors.<\/p>\r\n

Wyoming Bankruptcy Law<\/h2>\r\n

The U.S. Bankruptcy Courts are unusual in that, while they are federal courts, they allow states to decide what property their residents can keep in bankruptcy. Wyoming is one of the states that has chosen to establish its own rules<\/a> on property that is exempt from the bankruptcy process so you can use it to continue with your life after bankruptcy.<\/p>\r\n

Some states will give you the option of choosing between the federal bankruptcy exemptions<\/a> provided for in the U.S. Bankruptcy Code<\/a> and their state exemptions, but Wyoming does not. In Wyoming, you must use the state exemptions, even if the federal exemptions would allow you to protect more of your property. More on these exemptions below. First, it’s important for you to understand how bankruptcy works.<\/p>\r\n

<\/a>Chapter 7 vs. Chapter 13 Bankruptcy<\/h2>\r\n

When you file for personal bankruptcy, you will need to choose between filing under Chapter 7<\/a> and Chapter 13<\/a>. Both types of bankruptcy will help you get out of debt, but each will resolve your debt problems differently. This means the chapter you choose will have a major impact on what property you can keep during bankruptcy.<\/p>\r\n

Chapter 7 bankruptcy is what most people think of when you mention bankruptcy. It is a \u201cliquidation bankruptcy" where the bankruptcy trustee can take all of the property you can’t protect with an exemption and sell it to repay your creditors. In return for giving up your non-exempt property, you will exit Chapter 7 nearly debt-free. Since most creditors receive only a fraction of what they are owed in a Chapter 7 case, there are strict rules to keep those who could otherwise pay their debts from filing under this chapter.<\/p>\r\n

Chapter 13 bankruptcy is a \u201creorganization" bankruptcy that lets people who have a steady income restructure most of their debts so they are paid off in three to five years. The payments are made under a repayment plan approved by the court and the plan can force some creditors to take less than they are owed. Homeowners often choose Chapter 13 over Chapter 7 because they will usually keep their homes.<\/p>\r\n

The Automatic Stay Provides Protection from Creditors<\/h2>\r\n

The automatic stay<\/a> issued by the court when you file for bankruptcy is a powerful tool that protects you from creditors while you resolve your debt problems through the bankruptcy process. The stay is issued regardless of whether you file under Chapter 7 or 13 and prohibits creditors from taking action to collect debts you owe, including harassing phone calls, mortgage foreclosures, and efforts to garnish your wages.<\/p>\r\n

The stay will give you the breathing room necessary to take stock of your financial situation and determine how best to proceed with your bankruptcy. If a creditor violates the stay by contacting you or taking any other action, the court may force the creditor to pay damages, including attorneys’ fees.<\/p>\r\n

Secured vs. Unsecured Debt<\/h2>\r\n

Not all debt is treated the same in bankruptcy so it helps to know which kind of debt you have and how much. As a general rule, nearly all of your debt will be split between secured<\/a> and unsecured<\/a> obligations. How your debt is classified is often an important factor in whether you choose to file under Chapter 7 or 13.<\/p>\r\n

Unsecured Debt<\/h3>\r\n

Unsecured debt describes a situation where you owe money to a creditor, but the creditor has no right to repossess your property if you fail to pay. Nearly everyone who files for bankruptcy has at least some unsecured debt, which is usually credit card debt, unpaid court judgments, or unpaid medical bills.<\/p>\r\n

Secured Debt<\/h3>\r\n

You have secured debt when a creditor has the right to repossess your property if you fail to repay them. This type of debt is often the result of a loan transaction where you put up some of your property as collateral for the loan, most often the property the loan was used to purchase. Common types of secured debts in personal bankruptcies are home mortgages and car loans.<\/p>\r\n

How Is Secured and Unsecured Debt Treated in Bankruptcy?<\/h3>\r\n

Filing for Chapter 7 bankruptcy can often discharge almost all of your unsecured debt. But some unsecured debt, like unpaid child and spousal support, cannot be eliminated.<\/p>\r\n

Secured creditors are in a better position to get repaid and you will need to pursue one of three options with regard to your secured debts:<\/p>\r\n