Debt consolidation is the process of taking out a new loan to pay off other liabilities and consumer debt, essentially extending the repayment terms. It does not erase the original debt, but transfers the consumer’s loans to a different lender or type of loan. Debt consolidation usually maximizes the likelihood of creditors collecting from a debtor. 

I like to think of a Chapter 13 Bankruptcy like a government sponsored debt consolidation program. In fact, if this is what a Chapter 13 Bankruptcy were called, far more Americans would turn to Chapter 13 Bankruptcy for relief as opposed to being stuck in an endless debt consolidation program through some company. The advantages of a Chapter 13 far outweigh any debt consolidation program out there.

In these unprecedented times, there is so much uncertainty in the world that many individuals with steady, good paying jobs, are hunkering down in survival mode for fear of what might happen next. That is a completely normal and healthy response to have in this situation, but if you need help with your finances, you should not let fear of the unknown stand in your way.

Debt is not just a financial problem. It is a physical and mental problem too. Overwhelming debt places an enormous stress on the mind and body that is not healthy for us. Kain & Scott has been around since 1972, we have seen a few things. And one of the things we have seen is the deterioration of health because of debt. Anxiety and depression are common among those people who suffer with overwhelming debt.

Some Minnesota Bankruptcy law firms invest little money in people and spaces and guess who suffers when they don’t? Yes, you do. You see an unhappy workforce results in unhappy clients. There is no other way around this. If an employer has unhappy employees guess what you are going to be? Unhappy! 

Assuming one meets the jurisdictional requirements to file Chapter 7 Bankruptcy, what are the basic requirements to qualify to file a Chapter 7 Bankruptcy? Good question. I have had people over the years who wanted to file a Chapter 7 Bankruptcy but could not. Why? Section 707(b) lays out the elements associated with what we call the “means test”. Basically, if your income is over the median income for your family size in your state, you must go through a “means test” which is a combination of real numbers and set numbers.

A law firm should honor the courage it takes for people to reach out for help in resolving a debt problem. Having a debt problem can be embarrassing for many Minnesotans. And instead of seeing Minnesotan’s courage to reach out honored by law firms I found the opposite was happening and it made me mad.

Sometimes, it is ok to hit the reset button in life and move on from an overwhelming problem.  I have never once had anyone regret the decision to dump debt and move on with their lives. The only regret that petered out eventually was the regret that they had not hit the reset button sooner. One of the biggest advantages of filing bankruptcy is not only the debt gone but it goes away tax free. Think about that for a moment. If you owed me 100k and I said forget about it I am going to write off on my taxes as a loss. Well, since I am going to write it off as a loss it has to be income to you.

 Everyone has the right to be heard. No bias, no judgment, just quiet resignation to being heard by someone who really cares. At Kain & Scott we listen a lot. This is a painful journey for most of our clients and we would be remiss if we didn’t sit back and listen to our guests as they tell their story of what happened to them and overwhelming debt. 

It seems that almost everyone in this country has one thing in common-student loans.  You receive this extensive training, only to find out there are no jobs available in that field, and the skills are non-transferable.  

Chapter 7 Bankruptcy is a bankruptcy where you do not make payments back to your creditors. Instead, your liability on the debt id “discharged” in bankruptcy. Once discharged in bankruptcy, you are no longer liable on the debt, tax free, forever. So while the creditor will write off the debt as a loss on their tax returns, the debt forgiven is not taxable to you under the IRS Code. The IRS Code basically says whatever debt is forgiven as a result of a Title 11 Bankruptcy, which Chapter 7 Bankruptcy is, is not taxable to you. The tax form you should file with your tax return is IRS Form 983.

If you file a Chapter 7 Bankruptcy, what debts are discharged? This is an excellent question I was just asked a few days ago. This person had some unemployment overpayments, child support, and student loan debt plus about 65k in credit card debt.

If you are like me and have high anxiety, having debt would cause you to raise this question. If I file Chapter 7 Bankruptcy in Minnesota, can I keep my home? When you file Chapter 7 Bankruptcy in Minnesota, you are able to keep your home. The reason you are able to keep you home is this; there are state of federal exemptions you can use which allow you to keep your home. If you have a lot of equity in your home, you likely will need to use the Minnesota exemptions. If you don’t have a lot of equity in your home, you will likely use the federal exemptions. Do not worry about which set you should use as a quality Minnesota bankruptcy firm will help you with this.

I know this headline seems a little silly. But if you have anxiety, this headline is spot on. Yes, people not only survive bankruptcy, they thrive after bankruptcy. Just a few weeks ago I had a former client call me. He said he was in our neighborhood, driving by one of our buildings, and he was reflecting about his own story. He said he remembers being terrified about the prospect of filing bankruptcy. But, he said, after he filed the bankruptcy and got his life back, he never once has regretted the decision to file.

 At Kain & Scott, we never have potential or current clients receive legal advice from a paralegal. Any legal advice dispensed is always dispensed to you by a licensed Minnesota bankruptcy lawyer. Trouble is, not everyone thinks that it is illegal and unethical for paralegals to give legal advice to Minnesotans suffering from overwhelming debt. 

 A Chapter 13 Bankruptcy is a government sponsored debt consolidation plan. It is government sponsored because our legislators enacted Chapter 13 Bankruptcy into law under Title 11 of the U.S. Code.