We live in the historical period known as the information age. Everyone has information right at their fingertip, however, are they receiving the correct information? How do we know the information we are reading online is the best, and most current information. Consider the source of the information: is the information coming from someone’s blog or an academic paper, and cross-reference the sources. It can be an arduous task to complete a thorough search on a topic, but likely necessary if you want the entire truth. 

Filing bankruptcy is a court action. The bankruptcy filer will file a petition, and receive a case number, meet with a trustee, and there is a possibility of additional court actions, motions, and ultimately the case will be discharged and closed. But, as a bankruptcy filer you have some responsibilities to the court. Bankruptcy exists for the protection of the debtor and to provide the debtor with relief from their creditors, but there is also an onus on the debtor when filing. 

When a bankruptcy is filed the automatic stay is immediate, but not unlimited.  The automatic stay typically lasts until the debtors discharge but through the filing of a motion for relief from the stay, a creditor can request permission from the court to continue collection efforts against a debtor. For example, a mortgage company can ask for relief to foreclose on a homestead for non-payment of the mortgage or a vehicle lender can request relief to repossess a vehicle for failure to keep the vehicle properly insured. The creditor must show the court that a reason or a cause exists to lift the automatic stay.

Bankruptcy relief affords debtors with the benefit of the discharge of debts. But the cost of this discharge is: debtor must be honest and truthful in their disclosures to the court. If a debtor does not provide an honest and accurate accounting of assets to the court and creditors they will jeopardize the discharge of their debts.  

Lately it has been in vogue to buy into the cryptocurrency world. And when a debtor files bankruptcy any value that the cryptocurrency would have would be considered an asset. But before you jump into the cryptocurrency market you should consider all the risk. 

In Minnesota, the creation of a statutory exemption from claims of creditors for real estate used as a homestead is authorized by Article I, Sec. 12 of the State Constitution.  Minn. Stat. Chap. 510 sets forth the homestead exemption. It begins with a definition that reads, in pertinent part: 

Section 362 provides that a bankruptcy petition "operates as a stay, applicable to all entities" and "generally prohibits attempts to collect prepetition debts against the debtor or the debtor's property or attempts to enforce liens and other interests against property of the bankruptcy estate”

When filing for bankruptcy your attorney will ask you to value and disclose all your assets on the bankruptcy petition. The importance of an accurate, complete and honest disclosure of assets cannot be emphasized enough. Disclosures are required as to the nature, value, and disposal of assets. Knowingly and fraudulently undervaluing assets or nondisclosure of assets can equate to the intent necessary for the denial of discharge under 11 U.S.C. Section 727.  The intent requisite to preclude a discharge must be an actual fraudulent intent as distinguished from constructive intent. Actual intent such as to hinder a creditor may be inferred from the debtor's actions, like intentional undervaluing of assets or omitting assets. 

There have been some headline making US Supreme Court opinions recently. Some decisions you may agree with, and some you may disagree with, but the real question is when and why should the public be concerned with these decisions. 

Chapter 13 bankruptcies are repayment plans based on the debtor’s ability to pay. When meeting with your attorney you will discuss your monthly budget: income and expenses, and determine a proposed monthly payment. Once the petition is filed, a creditor’s meeting and confirmation hearing will be scheduled.  Prior to the confirmation hearing, the creditors can objection to the confirmation of the plan.

Not everyone is eligible to file a chapter 7 bankruptcy. There are income requirements to filing a chapter 7 and those individuals that do not meet the income requirements, will not be able to file a chapter 7 bankruptcy. But, even those that do meet the eligibility requirements to file a chapter 7, may find the outcome of filing a chapter 7 disagreeable. While chapter 7 filings are effective vehicles for discharging unsecured debt and they are short in duration, there are times when even those eligible for a chapter 7 bankruptcy may choose to file a chapter 13 instead.

The bankruptcy trustee may avoid transfers that the debtor made or incurred within two years before the filing of the bankruptcy petition if such transfer was made with actual intent to hinder, delay, or defraud a creditor or the debtor received less than fair market value for the transfer. The trustee then may recover, for the benefit of the estate, the property transferred or the value of such property. 

On the bankruptcy petition you will list all of your assets, and this includes anything owed to you, or potentially owed to you, even if you believe the funds or asset is not collectable. For example, if you lent you neighbor $1,000, but you believe that he is unlikely to pay you, it is still important to list the money owed as an asset in your bankruptcy. If you have a case with non-exempt assets, the bankruptcy estate may have an interest in the funds lent. And depending on the amount of monies owed to you, the bankruptcy estate may pursue you neighbor for the lent funds. 

There is a process and procedure for serving defendants and initiating a lawsuit. Plaintiffs do have to follow the correct procedures for proper service. Some individuals are successfully sued and a judgment is awarded to the plaintiff without any knowledge by the defendant. The defendant only becomes aware of the judgment when the creditor begins to enforce the judgment through a bank levy or a garnishment. The question I receive from debtors is: how can they vacate or remove the judgment because they were not properly served with the lawsuit.

Carefully considering when to file your bankruptcy can maximize the benefit you achieve from the filing. There are many factors that may speed-up or delay the need to file. 

If a debtor is being represented in a bankruptcy they should allow their bankruptcy attorney to work for them, and the only way their attorney is able to provide adequate representation is if they know all the details about the debtor’s case. If a debtor chooses to omit certain transactions or details then the attorney will not be able to advise appropriately regarding those transactions which could be problematic in the case.