Operating a small business can be both a rewarding and challenging experience.  There are any number of factors that go into both creating and sustaining a small business, not least of which is ensuring that the business is adequately funded.  Because of this imperative, many small business owners take out loans to ensure that their business has a sufficient amount of operating capital, both when starting up, and when engaged in their ordinary course of their operations.  This leads to the necessary question; am I personally responsible for these debts?  

One of the most common myths surrounding bankruptcy is that it is harmful for everyone involved. People often associate bankruptcy with irresponsibility and dishonesty. Many people assume that bankruptcy causes widespread harm for individuals and creditors. While there can be bad actors on both sides, this is generally not the case. 

Something that people frequently wonder when considering the possibility of a bankruptcy filing is the extent to which bankruptcy will affect their ability to take out new loans post-filing.  Among the various types of loans that are considered under such circumstances, perhaps the most common that people may typically ponder are car loans.  In brief, the answer is that bankruptcy does not inherently limit your ability to take out a vehicle, as there is no provision of the bankruptcy code that prohibits you from incurring a new loan after filing.  However, there are still several other things to consider in practical terms when analyzing this, including the chapter of bankruptcy filed.

Something that many people ask themselves when contemplating the bankruptcy process is when the right time will be to file.  People may wonder if there is a specific amount of debt that would typically lead to a filing, or whether a creditor taking a specific action, such as bring a lawsuit for collections, is necessary prior to beginning the bankruptcy process.  The answer to these questions is simple; there is no single set of circumstances that dictates the best time to begin the bankruptcy process.  Rather, the best time to consider a bankruptcy filing is when you ready to free yourself of the burdens associated with overwhelming debts, and give yourself your life back. 

There are some topics you simply don’t want to discuss with your employer. Bankruptcy is often one of them. A common concern for those considering filing bankruptcy is whether their employer will receive notice they have filed. 

“Is Bankruptcy Right For Me?” – This is a question that is frequently asked by those who may be experiencing financial hardship or dealing with the burdens imposed by unmanageable debts.  To analyze this query we must first evaluate what bankruptcy is; which is to say we must consider both how the bankruptcy process works and the purpose that it serves.  With regard to the latter, bankruptcy is a legal process established under federal law that exists to provide relief to those who find themselves struggling with overwhelming debt. 

You ask, will I qualify for Chapter 7 Bankruptcy? And the answer is, yes, if your income is below the state’s median income and you do not have money left over after you pay your reasonable and necessary expenses. The idea of who qualifies to file Chapter 7 Bankruptcy (assuming you have not qualified a Chapter 7 Bankruptcy and received a discharge in the last 8 years) is largely based on your household income and expenses. 

Wage garnishments are one of the common reasons individuals decide to file bankruptcy. Wage garnishment is a process where a portion of your wages are withheld by your employer to pay off your debts. Wage garnishments can occur for different reasons such as unpaid debts like credit cards, personal loans, or child support. 

One of the primary element of any bankruptcy filing is something known as a means test.  It plays a pivotal role in determining a number of different things that all play a role in filing bankruptcy, including the chapter that may be filed, and in some cases, how long the bankruptcy itself will last.  The primary factor evaluated by the means test is income – specifically, income earned in the six months prior to filing.

Overwhelming or unmanageable debt can arise for a variety of reasons, and unfortunately, it can often arise due to a circumstance that can be difficult to predict or anticipate such as the loss of a job, the ending of a relationship or the occurrence of an unanticipated expense.  Bankruptcy can be an excellent resource to address such a situation, and is often one of the first solutions explored by anyone who finds themselves in such a circumstance.  However, for those who have already availed themselves of the bankruptcy process to deal with a similar situation previously, it is common to wonder whether bankruptcy can be pursued for a second time to deal with their current circumstances.  

Exemptions protect your assets in bankruptcy. When you file bankruptcy you have to list all of your assets, you then will also list an exemption to protect the asset from the bankruptcy estate, if one is available to you. In Minnesota you can pick between federal and state exemptions, this is not the case for every state though. Your attorney will help you go through your assets and which exemptions to apply. 

A new year brings with it a sense of optimism, a concept of new beginnings that inspires positivity and hope for the year to come.  For many, it also represents the opportunity for a fresh start, a chance to free ourselves from the burdens that we might be carrying with us so that we can move forward into the coming year unencumbered.  Beyond the metaphorical implications of this idea, the New Year can also offer be the perfect time to free ourselves from the burdens imposed by unmanageable debt for any who might find themselves struggling with such a situation.  

While there are a few different types of bankruptcy cases, our firm only files chapter 7s and chapter 13s. A chapter 7 bankruptcy case is 90 days long, with the court ordered discharge being granted at the end of the 90 days. 

When going through the bankruptcy process, it is very common to receive something known as a “reaffirmation agreement” from a lender.  Generally, these agreements will be sent out by lenders with whom you have a secured loan, such as a mortgage, a car loan, or a home equity line of credit.  These agreements are essentially written requests for a debt to be excluded from the bankruptcy discharge.  Should you choose to sign a reaffirmation agreement, it would filed with the court after its completion, and a judge would then determine whether the debt in question should be reaffirmed and excluded from discharge. 

When we break it down, there are opportunities to rise above your current station in life, to do better than your parents, but if you already start out ahead of the curve, your chances of success are far higher.

When you file bankruptcy you have to list all of your assets, including those you may not have yet. For example, even if you have not filed your taxes or haven’t received the refunds yet, you still have to list the tax refund as an asset in your case. When you list your tax refunds, you will list it as a pro rata estimate based on the date of filing. As an example, if your case is filed on December 12, the share of the tax refund belonging to you on the date of filing is about 95%.