Welcome To The MN Bankruptcy Blog

Inside you will find over 500 helpful articles discussing the Chapter 7 & 13 Bankruptcy Process and other solutions for difficult financial situations.

 

Col Ovik

Col Ovik
Solving problems and helping people, that is what lawyers do, and I am so grateful that clients allow me the opportunity to help them.

Recent Posts

NON-EXEMPT ASSETS AND MY CHAPTER 13 BANKRUPTCY

Posted by Col Ovik on January 6

A chapter 7 bankruptcy is a liquidation bankruptcy, consequently non-exempt assets in a chapter 7 bankruptcy are liquidate or debtor may be able to purchase their non-exempt assets back from the bankruptcy estate. In a chapter 7 bankruptcy, the debtor has a limited amount of time to purchase back their non-exempt assets or relinquish the assets to the bankruptcy estate. If a debtor is unable to purchase back their assets from the estate or is unwilling to give up their non-exempts the debtor may consider filing a chapter 13. (Your attorney will let you know which assets in your case are non-exempt).

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IS EVERY CREDITOR LEGITIMATE

Posted by Col Ovik on January 2

Occasionally debtors will find themselves in a situation where they are continuously being hounded by creditors. The debts have been sold and resold and many times debtors are not even sure who they owe funds to anymore. Unfortunately, this can make those debtors vulnerable to scams. If a debtor receives a call from an aggressive creditor demanding payment and the creditor is offering a substantial discount the debtor may be tempted to take the deal-even though the debtor does not know the exact source of the debt.

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Mortgage Arrears And A Chapter 13 Bankruptcy

Posted by Col Ovik on December 9

Getting behind on your mortgage payments is not uncommon, but when the amount of the arrears (the amount you owe from the missed payments) is substantial it can be hard to get caught back up with your mortgage payments. There are many reasons people get behind on their payments: temporary job loss, divorce, medical issues. And sometimes working with the mortgage company to make arrangements to repay the missed payments can be daunting and frustrating especially if the mortgage company has already started the foreclosure process.

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All My Assets

Posted by Col Ovik on December 8

When you file bankruptcy you are required to list all of your assets on your bankruptcy petition.  In fact, you will be required to testify under oath that you have listed all of your assets and any interest you may have in an asset.

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Who Can File A Chapter 7 Bankruptcy

Posted by Col Ovik on December 2

Not everyone qualifies to file a chapter 7 bankruptcy. In order to curb perceived abuse, Congress modified the Bankruptcy Code. On April 20, 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act"). The Act was intended to address certain abuses of the bankruptcy process. Among the abuses identified by Congress was the easy access to chapter 7 liquidation proceedings by consumer debtors who, if required to file under chapter 13, could afford to pay some dividend to their unsecured creditors. 

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Will All My Debts Be Discharged In My Bankruptcy

Posted by Col Ovik on December 1

Not all debts are treated the same in bankruptcy. Unsecured debts are those debts that are not secured by collateral. Of course, secured debt remains secured to the collateral even in bankruptcy, but strictly speaking about unsecured debt-will it all be discharged in the bankruptcy?

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Bankruptcy And Divorce

Posted by Col Ovik on November 21

A bankruptcy and a divorce are both intensive processes that require a lot of financial disclosures. When trying to determine which process to start first an individual needs to consider their own unique situation. 

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A Simple Act | Col Orvik for Minnesota LifeBack Law Firm

Posted by Col Ovik on November 15

Yesterday, after I work, I exited the building and started my walk home, like I do every day. But, as I was leaving, I saw a young lady in distress sitting in the corner of the parking ramp. I did not immediately approach her. Part of me was thinking: do not get involved or she was being dramatic or was it even safe for me to approach her.

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How Can Cross Collateralization Affect My Bankruptcy in MN? | LifeBack

Posted by Col Ovik on November 10

Banking and financing with one institution is convenient, but there could be unforeseen issues with letting one institution handle all your financing needs. Banking with one institution does seem to be stress-free. You can easily pay all of your loans online and transfer funds easily, and in theory, you are often dealing with the same individuals time after time. But, what you may not have realized is if you have secured loans and unsecured loans with the same institution, the lender may have collateralized your new loans to the same collateral.

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Why Am I Asked About Receiving Inheritance During Bankruptcy in MN?

Posted by Col Ovik on November 2

During your bankruptcy you will be asked about the likelihood that you may inherit any property or money. Your attorney will likely ask you this question and the trustee will also let you know if you do inherit any funds during the bankruptcy you need to let the trustee’s office know. Why? Because the bankruptcy estate will have an interest in the inherited property.

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Chapter 13 Bankruptcy and Setoffs in Minnesota | LifeBack Law Firm

Posted by Col Ovik on October 29

When a creditor is owed a debt by the bankruptcy filer and the bankruptcy filer is owed a debt from the creditor and consequently creating a mutual obligation, the creditor can setoff the mutual debt. This means, instead of the creditor paying their debt to the bankruptcy filer the creditor can setoff (subtract) that amount from the amount owed to them by the bankruptcy filer.

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Beginning a Bankruptcy in Minnesota Can Be at Your Speed | LifeBack

Posted by Col Ovik on October 24

I have recently started running, actually, I have recently started running again. Running is one of those activities that I do not enjoy. But I make a point to do it because I work in an office and spend most of my day sitting.

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Homeowners Associations and Automatic Stay Violations in MN | LifeBack

Posted by Col Ovik on October 23

Issues with your homeowners association can be stressful. Homeowners associations have the power to place a lien on your property or foreclose. When you get behind in your association fees you are putting your property at risk.

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Why Do I Have to Disclose Asset Transfers During Bankruptcy in MN?

Posted by Col Ovik on October 13

When filing for bankruptcy you will have to disclose any transfers of assets you may have had in the last 2 years prior to filing. Assets include cash assets as well as other assets: vehicles, real estate, furniture, or retirement accounts. And you may be asked about assets transferred in the last six years, if the transfer involved a friend or family member.

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Staying Positive During Your Bankruptcy in Minnesota | LifeBack Law

Posted by Col Ovik on October 8

Recently, I started watching a new television series call Ted Lasso and I was quite wonderfully surprised. This is a show about positivity, kindness, and thoughtfulness. Even faced with the ugliest of characters, Ted Lasso continues his crusade of positivity.

This is a message we should all embrace. Many times I find myself passively watching some television show and the characters are awful to one another or some reality tv show that displays people at their absolute worst. At best, maybe I get a laugh from it, and at the worst, I walk away with a dampened outlook on human kind.

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The Dangers of Repaying Family and Friends Before Filing Bankruptcy

Posted by Col Ovik on September 30

It is tempting to repay friends and family members, after all, these are the people that were there for you when you were in a bind. So naturally, when you find yourself in a position to finally repay a friend or family member that is exactly what you are going to do. While this seems like the right thing to do, during a bankruptcy, it can lead to a lot of complications.

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Forgiven Debt and Tax Liabilities in Minnesota

Posted by Col Ovik on September 25

Under the Internal Revenue Code, the general rule is that the discharge of a debt is a form of gross income. The forgiveness of a debt does sound nice, but it does come with some consequences. For example, if a creditor forgives a debt of $20,000, you would have an additional $20,000 for taxable income. At a conservative tax rate of 15% you would owe an additional $3,000 in federal income taxes for that year.

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My Home in Bankruptcy - The Minnesota Homestead Exemption

Posted by Col Ovik on September 24

Schedules A/B of the bankruptcy petition requires the debtor to list and describe all real estate that the debtor has an interest in. This includes: life estates, remainderman interests, interests in mineral rights, and partial interests in real estate.

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The Minnesota Homestead Exception: Chapter 7 v. Chapter 13

Posted by Col Ovik on September 19

As a general matter, homestead exemptions are to be liberally construed in favor of the exemption. All presumptions are to be made in favor of preservation and retention of the homestead. This is good news for a bankruptcy filer who wishes to protect/exempt their homestead when filing bankruptcy.

The effect of claiming an exemption is to technically exclude property from the bankruptcy estate.

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Living With Positivity, Despite Adversity

Posted by Col Ovik on September 13

Recently, I started watching a new television series call Ted Lasso and I was quite wonderfully surprised. This is a show about positivity, kindness, and thoughtfulness. Even faced with the ugliest of characters, Ted Lasso continues his crusade of positivity. This is a message we should all embrace.

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What Are Forgiven Debts and Taxes in Minnesota? | LifeBack Law Firm

Posted by Col Ovik on September 5

Under the Internal Revenue Code, the general rule is that the discharge of a debt is a form of gross income. The forgiveness of a debt does sound nice, but it does come with some consequences.

For example, if a creditor forgives a debt of $20,000, you would have an additional $20,000 for taxable income. At a conservative tax rate of 15% you would owe an additional $3,000 in federal income taxes for that year.

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Watch Out for Good Deeds When Helping a Friend in Bankruptcy

Posted by Col Ovik on September 4

Everyone knows the old adage, no good deed goes unpunished, and this is also true in bankruptcy. So, while it may be noble to help out a friend or family member, it can also complicate your bankruptcy. Expensive gifts, gifted while you are insolvent can be a point of contention in your bankruptcy, but what about other good deeds: lending money, co-signing on loans, or taking out loans for someone else?

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Repayment of Loans Before Filing Bankruptcy in Minnesota

Posted by Col Ovik on August 19

It is tempting to repay friends and family members while before filing a bankruptcy. After all, these are the people that were there for you when you were in a bind. So naturally, when you find yourself in a position to finally repay a friend or family member that is exactly what you are going to do.

Unfortunately, repayments of loans to family members and close friends are considered preferential payments.

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What Chapter 13 Payments Will I Owe in Minnesota?

Posted by Col Ovik on June 28

When filing a Chapter 13 bankruptcy the number one question by potential clients is: what will be my monthly payment? There are many factors that are considered when determining a chapter 13 payment:

  • income,
  • necessary expenses,
  • non-exempt assets,
  • repayments to creditors in the 90 days prior to filing,
  • and repayments to friends and family members.
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Can I File Bankruptcy on Only One Creditor in Minnesota?

Posted by Col Ovik on June 24

Occasionally clients will tell me that they would only like to file bankruptcy on one or just a few of their creditors. While this is not entirely possible, there are some similar options.

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Why Am I Asked About Receiving Any Inheritance During Bankruptcy?

Posted by Col Ovik on June 17

During your bankruptcy you will be asked about the likelihood that you may inherit any property or money. Your attorney will likely ask you this question and the trustee will also let you know if you do inherit any funds during the bankruptcy you need to let the trustee’s office know. Why? Because the bankruptcy estate will have an interest in the inherited property.

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Limiting the Impact of the Bankruptcy on the Non-Filing Spouse in MN

Posted by Col Ovik on June 14

Bankruptcy provides an avenue for an individual to address their debt. It can provide a lot of relief. But, not everyone needs to or should file bankruptcy. What happens when only one of the partners in a marriage needs to file bankruptcy? The first question that needs to be addressed is, does the other spouse have any debt where it would make sense for them to file as well.

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Bankruptcy Planning for Non-Exempt Assets in MN

Posted by Col Ovik on April 8

When you find yourself on the brink of filing bankruptcy, you can do some bankruptcy planning, and you should. When filing a chapter 7 bankruptcy, it is important to remember this is a liquidation bankruptcy, so non-exempt assets and funds will be liquidated to pay your creditors. There are times when bankruptcy filers find themselves with more non-exempt assets than originally expected, and rather than have the assets liquidated in the bankruptcy, they decide to spend, sell or use the asset.

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What To Do When You Owe Joint Tax Debt in MN With a Non-Filing Spouse or Ex

Posted by Col Ovik on March 13

If you file bankruptcy and your spouse does not file with you, your spouse will remain liable on any joint debt. In a chapter 13 bankruptcy filing, priority debts like tax debt must be paid in the plan or through the bankruptcy. This is great news if you want a payment plan for your tax debt. However, the co-debtor on the tax debt is not protected by the automatic stay in a chapter 13 bankruptcy from the taxing authority.

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What Your Co-Debtor Needs to Know When You File Bankruptcy in MN

Posted by Col Ovik on March 4

Filing bankruptcy is a court action, so it is public, but most people do not keep tabs on the current bankruptcy filings. However, if you have any shared or joint debt with your ex, the answer is unequivocally yes, they will be notified of the bankruptcy filing because they are a co-debtor.

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Should I Be Paying Down Secured Debts Before Bankruptcy in Minnesota?

Posted by Col Ovik on March 1

When you are on the verge of filing bankruptcy it may seem tempting to pay down some secured debts. People fall into the trap of taking exempted funds out of retirement accounts and using those funds to pay down their secured loans. Unfortunately, this type of bankruptcy planning can backfire.

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What Do I Say in My Minnesota Bankruptcy 341 Meeting?

Posted by Col Ovik on February 12

When you file bankruptcy, a chapter 13 or a chapter 7 filing, you will be required to attend a meeting of creditors. The meeting is conducted by the trustee, who is charged with administering the estate. But your creditors can and sometimes do attend this meeting. Very few creditors actually attend the meeting, and most of the time a bankruptcy debtor can expect that no creditors will be present.

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Divorce Decrees and Bankruptcy in Minnesota: Think Before You Sign

Posted by Col Ovik on February 6

Many divorces today are accomplished by a default order and are never litigated. In fact, many individuals draft their own divorce decrees. While this may save you money on a divorce attorney it could end up costing you in your bankruptcy.

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Why Do I Have a Tax Lien on My Home in Minnesota?

Posted by Col Ovik on January 27

When a person neglects or refuses to pay their tax debt, the IRS can obtain a lien on the tax payer’s property. The federal tax lien attaches to every interest in property that the taxpayer has or acquires during the time of the lien in effect. The IRS obtains the perfected security interest in the person’s property by filing a Notice of Federal Tax Lien with the county recorder’s office. The lien remains in effect until it is satisfied or becomes unenforceable by the lapse of time.

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I Am Embarrassed I Have to File Bankruptcy

Posted by Col Ovik on January 11

When I meet with clients I often hear the phrase, “I am embarrassed I have to file bankruptcy”. The truth of the matter is no one wants to be the position where they are asking for help, but we all find ourselves in that position at some point. We may not all need the same type of help, but at some point everyone has to rely on someone else. There is no shame in needing help. Bankruptcy is a legal way for individuals to get the help they need. There are unforeseen and sometimes foreseen circumstance that individuals can find themselves in that are just insurmountable.

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