Many people are entitled receive tax refunds each year for overpayments to the IRS and Minnesota State Department of Revenue from taxes withheld from their paychecks. Sometimes, these refunds can be quite substantial. A debtor’s right to receive a future tax refund is considered property of the “bankruptcy estate.” In a chapter 7 bankruptcy case, property of the bankruptcy estate is all of the debtor’s money and property that is subject to being taken by the bankruptcy trustee to pay the debtor’s creditors. In many cases, most, if not all, the debtor’s money and property is “exempt,” or legally protected from being taken to pay their creditors.

In a legal “Trust,” money, or other property, that is owned by a “Beneficiary,” is controlled by a “Trustee” (not to be confused with a bankruptcy trustee), whose responsibility it is to distribute the property to the Beneficiary in accordance with the terms of a written “Trust Agreement.” The person who creates the legal trust, via the Trust Agreement, is called the “Settlor,” and there can be multiple Settlors, Trustees, and Beneficiaries.

     If you live in Minnesota, and you are struggling with a debt problem, you can solve your debt problem for good in 2 steps:

 LifeBack Law Firm is Minnesota’s bankruptcy law firm, since 1972. We have been protecting Minnesotans from their creditors since 1972 and we can protect you too. Our entire focus, from the time we come to work until the time we go home, is protecting Minnesotans just like you from their creditors. How successful are we at doing our job? Ask the people who left us over 1,400 Google reviews and they will tell you how they were treated and what getting their lives back meant to them. Each month, hundreds of Minnesotans just like you reach out to LifeBack Law Firm for help with a debt problem. We protect each and every one of these people who retain LifeBack Law from their creditors and we can protect you too.

     How can a person tell for sure if they should file Chapter 7 Bankruptcy? A tall tale sign is if you are thinking about Chapter 7 Bankruptcy, a lot. In fact, if you are reading this blog now you might be need to file Chapter 7 Bankruptcy. Why do I say this? Well, many people try to avoid the “b” word, so if you start looking for the “b” word that means you are seriously looking at filing Chapter 7 Bankruptcy. What is a great resource to research Minnesota bankruptcy? Go to Minnesota’s largest bankruptcy law firm’s website at www.lifebacklaw.com. You will be impressed with three levels of information about Chapter 7 Bankruptcy.

Filing for bankruptcy is very often the best option for someone who is in a financial position where they are unable to afford to pay their ongoing bills and expenses in addition to their debts. When this happens, a person should try their best to continue paying their necessary ongoing expenses and bills, such as their mortgage payment, car payment, utility bills, and groceries. These needed expenses are more important than paying on old debts, especially if a person is planning on filing for bankruptcy and getting rid of those old debts anyways.

     Recently, I have been reading about and materials belonging to some of the ancient Greek philosophers. Socrates left behind no works or books. What we gleam from Socrates and who he was comes from students of Socrates like Plato and others. One of the comments Socrates is known to have said is, “When the argument is lost, slander becomes the tool of the loser.” I absolutely love this statement made by Socrates because it is 100% truth. How often have you been in a debate with someone only to have the other person resort to name calling or worse? Socrates was himself punched, kicked, had his hair pulled, and ultimately killed for searching for the truth. And yet today, in 2021, slander is alive in well from those who try and conceal bad faith arguments or bad acts.

     Would you consider hiring a bankruptcy lawyer who was fired from their job filing bankruptcies? I would not. I would prefer my bankruptcy law not have been terminated from their former firm for any reason. If you were terminated from your job, I would naturally wonder why were you terminated from your previous job? I mean, do you struggle following boundaries, easy boundaries set by your former employer? How do I know you will follow simple boundaries with me as a client?

When a person files for bankruptcy, their property is considered exempt, protected from creditors under the law, or non-exempt, not protected from creditors. In a Chapter 7 bankruptcy case, the debtor is required to give any non-exempt property they have to the trustee to be included in the bankruptcy estate and used to pay creditors or enter into an agreement with the trustee, wherein they agree to pay the trustee to keep the non-exempt property.

Chapter 7, or “liquidation” bankruptcy is the most straightforward path to bankruptcy relief for most of the people I talk to who are seeking bankruptcy relief (called “debtors”).

People file bankruptcy when they can no longer continue keeping up with paying their debts.  When faced with the decision of staying current on your rent or making payments upon your debts, it is always advisable to choose to make your rent payment rather than paying on the debts. Nobody wants to be evicted and most of your debts will be likely be wiped out by your bankruptcy discharge anyways (except for most types of tax debt, domestic support obligations, and student loan debt, etc.)

    Every single person I have ever met was a bit terrified of the “b” word. Some are more terrified than others. My heart hurts for those people who suffer far too long with a debt problem because they are terrified of the “b” word. Our former clients know how you feel. They all felt the same way you do now. But what they found is the “b” word was not only not terrifying, it became the key that unlocked their future and freed them from an incredible burden.

     What is the single biggest mistake I see people in Minnesota make when they are looking for bankruptcy representation? I see two common mistakes. First, too many people chose the first firm they talk with. Now if the first firm you talk with is LifeBack Law Firm, a quality Minnesota bankruptcy law firm, you have got something. But too often I hear the horror stories of people who select the first firm only to find out later that firm’s reviews are horrible. Just take a look at some of these law firms Google reviews and even Glassdoor reviews and you will see you may want to keep dialing the phone.

It is quite odd that in bankruptcy, there is no specific exemption to protect guns. Now this is a bit odd considering that there is a Second Amendment right to bear arms. However, just because something is a constitutional right does not necessarily mean it is exempt in bankruptcy and protected from your creditors. I am not telling you this is right, I am just telling you this is the reality of the Federal and Minnesota exemption schemes as it is right now

You are not alone. Each year, thousands of good Minnesotans find themselves suffering with overwhelming debt often through no fault of their own. Broken relationships, businesses that fail, medical problems that occur, incomes that drop, and yes, bad financial decisions that get made because we are human and not robots. But when you are suffering from debt, the last thing you ever want is to deal with a law firm full of cold and antiseptic people who simply don’t care about you at all and you can feel it. There is a better way.