If you own your home and are scared to file bankruptcy because you fear you may lose your home, you’re not alone! Many people are hesitant to consider bankruptcy because of the risks it may pose to their home and it is frequently one of the most common questions we are asked. Our homes are where we build our lives and it can be scary to consider the possibility of losing what you have worked so hard for! Fortunately, with a bankruptcy, there are ways to protect your home.

It can be extremely scary to fall behind on rent payments, but it’s important to know that you aren’t alone and you have options! If you are behind on rent to a current landlord or if you owe a previous landlord rent from a prior residence, bankruptcy may be able to help you!

Having debt can be a stressful, overwhelming event. It can make it feel like you’re drowning and like you’ll never be able to get in front of it. However, bankruptcy is a positive event that can help clear out that debt and help you get your life back. 

A bankruptcy petition is the formal legal document that initiates a bankruptcy case in federal bankruptcy court. By filing a petition, an individual or business formally requests relief under the U.S. Bankruptcy Code due to an inability to repay outstanding debts.

When looking for relief from creditors or overwhelming debt, you are at many times either presented with a debt consolidation program or filing for consumer bankruptcy.

One of the most important protections available to individuals who file for bankruptcy is the automatic stay. As the name suggests, it automatically goes into effect the moment a consumer bankruptcy case is filed, without the need for a court order.

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. 

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 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%. 

While there are a few different types of bankruptcy cases, our firm only files chapter 7s and chapter 13s. A chapter 13 bankruptcy case is a restructuring/payment plan, with the discharge being granted at the end. The payments cannot be less than 36 months or more than 60 months. 

If you have a threat of wage garnishment or are currently being garnished, you may be thinking of turning to bankruptcy to stop the garnishment. The bankruptcy automatic stay goes into effect the day your case is filed. The automatic stay is what tell your creditors they cannot collect or enforce debt collection efforts, including garnishments. 

The median income for your household size is used in a bankruptcy case to determine which chapter of bankruptcy you qualify for, either a 7 or a 13 and whether you are a three or five year bankruptcy plan. Each state has set amounts for the median income, dependent on household size.

The trustee is another attorney who is assigned to your case by the US Trustee to represent the bankruptcy estate. The trustee is the person who administers your estate and distributes any funds that come in during your case. They also make sure what you said in your bankruptcy case is truthful and correct and verify the information you provided. You will meet with the bankruptcy trustee at the 341 hearing, usually about 4 to 6 weeks after your case is filed.

When you decide you want to file a bankruptcy case you can either file with an attorney or file pro se, unrepresented. 

When a bankruptcy case is filed, you list all of your assets, whether you have them now or are just entitled to them at the time of filing. You will list assets from real estate you own, all the way to potential claims or causes of actions and everything in between. It is important when you file bankruptcy that your assets are valued properly. You do not want to under value the assets you have, but you also do not want to over value them. 

You may hear the term domestic support throughout your bankruptcy case. For example, during the initial consultation your attorney may ask about it, the trustee will ask if you pay a court ordered agreement during your 341 hearing, or at the end of your case in a chapter 13 you will be asked if you are current on payments. What is domestic support?