In my last post I wrote about the rules regarding inheritances as property of the bankruptcy estate – and my focus was on the rules that apply to people in chapter 7 cases. But there’s another chapter that the attorneys at Kain & Scott practice – chapter 13. And inheritances in chapter 13 cases are handled a little differently.

As a society we are perpetually telling children to try new things, experience life, fail, grow, and learn. But it seems as we age, we are more reluctant to do any of those things. We like the status quo.  We never want to venture outside of our comfort zone.  But why? Are those not the things that make life worth living-that make you become a more interesting person?  Lately, I have really been trying to push myself to learning new skills.

While the clear majority of bankruptcy cases filed in Minnesota are Chapter 7 (liquidation) bankruptcies. You would be surprised how often people making $50K, $80K, $100K, or even $200K+ need to file for bankruptcy relief. While it is easy to say, “if I made that much money, I could definitely afford my bills and live a normal life.” The problem is, that unexpected events occur (which should now be more obvious than ever), which can cause people earning a high income to no longer afford their bills.

I’ve posted two recent blogs regarding the concept of property in bankruptcy cases, focusing on property that an individual may not have at the time a bankruptcy case is filed, but which the Bankruptcy Code identifies as property of the bankruptcy estate. I wrote about some common examples of this type of property – earned but unpaid wages, tax refunds, insurance residual payments and real estate commissions. The key point in these examples is that all of these not-yet-received payments were owed to the bankruptcy debtor at the time the bankruptcy case was filed – any wages, refunds, residuals or commissions earned after the filing date belong to the debtor, not the bankruptcy estate.

As attorneys that specialize only in bankruptcy law, Kain & Scott stays on top of all changes to bankruptcy law as they happen through-out the year. Whether this is related to new acts of Congress, such as under the CARES Act which provides specific relief to bankrupt debtors, or Minnesota state law, it is important your bankruptcy attorney stays on top on all changes to the law.

This has to be the most common concern expressed amongst visitors to our website and questions asked during appointments. It is not what you think. What you think will happen does not. People are always surprised to learn that your credit score and overall credit profile typically dramatically improve. Shut the front door right? How can this be true? Sometimes, the images your mind can create are pretty far-fetched. I remember thinking before I did bankruptcy work, I wonder if the “bankruptcy people” like follow you in a grocery store and inventory what you are buying. No! They certainly do not.

I totally get this feeling. I have high anxiety myself and the thought of having to file bankruptcy would be a hurdle that would not be easy for me to jump. How many of us wind up on broken roads we did not expect? If you are honest with yourself you would say every single one of us. Your intentions are wonderful but things don’t always work out the way you hoped. Consider the person who opened a business and hoped to be a millionaire. Don’t we all want this?

55% of all the people who are employed in the United States participate in some sort of retirement savings plan – whether that is a pension, a 401(k) or an Individual Retirement Account (IRA).  Congress has been clear in exempting almost all retirement accounts from administration by bankruptcy trustees.  So as a general rule, if you are thinking about the possibility of filing a bankruptcy case you do not have to worry about losing your retirement savings – 401(k)’s and pensions are not part of an individual’s bankruptcy estate and IRA’s are exempt up to more than one million dollars.  So it seems pretty clear that Congress, in passing bankruptcy laws, intended to protect people’s retirement savings from their creditors.

If you are saddled with debt, you are already stressed out beyond belief. You may also be embarrassed by your situation. At Kain & Scott, we tell you why you should never feel embarrassed about having debt and why there is definitely hope. We have helped people from all walks of life get rid of a debt problem permanently. No one likes to have debt. It sucks. But if you are suffering from a debt problem you do not have to suffer alone.

Unfortunately, there are people in Minnesota who are bent on spamming Google maps and distorting their hours of services or whether they are even actually at a location at all. I recently came across a scenario where the law firm had not been in their purported office location in almost 4 years! This is despite a live Google Map listing showing the law firm had an office at a physical location and the law firm was open like 75 hours per week. In reality, this was not their office and not only was their purported office not open 75 hours a week, they had not been there for almost 4 years.

In some situations, a debt can be discharged through a bankruptcy, but a debtor may wish to pay that particular debt. The most common example is a vehicle. Bankruptcy does not prevent a debtor from voluntarily paying a debt that would otherwise be dischargeable. The lender is protected by the security interest attached to the collateral and if the debtor cannot repay the debt, the lender may possess the right to take away the collateral.  A reaffirmed debt is treated as if the debtor never filed for bankruptcy.

A reaffirmation agreement reinstates that you agree to pay a loan under the same terms and conditions of its original contract. After you have signed a reaffirmation agreement, you are legally bound to that loan and the debt. If something physically happens to your home, you fall behind on payments, or some other breach of contract occurs, you are bound to pay the debt owed after insurance or a foreclosure sale.

There is an effort under way to clean up Google Map Business Listings that are complete crap. The effort is called “stop crap on the maps”.  I recently came across 7 Google Map Listings from a single lawyer who claims to have 7 offices and they are all staffed fulltime. How can this be true? How can one lawyer be at all locations, full time? The answer is the lawyer cannot.

It occurs to me that this is a common question that is asked every day in Minnesota by hundreds of people. In practice, the amount of debt that is “enough” to file a Chapter 7 Bankruptcy will be different for everyone if you think about it. For example, if your income is limited to $675.00 per month in Social Security Disability and you have $5,000.00 in credit card debt, that $5,000.00 may not seem like a lot to you but it is for the person who is making $675.00 per month in Social Security Disability. Plus, what happens if this creditor gets a judgment against this person and threatens to freeze this individual’s bank account?

Now is a pivotal time for most of us, full of uncertainty, and the decisions you make to deal with the coronavirus and related shut-down can have a huge impact on the rest of your life and business.

Bankruptcy is not something where you pick and choose what goes away and what does not. It takes a snapshot of all your assets and all your liabilities at a particular point in time (ie the date you file bankruptcy), and removes your personal liability for nearly all of them. The question is not what do I get to keep, but what survives a bankruptcy filing? That is: loans attached to vehicles and property (secured debt), debt from a divorce, child/spousal support, criminal court ordered fines, student loans, and most taxes.