I posted recently about the composition of a chapter 13 payment. A number of factors – not simply a budget calculation – go into determining the final payment amount. And that recent post only covered some of the considerations. Here are some more things to keep in mind in determining what a monthly chapter 13 payment will be.

In some cases, the amount that has to be paid over the lifetime of a plan – attorney fees, trustee fees, auto loan payments, mortgage arrears, tax arrears, etc. – works out to a higher monthly payment that a debtor can afford right now. Does that mean that a chapter 13 simply won’t work in this situation? Not necessarily.

The co-debtor stay is a nice feature of chapter 13 bankruptcy. When an individual files a bankruptcy case, there is an automatic “stay” that is put in place by the Bankruptcy Court. The automatic stay prevents creditors from collecting against a bankruptcy debtor. In chapter 13 that stay can also, in many cases, extend to co-signers and joint account holders. As long as the chapter 13 case is pending, other people obligated on debts that are “in” a chapter 13 case can be protected by the same automatic stay.

Financial problems can generate so much stress that it is difficult for a lot of people to collect financial information – embarrassment and anxiety can cause good people to shut down by not opening mail, answering phone calls or even checking bank balances because of the paralyzing fear that the news is going to be bad.

Still, if someone decides that filing a bankruptcy case is in their best interest, the lawyer representing the client has to prepare a bankruptcy petition and schedules that accurately reflect the client’s financial situation.

Chapter 13 payment plans can solve a lot of financial problems: mortgage arrears can be cured, expensive car loans can be restructured, and assets that would have to be surrendered to a chapter 7 trustee can be retained. This is accomplished through a chapter 13 plan where a debtor pays a specified amount of money to the chapter 13 trustee over a defined period of time.

It’s tough to pick up the phone and call our office to set up an appointment to speak with one of the attorneys at Kain & Scott about your financial troubles. Everyone at our office knows this, and we honor your courage in making that call. When you’ve made the phone call and set up the appointment – whether it’s in-person, over the phone, or using a video platform – we want to shift our focus to having that first meeting be productive for both you and us.

Here are some ways that our clients help us provide the best service we can.

In Minnesota, contractors, laborers and material suppliers are entitled to file a mechanics’ lien against real estate they have “improved” – by constructing, remodeling or repairing structures on the property – and for which the property owner has not paid. Filing bankruptcy before or after a mechanics lien can cause different scenarios.

One of the great features of Chapter 13 bankruptcy is that the monthly payment the debtor makes is based on the debtor’s budget. In theory, the Chapter 13 payment is always affordable for debtors. Unfortunately, because your circumstances may change, your Chapter 13 payments may become unaffordable. We can help.

Chapter 13 bankruptcy cases are repayment plans that can be an effective tool to use to resolve financial problems in a variety of scenarios. Chapter 13 gives people a way to restructure their finances while being able to retain their home, their car, and other assets that would otherwise have to be turned over to creditors.

Money problems can cause friction in relationships, and these problems can sometimes result in the relationship becoming fractured. If couples are divorcing, and they have financial problems, the lawyers for the couple will often recommend the couple file a bankruptcy case. Because of expense, many lawyers will advise that the divorcing couple file a joint bankruptcy case.

As a bankruptcy attorney, I see people with all sorts of issues and harassment they are facing from their creditors, and it is amazing the length that collection agencies will go through in order to collect past-due debts. Everyone wants to pay the bills they’ve incurred, but unplanned events can throw-off even the most prudent financial planners. Regardless of whether a payment was missed for valid reasons (like vehicle repairs, medical debt, job loss/income drop, etc.), collection agents will soon be calling non-stop (possibly at your work) and demanding late fees, accrued interest, and enforcing acceleration clauses which makes the full underlying balance immediately due! What’s worse, is that these collection agents are incredibly hard to get in contact with, and they do not inform people of their rights when pursuing every avenue available to collect their debts.

Many of our clients find themselves filing for Chapter 7 bankruptcy because they are out of options. And while bankruptcy is supposed to give you a fresh start, we understand that it often feels more like a defeat. Many clients worry if they will ever be able to qualify for a loan after their bankruptcy case. While you may have to pay a higher interest rate and meet other requirements, the good news is that getting financing after your Chapter 7 bankruptcy is easier than you might think. An experienced Minnesota bankruptcy attorney can help you develop a plan and identify your options.

Deciding to file for bankruptcy is a big step, especially if you own and operate a business. You need to get out from under your debts, some which were directly related to your business, while other debts were strictly personal. Business owners worry about how the bankruptcy will affect their business, with good reason - the idea of closing down your business and the loss of income can be quite worrisome. The good news is that the point of bankruptcy is to help you make a fresh start, not make your life more difficult.

In the first part of this topic, we discussed developing good financial practices to help you rebuild your credit. If you haven’t already read that post, we strongly recommend that you review it before reading this one - the steps discussed in this post won’t do you much good if you haven’t yet gotten your financial house in order. Good financial habits are a necessity when it comes to rebuilding your credit after bankruptcy.

Getting your bankruptcy discharge is a milestone event in reclaiming your financial future. In some ways, however, this is just the beginning. In order to maximize the value of your bankruptcy and get back on the right track, you need to rebuild your credit. For many people, this means relearning how to manage their finances.

Most people come into our office wondering whether bankruptcy is the right choice for them. However, there are some instances where the choice is made for them because they have had an involuntary bankruptcy petition filed against them.

When you file for bankruptcy, you are required to notify all of your creditors. This gives your creditors the opportunity to challenge your bankruptcy filing - they might argue that you shouldn’t be allowed to file bankruptcy at all, or they might have an issue with some particular aspect of your bankruptcy. As intimidating as this may sound, the reality is that you will be given an opportunity to respond to their challenges, and ultimately, the court will decide whether or not you should be allowed to proceed. It may still sound scary, but rest assured that the playing field while in bankruptcy is much more level than it was before you filed for bankruptcy. If you’re worried about possible objections to your bankruptcy case, a Minnesota bankruptcy attorney can help you both avoid and respond to those objections.

Collection calls can make an already difficult situation miserable. They won’t stop calling until to you talk to them, but you don’t know what to say - you don’t want to make promises you can’t keep, and you’re so overwhelmed that you’re not sure there is anything you can pay. If you could just get the calls to stop, you could maybe focus and come up with a plan to get out of your current situation.

Your home is probably your most important asset and its value goes beyond just dollars and cents. The first question many of our clients ask us is whether the bankruptcy court will force them to sell or otherwise surrender their home. While this is a very real possibility, we do everything in our power to help you keep your home. Chapter 13 bankruptcy is often the best way to get out from under your creditors and keep your home. That said, you will probably need a Minnesota bankruptcy attorney to help you successfully navigate the process.

Most people never need to hire a lawyer, and when they do, it’s usually at a time of their life that is filled with stress and uncertainty. As a result, meeting with a lawyer a lawyer is often something that people approach with a lot of trepidation. It’s no different when someone is considering filing for bankruptcy. You’re already being harassed by creditors and debt collectors, you may be facing foreclosure, and other legal actions. The idea of meeting with a complete stranger to discuss your financial situation is, at a minimum, daunting. However, it’s important to remember that our Minnesota bankruptcy law firm is here to help you get through these difficult times and make a fresh start.

Chapter 13 bankruptcy is often a good choice for people who want to keep their home or other significant assets. In a Chapter 13 bankruptcy, you repay your debts through a payment plan that is administered by a bankruptcy trustee and that is overseen by the bankruptcy court. Your Chapter 13 payment plan can take up to five years. On the one hand, five years helps you repay your debts in reasonable and affordable monthly payments. On the other hand, five years is a long time and can be intimidating for a lot of people.

Chapter 7 bankruptcy is an extremely powerful tool that can help you get out from underneath overwhelming debt and get a fresh start. However, most people don’t realize that you have to be income-qualified in order to be eligible to file for Chapter 7.

In 1978, Congress enacted the United States Bankruptcy Code, allowing consumers to file for bankruptcy protection. Since that time, millions of Americans have filed for bankruptcy, all across the country and across all walks of life. Despite how common filing a bankruptcy case has become, many people don’t really understand what bankruptcy is, how it works, or what it can achieve. The following is some brief information about bankruptcy laws. To discuss your specific circumstances, call our Minnesota bankruptcy attorneys today.

Thanks to all of the courtroom dramas we see on television, most people are terrified by the prospect of going to court. It often keeps people from going to court who need to - the idea of someone aggressively questioning them and trying to trip them up is just too intimidating. Even people in dire financial situations are afraid to file for bankruptcy because they don’t want to go to court.

Financial stress can be overwhelming and leave you feeling like you have nowhere to turn. Bill collectors are calling, you can’t keep up with your bills, and you don’t see your situation improving anytime soon. While bankruptcy may seem like the obvious choice, this is a big decision and should be made only after careful consideration. If you feel like you’re out of options and are considering filing for bankruptcy, a Minnesota bankruptcy attorney can help you decide whether bankruptcy really is right for you.

Clients often come to us unsure of whether bankruptcy is the right option for them, or whether they can file bankruptcy at all. If you’ve previously filed for bankruptcy, or if you think you may need to file more than once, this question becomes more complicated. The simple answer is yes, you can file for bankruptcy again, but the timing and other details are important.

Financial trouble is probably one of the leading causes of divorce, and as a result, divorce and bankruptcy often go hand-in-hand. As stressful as it is to face both a possible bankruptcy and the break-up of your marriage, rushing into either decision can create a lot of problems. Fortunately, some careful planning can help minimize the impact so that you can move on with your life and in a better position than you are in now.

Judging by what you see and hear in the media, it's not uncommon to hear about businesses filing for bankruptcy. Some of these businesses go on to success in life after bankruptcy. And these aren’t just huge, national corporations - according to the Small Business Administration, roughly 80 percent of small businesses will fail. If you’re a sole proprietor whose business is facing insurmountable debt, you may be wondering whether bankruptcy is a viable option for you.

Deciding to file for bankruptcy is a big step - so big that it can perhaps feel like stepping off a cliff. However, you may be surprised to feel a sense of relief once you decide to move forward. After all, bankruptcy offers the opportunity to make a fresh start. Most people think of bankruptcy as a legal mechanism that wipes out your debt. In legal jargon, this is referred to as “Chapter 7” bankruptcy or “complete liquidation.” If you’re having difficulty paying your bills and have creditors aggressively seeking payment, the opportunity to make it all go away begins to sound very attractive. However, there are situations in which Chapter 7 bankruptcy may not be your best option.

Many people worry that if they file for bankruptcy, they will lose everything - their house, their car, anything of value that can be sold to pay their debts. Fortunately, this is not the case. Bankruptcy law provides for various exemptions that allow people to retain property and avoid creditors’ claims. One of the most important of these exemptions is called the “homestead exemption,” which allows people to keep their homes.

When you file for bankruptcy, you’re basically asking the bankruptcy court to relieve you of the obligation to pay some or all of your debts. As part of that process, you need to demonstrate to the court that you can’t pay all of your creditors in full. As a result, you will need to submit what may seem to be an overwhelming amount of paperwork to the court and the other parties to your bankruptcy case. This is intimidating for many people, especially if they don’t have an attorney to represent them. The documentation you submit is critical if you want your case to be successful - failing to submit the correct documents can jeopardize your case and even result in it being dismissed.

When you file for Chapter 13 bankruptcy, you enter into a payment plan to pay off your debts. However, not all debts are treated equally by the bankruptcy code. Some debts must be paid first, other debts must be paid in full, and other debts may be able to be reduced (and substantially so). In this post, we’ll discuss which debts are which and how it impacts your Chapter 13 payment plan.

When you sit down with your bankruptcy lawyer, you’re going to have to hand over a lot of your financial records. Your attorney will then use those records to fill out the paperwork that will be filed with your bankruptcy case, which you will be required to sign. In signing the filings, you are stating that the information contained in your bankruptcy papers is complete and accurate.

Chapter 13 bankruptcy is an attractive option for people who just need to reorganize and better manage their debt. In order to accomplish this, Chapter 13 requires people to enter into a repayment plan that is approved by the court and managed by the trustee. Your creditors have to halt any collection efforts and are required to make a good-faith effort to work with you on repayment terms that you can afford. The payment plan can take up to five years to repay your debts.

Credit card debt is a major reason why people file for bankruptcy in Minnesota. Credit card debt can get out of control for many different reasons, some of which are beyond your control. If a household member loses a job or suffers a serious illness, you need to rely on credit cards to pay your bills and cover basic expenses. Meanwhile, you may only be able to afford the minimum monthly payment, which can result in excessively inflated balances due to high interest rates. Before you know it, you may see no possible way that you will be able to pay off your credit cards.

Many people make New Year’s resolutions to exercise more, eat healthier, or be kinder to others. But what about resolving to address your financial situation? A lot of people facing financial stress and debt tend to sweep it under the rug. It may feel so overwhelming that they think there is nothing that can be done about it. This is not the case, however, as our experienced bankruptcy attorneys have helped many people overcome even the most serious financial situations. The following are only some debt-related resolutions that can make for a happier 2019.

The holidays are a time for parties and gift-giving, as well as travel or hosting out-of-town family and friends. It feels good to find the perfect gift for each loved one or to put out a gorgeous spread for a holiday party, however, increasing credit card balances can be in the back of your head, causing you constant stress during the season that should be joyful. The good news is that the holidays don’t have to be stressful if you follow some simple tips for holiday spending.

The bills are piling up, and creditors are knocking at your door, so you’ve decided to file for bankruptcy. Because you’re already in a financially difficult situation, you don’t want to take on more debt, and you’ve heard that attorneys are expensive. As a result, you’ve decided to file your bankruptcy petition on your own, which is referred to as proceeding “pro se.” You’ve started filling out the forms and assembling the documents, and the process seems pretty straightforward. While it’s true that you don’t have to have an attorney handle your bankruptcy case, very few pro se bankruptcies are successfully completed. In this post, we’d like to discuss how an experienced bankruptcy attorney can be a tremendous help.

No one likes to think about losing their home to foreclosure. It’s a scary time - not only are you looking at the possibility of losing your home and having your family displaced, but foreclosure can also be financially disastrous. Aside from the damage to your credit, it also wipes out any value you have paid into the house such as your down payment and monthly mortgage payments. If you’re facing foreclosure, filing for Chapter 13 bankruptcy can help you avoid foreclosure and maybe even keep your home.

It’s that time of the year! The holidays are upon us, which of course includes holiday shopping. It’s no secret that Americans like to shop, and we do the bulk of our shopping in the days leading up to Christmas. The National Retail Federation reports that we will each spend an average of $1,007.24 this year, a significant amount of money. Most of this will be on gifts for others, but let’s be honest - some of it will be spent on gifts for ourselves. And let’s not forget the money spent on gas, parking, and dining out while shopping. If you host parties, travel out of town for the holidays, or have college kids that need airfare, all of it adds up to a pretty hefty expense that can hit you like a pile of bricks in the very near future.

It’s widely known that overwhelming medical debt pushes many Americans into bankruptcy, even if the specific percentage of bankruptcy cases is hotly debated. If you’re recovering from a major illness, the overall numbers don’t matter - the important fact is that you’re drowning in medical debt. Maybe you’ve lost income, or maybe you’re now partially or totally disabled as a result of your medical condition. Whatever your situation, you’re probably extremely anxious about your future and understandably so.

The ultimate goal of a consumer bankruptcy case is the discharge of debts. While a discharge can greatly improve your financial situation, it is not a magic eraser that wipes out all types of debts. The following are some frequently asked questions about the debt discharge at the end of a bankruptcy case.

In an earlier post, I wrote about the decision-making process that our clients go through in determining whether to file a bankruptcy case.  The last post dealt in large part with the advisability of thinking through the financial problems carefully, and involving friends and relatives to get a sense of whether these supporters think the bankruptcy option is a good one.  At the end of the post I wrote that seeing an attorney is essential to good decision-making regarding the wisdom of filing a bankruptcy case.

Instead of liquidating assets, Chapter 13 bankruptcy requires you to make monthly payments for three to five years before you can receive a discharge. The court will want to make sure you have enough regular income to make reasonable payments toward your debts. If you don’t have enough income, you may have to file for Chapter 7 bankruptcy instead of Chapter 13. The following is some additional information about how repayment plans work in a Chapter 13 case.

In an earlier post, I started writing about a common issue in chapter 13 bankruptcy cases: a change in income experienced by the debtor while the chapter 13 plan is open.  The last post looked at why this is an issue - namely, the 2005 revision of the bankruptcy law that required chapter 13 bankruptcy debtors to annually send the chapter 13 trustee copies of filed state and federal income tax returns.  It’s from that tax information that a chapter 13 trustee can ask individuals already in confirmed chapter 13 plans to adjust their income and expense schedules to more accurately reflect the debtor’s month-to-month financial situation.

The goal in consumer bankruptcy cases is the discharge of debts. Both a successful Chapter 7 and Chapter 13 bankruptcy will end with the court discharging a debtor’s qualified debts, which releases their obligation to pay those debts. It is important to understand what happens when you file bankruptcy,when a discharge occurs and how it works to improve your financial situation.

Chapter 13 bankruptcy is commonly known as the “reorganization” bankruptcy. Under this chapter of the U.S. Bankruptcy Code, the bankruptcy trustee will reorganize your debts based on priority, and then will require a debtor to make monthly payments, which the trustee will then distribute to creditors. Your repayment plan can last for three to five years, depending on your financial situation. Some debts must be fully repaid during the repayment plan, and the court may discharge any qualified debts that remain upon completion of the plan.

A chapter 13 bankruptcy is a very helpful tool for many people who are encountering overwhelming financial problems.  For individuals dealing with a potential mortgage foreclosure, chapter 13 offers a structured, affordable way to keep families in their homes.  For a person who has a car payment that has unexpectedly become too expensive, chapter 13 offers a way to restructure the car loan to make the payment more affordable.  For the person who is dealing with child support arrears, or back income taxes, chapter 13 provides a structure to pay these important obligations. 

You’ve filed for Chapter 7 bankruptcy and have heard this type of case referred to as “liquidation bankruptcy.” This is because the bankruptcy trustee has the authority to seize a filer’s property and assets to liquidate and distribute the proceeds to your creditors. You look around your home, at the things you have, and the thought of selling everything to pay off creditors is understandably concerning.

You’ve filed for bankruptcy, and you get a notice from the court about a creditors meeting. What is this? Is it important? Do you have to go? What will happen at the meeting? Can the creditors stop your bankruptcy case?

Most people who file a bankruptcy case do so once in their lives. Thus, most people who file bankruptcy have no idea what a creditors meeting is, what happens there, what impact it can have on their bankruptcy case or, truthfully, anything at all about what the creditors meeting means or does. This is only one of many reasons why you should always hire an experienced attorney to take you through bankruptcy. An experienced attorney can guide you and help you understand what happens when you file bankruptcy every step of the way, including the meeting of creditors.

A lot of people have no idea the government has a debt consolidation plan. Did you know that? Probably not. What if I told you this debt consolidation plan is limited to 3-5 years, you pay what you can afford to pay, and at the end of the plan whatever doesn’t get paid off, gets wiped out, tax free? Peeks your curiosity doesn’t it?

When you file for bankruptcy, you likely face debts that far exceed your ability to pay them, and may have for some time. Maybe you have medical bills, car repairs, house repairs, or other unplanned major expenditures that make it difficult for you to keep up with your regular bills, like your car payment, utilities, credit cards, and your mortgage or rent. You’ve fallen behind on bills, and you alternate paying different bills each month, sometimes just enough to keep the water and electricity turned on. Maybe you’ve even fallen behind on your mortgage. You never answer your phone for numbers you don’t recognize out of fear it is another creditor calling to demand payment. You may receive notice loans in default or of lawsuits filed against you by creditors. You want to make it stop, but you don’t have the money to catch up, and you don’t know any other way to keep your creditors at bay.

In Part One of this series, we began reviewing some common terms you may hear during a consumer bankruptcy case. It is important to understand what is happening in your bankruptcy, which is possible with the help of an experienced Minnesota bankruptcy lawyer at Kain & Scott. Below, find brief explanations of additional common bankruptcy terms.

While bankruptcy can provide many benefits for consumers struggling with debt, the process can be a confusing one. Specifically, you may hear many terms during your case with which you may not be entirely familiar. It is important to have the assistance and guidance of an experienced bankruptcy attorney who can explain every step of the process, including key bankruptcy terms. In the meantime, the following are some brief definitions of common terms in consumer bankruptcy cases. For information regarding your specific situation, call the Minnesota bankruptcy attorneys at Kain & Scott today.

Just like there is good cholesterol and bad cholesterol, there is also good debt and bad debt. The average Minnesota household has about $134,000 in debt. But much of this debt is secured debt, like mortgages and auto loans. Most people do not mind paying these loans, as long as the terms are reasonable and they like the car, house, or other collateral.

Most people see bankruptcy as a last resort. Typically, that strategy is a sound one. It’s usually best to try to work things out with moneylenders before choosing a more radical path.

The quick answer is yes, but you have to act quickly.

Before 2005, an eviction was just like a foreclosure. Even if a landlord got a signed court order from a judge, a bankruptcy stopped the eviction process. The Automatic Stay in Section 362 of the Bankruptcy Code applied. But the oddly-named Bankruptcy Abuse Prevention and Consumer Protection Act contained a number of pro-creditor changes, and the interplay between the stay and eviction was one of them.

This question presses upon the thousands of people who either serve at one of the National Guard bases in Minnesota or work for a firm which supports these men and women. In many cases, if a person loses a security clearance, the person also loses that job. Such a situation clearly makes the family’s financial situation worse instead of better.

 Most of us occasionally run out of money before we run out of month. In this precarious situation, just one serious financial setback can have a devastating effect. Setbacks like serious illness, divorce, or job loss can happen to anyone at any time. When these situations cause financial turmoil, you basically have two choices. You can watch things get worse or you can do something about it.

Consumer debt is one of the more troubling problems of our time. One in four people experience Post Traumatic Stress Disorder-type symptoms because of such debt. If you belong to this group and you are looking for a way out, Chapter 7 bankruptcy may be the exit strategy you have been looking for.

In my last two blogs I’ve written about a common problem with chapter 13: a client’s financial situation has changed during the time the chapter 13 case is pending, and making a monthly chapter 13 payment to the trustee, which once was affordable, is no longer affordable.

In this blog, I’ll write about the options that chapter 13 debtors have when a chapter 13 case no longer “works.” I’ll write about short-term solutions first.

Some clients at Kain & Scott run into problems making their chapter 13 plan payments because of a short-term, temporary financial problem.  For people in a temporary bind, the difficulty in making a chapter 13 payment doesn’t have to spell doom for the chapter 13 case.  Last week I wrote about fixes for short-term problems - catching up on back payments or agreeing to enter into a cure order - to catch up on chapter 13 payments and continue down the financial road to an eventual chapter 13 discharge of debt.

Right before his son went off to the big city in Shakespeare’s Hamlet, Polonius told Laertes “Neither a borrower nor lender be/For loan oft loses both itself and friend.” In other words, be careful about borrowing and lending money to friends. If you lend, they won’t pay it back; if you borrow, you’ll fall out of favor. But loaning and borrowing is not bad. In fact, sometimes both are very good.

His advice is still valid in today’s Minneapolis. People haven’t really changed much since the sixteenth century. So, mixing money and friendship still ends badly most of the time. But sometimes, you need to borrow money. In fact, over two-thirds of the nation’s $13.2 trillion in household debt is mortgage debt. Most of the time, mortgage debt is “good debt.”

Many Minnesota families have excessive credit card debts. Making matters worse, according to one estimate, 60 percent of cardholders struggle just to make the minimum payment. So, every month, the family goes deeper into debt. This downward debt spiral quickly becomes overwhelming.

Many “debt consolidation” firms only make empty promises. But there is a federal debt relief program that’s designed to do away with excess debt and give Minnesota families a chance to start over. But bankruptcy is a very big decision. Before you file your voluntary petition, it’s important to know everything about Chapter 7 bankruptcy.

Most likely, bankruptcy would affect a business partner. However, the effects are almost all positive.

Sometimes, liquidating a failing business is the best course of action. This issue is very common, as only a small percentage of new businesses survive past the first five years. A failed business does not necessarily mean that you and your partners are poor planners or businesspeople. It just means that, for whatever reason, a particular concept did not work out.

Last week I wrote about the timing of filing a bankruptcy case when determining how to know if you should file bankruptcy. The focus of that was when to file in the context of the collection process - filing to avoid the execution on a judgment and to avoid the entry of a judgment entirely. The idea was to give the people reading the blog a sense of the collection process and what a bankruptcy filing would create the most protection for someone looking at difficult to manage debt issues . This week I want to continue examining the timing issue, but instead of looking at the collection process, look at timing issues through the lens of the Bankruptcy Code, and its requirements for filing. And I want to spend some time examining the mortgage foreclosure process and how foreclosure affects the decision of when to file a bankruptcy case .

In my last two blogs, I’ve written about some unexpected consequences that some of our clients experience as a result of filing a bankruptcy case.  These surprises come from different areas - from the fact that ACH payments can be discontinued to the fact that a lapsed car insurance policy can result in a safe driver being dropped into the risk pool when a new auto-owners policy is taken out.  This week I’ll continue to write about expecting the unexpected as a result of filing a bankruptcy case.

Absolutely not. Financial problems are so common that they touch almost everyone. Many people live paycheck-to-paycheck. So even a slight income disruption or a small unexpected expense is often devastating. One in four Minnesotans worry about money so much that they have PTSD-like symptoms. That figure is self-reported, so the actual number may be even higher.

In other words, if financial problems could affect your job, many of us would be out of work. That’s simply not a workable environment, so bankruptcy discrimination is illegal.

Bankruptcy gives fresh starts to distressed debtors. But it uses the least restrictive means to accomplish this goal. Property rights are sacred to many people in America, and that includes a contract between a debtor and a creditor. So, bankruptcy does not interfere with that contract.

Instead, a bankruptcy discharge removes the debtor’s legal obligation to repay debt. It does not affect the collateral consequences. Assume a judge discharges past-due university tuition. The school cannot do anything to collect the amount owed. However, it can withhold the student’s transcript until the debt is paid or otherwise resolved. A bankruptcy judge does not have the authority to order the school to release the transcript.

Last week I started writing about the collateral events in a bankruptcy case that can confuse, concern or surprise bankruptcy debtors.  I looked specifically at the fact that many creditors will automatically discontinue ACH automatic withdrawals out of the bank accounts of bankruptcy debtors and that many creditors will disable a bankruptcy debtor’s ability to pay bills online (by the way, many pay-by-phone services are discontinued, also).

This week I will write about some other “surprises” that debtors can find in a bankruptcy case.

Technically, the answer to this question is “yes.” However, there may be some debt that you do not want bankruptcy to clear.

There’s a significant difference between secured and unsecured debt. Secured debt includes things like home mortgages and auto loans. If the debtor violates the security agreement, the moneylender has the right to repossess the collateral. That right remains in place whether the debtor files bankruptcy or not. Unsecured debts are things like credit cards and medical bills. As outlined below, these debts sometimes have collateral consequences as well. But in most cases, they are quite limited.

One of the most common questions that I get from clients after we’ve gone through the process of preparing a bankruptcy case for filing at Kain & Scott is “what else should I know?”

It’s a perfectly understandable question - our clients have been with us at every step of the process of preparing their bankruptcy petition, schedules and statements.  They’ve spoken with us at the initial stage, where we put together a “game plan” for addressing their financial problems. They’ve been with us as our assistants verify the facts of their case to make sure the information that is on the petition and schedules filed with the court is complete and accurate.  And they’ve sat in with the lawyer on their case to make sure, as the lawyer and clients review the petition and schedules together, that the lawyer is satisfied that there are no legal issues that will create complications in the client receiving a bankruptcy discharge. We process a lot of information, together.  But many clients want to be sure that they’ve been fully informed as to what will happen when their case is filed and what they can expect after filing and after they receive their discharge.

Bankruptcy gives fresh starts to unfortunate yet honest debtors. This fresh start usually comes through a Chapter 13 repayment or a Chapter 7 “liquidation” bankruptcy.

Unfortunately, there is a presumption in the law that criminal and civil fines are related to dishonesty. That’s certainly not always the case. Some people make one poor decision under difficult circumstances. Others got mixed up in a bad situation they did not fully understand. Still others were simply in the wrong place at the wrong time. But the presumption of dishonesty still applies.

Raising a family in Minneapolis is not easy from an emotional or financial perspective. Statistically, wage growth barely keeps up with general inflation. In certain areas, most notably medical bills, wage growth rates are not even close to inflation rates. As a result, thousands of your neighbors file for bankruptcy protection every year. They understand that financial problems, like many other problems in life, only get worse if you ignore them.

Despite some recent changes to the Bankruptcy Code, this law still gives the honest but unfortunate debtor a fresh start. At Kain & Scott, we do much more than help people get this fresh start. We help them maximize the opportunity.

All bankruptcy wipes out debt. The type of bankruptcy you need to file usually depends on the type of debts you owe.

David Debtor had some unexpected medical bills last year. His daughter had emergency surgery out-of-network and he ran his car off the road one night. He now owes tens of thousands of dollars that he can’t afford to pay. He tried to retire the debt as best he could. But his payments hardly made a dent and put him behind in other areas. He’s not quite at the desperation point, but he is getting close.

Just before Laertes went off to Paris in Hamlet, his father (Polonius) gave him a slew of fatherly advice. One suggestion was “Neither a borrower nor a lender be.”

But most of us have ignored that advice. We are both borrowers and lenders. So, it’s very important for us to understand how bankruptcy affects both groups. Many of our previous posts focus on the rights of debtors in bankruptcy. That makes sense, because we are a debt-relief law firm. But we also need to examine creditors rights in bankruptcy. Believe it or not, moneylenders are people too.

Making the decision to file a bankruptcy case is never easy; however, bankruptcy may be the best solution to your debt problems.  Bankruptcy offers many advantages that other debt solutions do not offer. Although there are numerous advantages, there are also some disadvantages. To help you weigh your options, our attorneys discuss all of the pros and cons of Chapter 7 during your free bankruptcy consultation.  Below are some of the common pros and cons of Chapter 7 that apply in most cases filed in Minnesota.

In the last two blogs, I’ve written about the issues presented in a bankruptcy case when a small business faces financial difficulty.  And I’ve concentrated on the business, not the business owner, in writing about these issues.  In the last two blogs, I’ve spent some time looking at the issue of whether a business should remain open - it’s a critical first issue for business owners with money problems.  This week, let’s look at the issues that business owners face when the owners have decided to close the business and wind up the financial affairs of the business.

Wage garnishment is a very serious matter because so many Minnesotans live paycheck-to-paycheck. About half of Minneapolis families cannot pay a $400 emergency expense. The really bad news is that this figure is actually lower than it was a few years ago! As outlined below, Minnesota has very aggressive wage garnishment laws. As a result, after just one or two missed payments, many people are caught in a financial vice.

Just like it does in home foreclosure and many other situations, bankruptcy gives families both short-term and long-term solutions to wage garnishment issues. In this way, families really do get the fresh financial start which they deserve and the Bankruptcy Code guarantees.

Credit scores are a very vague concept to most people, yet they can hold so much power over your financial well-being. Almost everybody has a credit score, and like it or not, it can affect everything from being able to open up a new credit card to determining if you will be approved for a mortgage or rental property. If you are considering filing for bankruptcy, chances are your credit score has already taken a hit, and is lower than what is recommended. You are also likely worried that if you go through with a bankruptcy, your credit score will become even lower, to a point that is irreparable. We are very happy to tell you that this is not something you should worry about. 

This question has probably never been more pressing. In a pair of 2017 decisions (Henson v. Santander and Midland Funding v. Johnson), the Supreme Court significantly expanded debt collectors’ power under the Fair Debt Collection Practices Act. Before these two decisions, moneylenders often shied away from court cases. They did not want judges to scrutinize their unfairly aggressive tactics. Now, such fears may be a thing of the past. Many debt buyers may file suit after just one or two extremely threatening letters, even if these debt buyers have little basis for their actions.

Several months after one of the biggest tax code rewrites in U.S. history, the Treasury Department finally released an online tool to help taxpayers re-calculate their withholding amounts. Nevertheless, millions will owe money come tax time.

Earlier, the IRS did release revised tax tables that conveyed the same information. But information formats like that are difficult for people to understand. The proper withholding amount is very important, emphasized American Institute of Certified Public Accountants chief tax analyst Melissa Labant. Too little, and the taxpayer will owe a significant amount in April. Too much, and “you’re giving an interest-free loan to the government.” Cari Weston, another AICPA tax analyst, added that the more allowances a taxpayer claims, the less money the government withholds.

In our day-to-day practice at Kain & Scott, our attorneys will typically field a few contacts every month from business owners who are financially stressed.  The business owners typically have this, or a variation of this question: my business is in financial trouble, should the business file a bankruptcy?  It’s such a simple, and such a common question. One of the reasons the United States has a bankruptcy law is to provide a safety net from small business owners - to allow the business owners to take financial risks without having to worry about financial ruin if the business experiences significant reverses.  But while the question is simple, the answer is usually at least a little complicated. Let’s look at the factors that should be considered in making a decision as to whether to have a business file a bankruptcy case.

Legally, people in Minneapolis can file bankruptcy as many times as necessary. There are no filing limits. Multiple filings do have some adverse consequences, as set out below. However, this fallout is not as bad as some people think it is.

Besides, if properly done, bankruptcy is usually a once-in-a-lifetime proposition. A voluntary petition is a fresh start in almost every sense of the phrase. Actor Gary Busey, who is well-known for his “Buseyisms,” may have put it best in the wake of his own 2012 filing. He described bankruptcy as Bringing A New Knowledge Regarding Understanding Past Tribulations Concerning Yourself. That’s a very long way of saying that you have the power to reverse your financial fortunes, even though the filing itself was probably not your fault.

Bankruptcy is an investment for our clients. When finances are tight, anything is a significant investment. But the investment always pays off. The amount of money the client pays is nearly always inconsequential when compared to the tens of thousands of dollars of debt that is discharged. Furthermore, bankruptcy gives Minnesota families a fresh financial start. That’s something which is almost literally priceless.

One of the reasons people file bankruptcy cases is to preserve vehicle ownership. If the client has a car loan, a chapter 13 case in which the terms of the vehicle loan can be re-set to make the payment more affordable is often attractive.  Or some clients prefer the liquidation approach of a chapter 7, in which other, unsecured debts are discharged, thus freeing up money in the monthly budget to make the car payment easier to afford.

After filing any bankruptcy you could be face with a variety of legal, financial and/or emotional consequences. Sometimes good, sometimes bad. Regardless, let's start by taking a look at the legal outcomes of filing Chapter 7 Bankruptcy. 

If you’re afraid that filing Chapter 7 bankruptcy will prevent you from purchasing your dream home or concerned that you’ll be unable to replace a vehicle that was repossessed, don’t be! While some conditions do apply, it is still possible for you to buy a new house or car after filing for Chapter 7 in Minnesota.

And, if you file for Chapter 7 with Kain & Scott, you can take advantage of our Free 90 Day Credit Repair Program that will help you raise your credit score and obtain financing from one of our trusted Minnesota lenders to help you purchase the things your family needs.

Last week I wrote about why being able to file a chapter 13 bankruptcy case quickly is advantageous to debtors. Chapter 13 is often the “emergency” bankruptcy - in many cases that end up being filed as chapter 13s, a mortgage foreclosure is days away, or the repossession agent has been out looking for a client’s car to repossess.  Or in some cases, the repossession has already taken place and the owner has a short period of time in which to redeem the vehicle prior to the vehicle being sold at an auction.  So there are numerous situations in which time matters, and the time is short.  Being able to file quickly is an advantage - and at Kain & Scott we can file a case quickly and professionally.  So the question is, what is there about the Kain & Scott law firm that enables the firm to file a case quickly?

Just like consumer bankruptcy can stop home foreclosure, wage garnishment, vehicle repossession, and most other types of adverse creditor action, bankruptcy can also stop lawsuits. Even if the trial is scheduled for tomorrow, bankruptcy can halt it.

For many people, a creditor lawsuit is a remote, theoretical possibility. They know it can happen, but they do not believe it will ever happen to them. Suddenly, there’s an unfamiliar knock on the door at an unusual hour and someone, usually a Minnesota peace officer, delivers a summons.

It is so common in my practice to meet with clients who have been experiencing financial distress for a long time. The clients have been fighting to keep their financial heads above water for, it seems to them, forever.  I’ve told many people I meet in conference that my best clients are the people who have fought hard to stay out of a bankruptcy and resolve their financial issues informally with their creditors.

For the past six weeks we’ve taken a pretty “deep dive” into the nuts and bolts of bankruptcy. This week, I’ll try to wrap this up with a look at the function of the bankruptcy discharge - the “finish line” for bankruptcy. Again, the lens through which I will look at this issue is the twin policy goals of bankruptcy - to treat creditors fairly and to allow debtors to live with dignity.

Hundreds of your neighbors want to know the same thing, because medical bills are the leading cause of consumer bankruptcy in Minneapolis. For various reasons, these expenses have increased much faster than the cost of other goods and services, so the size of these bills catches many people off guard.

One of the main concerns our clients have about filing for bankruptcy in Minnesota is the protection of their privacy.

For the last three weeks, I’ve written about the function of bankruptcy to serve the twin purposes Congress set out in passing bills that codified bankruptcy law into the Bankruptcy Code: treating creditors fairly and allowing debtors to live with dignity.  I’ve written about why the bankruptcy debtor has to list assets and liabilities accurately in her schedules, about the specific features of chapter 13, the benefits of the automatic stay in bankruptcy and the requirement that the bankruptcy debtor list all of her creditors in her bankruptcy paperwork.  This week, I’ll continue to look at how bankruptcy law and procedure seeks to meet the policy goals of Congress.

Depending on the timing, bankruptcy’s automatic stay often stops eviction actions in Minneapolis, even if the wolves are already gathering at the door.

To fully answer this question, it’s important to understand how the eviction process works in the Gopher State. In most cases, landlords give notice of the defect and an opportunity to cure. Most Minneapolis evictions are based on unpaid rent. Some other common grounds include a lease violation (e.g. an unauthorized pet or roommate), drug activity, prostitution, weapons violations, or some other public nuisance, and a holdover tenancy. This letter is not a legal eviction notice, even if it contains the E-word.

In the last two weeks I’ve written about how bankruptcy "works" - the nuts and bolts of bankruptcy law so that the policy goals of bankruptcy law can be met. The two main underpinnings of bankruptcy are to treat creditors fairly and to allow debtors to live with dignity. My first blog dealt with the contents of the bankruptcy petition, schedules and statements - documents that must be filed in every bankruptcy case - and how the information contained in these documents further the policy goals of bankruptcy.

Typically, if someone else pays a person’s debts, the IRS considers such payments to be taxable income. Prominent exceptions include certain student loan repayments and gift repayments. Based on that analysis, many people think the answer to this question is a resounding “yes.” But it is actually a surprising “no,” because bankruptcy discharge is different from debt repayment.

Last week, I wrote about the nuts and bolts of bankruptcy - how bankruptcy “works.” In doing so, I concentrated on the paperwork any bankruptcy debtor has to file with the court: the bankruptcy petition, schedules and statements.  And I wrote about those documents through the lens of the two goals of bankruptcy: to treat a debtor’s creditors fairly, and to allow the debtor to live with dignity.  This week, I want to take a deeper look at how bankruptcy law attempts to satisfy those two goals.

Many seniors—perhaps after a lifetime of responsible spending and financial planning—find themselves in debt later in life. Typically, an upsurge in medical bills and related expenses causes seniors to fall behind on payments; because most seniors are on a fixed income, they sometimes lack the additional resources needed to pay for ongoing treatment or hospitalizations. With constant harassment from creditors and worries about liens and other aggressive collections actions, instead of enjoying your retirement you may end up even more stressed about money than ever before.

When you are contemplating a MN Bankruptcy filing, there are several things that you should not do before filing your petition. Taking certain actions immediately prior to filing for bankruptcy relief can hurt your bankruptcy case and turn a simple bankruptcy into a complicated case, at risk of having your bankruptcy discharge denied.

Most Americans are worried about money. In fact, for about a quarter of people dealing with debt issues, the stress is bad enough to create PTSD-like symptoms. Sometimes, a few hours of moonlighting per week and some financial sacrifices in other areas are sufficient to restore financial sanity. But in many other cases, that method will not work because there is simply too much debt. Making matters worse, moneylenders call and send letters almost daily, and each new communication is a little more threatening than the last one.

I meet with prospective clients every day to speak with them about their financial problems and if and how filing a Chapter 7 or Chapter 13 bankruptcy case would help resolve the specific problems confronting them.  At Kain & Scott, our MN Bankruptcy Lawyers have a structure to these meetings - the lawyers do what is in essence an intake interview. 

You are Filing Bankruptcy in Minnesota and, now that the ink is dry and your petition is filed, do you know what happens next?

What happens next after filing bankruptcy depends largely on whether you filed for Chapter 7 or Chapter 13, although there are similarities in both processes. For a closer look at what you can expect after filing your bankruptcy petition, read on!

Most of the people that I see at my office who are experiencing financial problems are feeling a significant amount of stress about their money problems. And many of the people with whom I meet are concerned about what will happen to family members if they choose to file bankruptcy. The concerns come from many fact situations.

Answering the question, “When should I file for bankruptcy” is a difficult thing to do when you are immersed in the overwhelming stress caused by debt. Worrying about how you will pay your bills and take care of your family, while dealing with aggressive debt collectors and threatening lawsuits, can quickly take its toll. This is precisely when you should meet with an experienced bankruptcy attorney. Doing so before things get out of hand and you are tempted to do something drastic will payoff in the long run.

When I meet with clients who are facing financial difficulty, I tell them that the first thing we have to decide is if they need to do something to resolve their debt issues, other than just using the same debt reduction strategies that they’ve been using up until the time we met. For the vast majority of the people I meet with, the answer to that question is yes - the reason they are in my office is that they don’t see a good financial outcome by maintaining the status quo.

Last week I wrote about the Requirements to File a Chapter 7 Bankruptcy Case. I wrote who (or what) can file chapter 7 case, the means testing requirement involved in chapter 7 cases, and the requirement that a chapter 7 debtor have a credit counseling briefing prior to filing a chapter 7 case. This week, I will look at the question that, while it does not come up often, can be quite important in the few cases where it is an issue: the venue of the bankruptcy case. Then I will write about what a chapter 7 debtor has to do to obtain a discharge.

The clients with whom I meet to discuss filing bankruptcy come in all ages, and genders. Some of my clients are very low-income wage earners; others have fairly high salaries. But my clients have one thing in common: they haven’t had very much good luck financially. For many of these people, filing a bankruptcy case, whether under chapter 7 or chapter 13, is the best option they have to resolve their financial issues. For a small percentage of these people who file bankruptcy cases, the years of bad luck that they experienced prior to filing is changed suddenly when they learn that they will inherit money or property from a deceased loved-one’s estate.

When you make the decision to file for bankruptcy in Minnesota, you are making the decision to erase your debts and change your life for good. But knowing which type of bankruptcy to file – Chapter 7 or Chapter 13 – can be confusing. Each type has the power to erase your debts and which is right for you is determined by your unique financial situation.

You’ve taken a major step in regaining your financial freedom by filing Chapter 7 Bankruptcy. Congratulations on being well on your way to becoming free from debt!

Does your debt make you feel like you are walking on a tightrope without a safety net? Are you in constant danger of falling further behind on your bills as you struggle living paycheck-to-paycheck?

Most of the potential clients our MN Bankruptcy Lawyers meet with at Kain & Scott have defaulted on at least one of the accounts they hold. For many of the people I meet, they have been able to stay current on some accounts, but because of their financial circumstances, they have not been able to maintain current payments on all of their accounts.

Nancy*, one of my previous clients, went into her bankruptcy kicking and screaming. Here is how she tells her story today: Filing a bankruptcy case was the last thing I wanted to do, but I had lost my job and the bills began to pile up. There was no end in sight. I hated imagining what my parents, neighbors, co-workers and friends would think when they found out that I filed bankruptcy. I tried to find another way out of debt; however, nothing I tried helped and some solutions even made the situation worse.

Are you in danger of drowning in debt in Champlin, Minnesota? Do you think bankruptcy is the lifeline you need to save yourself from being swept away by thousands of dollars in unpaid balances?

Last week, I wrote about the challenges of accessing credit after filing a Chapter 7 Bankruptcy case. I concentrated on retail charge cards and revolving credit cards as two commonly-desired credit products that can be accessed after a bankruptcy case has been filed, and the debtor has received a discharge. This week I will look at the mechanics of obtaining approval for credit cards. Then I will look at the challenges of larger credit products - particularly vehicle loans and real estate mortgage loans.

If you’re filing for bankruptcy in Plymouth, Minnesota, you’ve probably imagined how much better life will be once your debts are erased. You’ll have a comfortable home, nice car and a little money in the bank. Best of all, you can relax knowing that you are completely debt-free and have a fresh start to begin rebuilding your life.

I meet with many people every month who are struggling financially. Most of these people want to know if filing a Chapter 7 or Chapter 13 bankruptcy case is right for them. Some ask me “what would you do?” in their situation. The complete, thorough answer to this question requires me and my clients to look at their current situation carefully, and then analyze what the outcomes will be to them if they take no affirmative action to resolve their financial problems, what the outcomes will be if the clients decide to attempt an informal agreement with their creditors to pay back all or part of the debt owed without filing bankruptcy, and what the outcomes will be if they file a bankruptcy case - either Chapter 7 or a Chapter 13 case.

For the past three weeks, I’ve written about the requirements that are needed to file a chapter 7 bankruptcy case, and what is required to receive a chapter 7 discharge. Chapter 7 Bankruptcy is the most common chapter that consumer debtors use when they file a bankruptcy case. Chapter 7 is a relatively quick, cost-effective way to discharge debt for people who are being overwhelmed by their financial situation. Chapter 7 uses a “liquidation” approach to financial problems - a chapter 7 debtor does not repay her creditors in whole, or in part, and a chapter 7 trustee is appointed to liquidate any non-exempt property owned by the debtor.

The past two weeks, I’ve written about what the requirements are to file a chapter 7 bankruptcy. But as I wrote last week, it is one thing to be able to file a chapter 7 bankruptcy if a person is experiencing significant financial difficulty. But the reason to file is to receive a discharge of debt. So last week we looked at what a chapter 7 debtor needs to do after the case is filed to secure that bankruptcy discharge. This week we’ll wrap up the requirements to receive a discharge.

Wondering where to file for bankruptcy in Duluth, Minnesota? Envisioning a cramped dimly-lit office with an anonymous attorney frowning at your paperwork, while you fret, embarrassed, over the amount of your debt?

Traditional bankruptcy filing requires hours of paperwork and the process of finding an attorney, filling out forms, being trapped in stuffy waiting rooms, and playing phone tag with creditors, can take over your life. Who has time for that? Don’t you wish there was an easier way to file bankruptcy in Minnesota where you controlled the process, instead of the process controlling you?

Over the past four weeks, I’ve written about the legal consequences of filing bankruptcy. As I wrote when I started looking at the legal outcomes of filing bankruptcy, while the legal consequences of filing are certainly critical for my clients to understand, legal consequences are not the only factors in a client making a decision as to whether to file a bankruptcy case. For my clients, it is just as, if not more important for them to be clear about the financial consequences of filing a bankruptcy case. The effect of filing a bankruptcy financially is what we will look at this week. And I will concentrate on what happens to the consumer debtor (as opposed to the business debtor) when I write about the financial impact of filing bankruptcy.

Many people have misconceptions about bankruptcy and what it is designed for. Let’s shed some light on two aspects of bankruptcy. First, how bankruptcy protects us from malicious credit and debt collection harassment. Second, what a powerful financial tool bankruptcy can be to help you get your life back.

Bankruptcy is a subject most people want to avoid - people want to avoid the stress of having to deal with unmanageable debt. Bankruptcy is often treated as a taboo subject - only our closest friends and relatives know about our financial affairs, and there's usually an even smaller circle of people who know about our financial struggles.

At Kain & Scott, our firm helps hundreds of Minnesotans each year recover from many different types of unmanageable financial problems. When you’re drowning in debt, you don’t need to continue to struggle. Look to a professional, kind and helpful MN Bankruptcy Lawyer who understands your needs and is able to help. Each day that we put off resolving our overwhelming debt problems we are impacted negatively in a variety of ways - especially our credit rating, which is an essential financial tool for many of us. When your debts are piling up, you need help now. Here are some tips our staff has put together to aid you along the way and get you the help you need fast!

Every day, the MN Bankruptcy Lawyers at Kain & Scott see people who are in financial distress - the people with whom we meet find themselves in debt situations that are not easily resolved. Of course, the degree of the financial problem varies from client to client, but our clients come to meet with us because they know that their problems can’t be solved easily.

Over the past month, I’ve written about the History of Bankruptcy - from its ancient, biblical origins, through the ancient world and in Europe during the Renaissance period. I’ve paid particular attention to the history of bankruptcy in the United States. I’ve written about the inclusion of bankruptcy in the Constitution as the exclusive legislative prerogative of Congress, and looked at the attempts Congress made to pass a national bankruptcy law in 1800, 1841 and 1867 - all attempts at having an orderly system of bankruptcy in the United States, all eventually politically unpopular and all, eventually, repealed.

Last week, I wrote about the Bankruptcy Act of 1898 - the first “permanent” bankruptcy law in the United States. The 1898 law came about as Congress’s reaction to the financial panic of 1893. There had not been a national bankruptcy law since 1873 when the 1867 law, like the two previous attempts at federal bankruptcy law, was repealed. The abuses of the previous bankruptcy laws had hardened political opposition to a federal bankruptcy system. However, by 1898, creditors were experiencing extreme difficulty in collecting even a portion of debts owed to them in some states, due to those states’s debtor-creditor laws.

In the previous two weeks, I’ve written about the origins of bankruptcy law. In the first week, I wrote about the formation of debt forgiveness in the ancient world up to the ratification of the Constitution of the United States, and noted that the framers of the Constitution gave Congress the exclusive power to create uniform bankruptcy laws in the United States.

Last week, I wrote about the historical origins of the bankruptcy law - that the concept of a structured program of debt forgiveness was as old as Moses, and that Julius Caesar had formulated the first bankruptcy law that contained features that continue to this day. At the end of last week’s blog, I referred to Article I, Section 8 of the Constitution, that gave the United States Congress the sole authority to make “uniform” bankruptcy law. This week I’ll look at the historical development of bankruptcy law in the United States, from the time of our nation’s founding, to the present.

My last two blogs have discussed the “worst case” scenario any bankruptcy debtor encounters: the risk of not being granted a discharge, or if the debtor has already been discharged in a case, the revocation of that discharge. Since the reason to file a bankruptcy case is to receive a discharge of a debtor’s liability for debts, revocation or denial of that discharge is a complete frustration of the purpose of the bankruptcy. When a discharge is denied or revoked, then creditors can continue to collect against debtors as though the bankruptcy had never taken place.

There is a law, in effect in all fifty states of the United States, that allows people who have entered into contracts to borrow money or to receive credit to have their contractual obligations discharged - wiped out - without harsh consequences to the borrower. This is the Bankruptcy law, set out in the U. S. Bankruptcy Code, and at first look it seems to be a very unusual public policy. Don’t we want people to honor their debts? What about the financial well-being of lenders if they run the risk of a government-sanctioned method of allowing people who asked the lender for money with a promise of repayment to break that promise? So where does this policy come from? That’s what we’ll look at in this blog.

Last week, I wrote about some of the reasons a bankruptcy debtor can be denied a general discharge, or can lose a discharge after the court has entered it. The loss of a debtor’s discharge is a serious matter, and it usually can only happen when there has been active misconduct of a criminal, or at the very least quasi-criminal nature by the debtor relating to the bankruptcy proceedings, or the debtor’s assets. Since the reason people file bankruptcy cases is to receive a discharge of their debt, debtors need to know what kind of behavior leads to revocation of discharge so debtors do not put their discharge at risk.

There is a moment in many client conferences I have where the prospective client asks the question: “what if this bankruptcy doesn’t go through?" What if we can’t get this relief that we need financially?” It’s a common anxiety and I try to be reassuring to clients. If we (and by we I mean both our clients and our office) do our jobs properly, they don’t have to worry about “losing” a bankruptcy case. The case is filed properly, the client participates in the process appropriately and at the end of the process, whether in a chapter 7 or chapter 13 bankruptcy case, the client receives the benefit of a bankruptcy discharge.

One of the concerns we address with almost every client is the fear of losing assets in bankruptcy. The belief that you will lose your property when you file bankruptcy is a myth perpetuated by creditors and others to instill fear so you will not consider bankruptcy as a solution to your debt. However, here is the truth: your assets can be protected during personal bankruptcy.

In fact, filing a bankruptcy case can even SAVE your assets from being seized and sold by creditors. Individuals who may potentially face foreclosure or repossession can file bankruptcy to keep their house, vehicles and personal property. When you file a bankruptcy case, the automatic stay prevents creditors from continuing or starting actions to foreclose or repossess your property.

Bankruptcy and divorce are two concepts that most people never entertain as they are beginning their adult life. As we step out into the adult world to begin building our life, we never dream that one day we may be facing overwhelming debts that we cannot pay and a failing marriage. Bankruptcy and divorce can crush your dreams, your spirit and life as you know it.

In my last two blogs, I looked at debts that aren’t discharged in a bankruptcy case. Two weeks ago I looked at debts that are never discharged - student loans, most income tax debt, obligations to pay child support or spousal maintenance, to name a few. These debts are presumed to be non-dischargeable in a bankruptcy case. That means that the creditor does not have to bring an action in bankruptcy court to determine that these kinds of debts are not subject to a bankruptcy debtor’s general discharge; if there is going to be a judicial determination of dischargeability, the bankruptcy debtor has to bring the action to determine whether the debt can be discharged in the bankruptcy case, and the presumption is that the debt is not subject to discharge.

Last week, I wrote about 8 debts that a bankruptcy debtor may have that are not discharged, even if the bankruptcy client receives a “general” discharge. The kind of debts I wrote about - child support, most taxes, student loans, to name a few - are debts that are never discharged in a bankruptcy case.

People who file a bankruptcy with the types of debts that are never discharged must bring a lawsuit against the creditor in bankruptcy court if they feel, for some reason, that the debt in question should be discharged, despite its characterization. It’s up to the debtor to do this; if the debtor does nothing to contest the non-dischargeability of the debt, the bankruptcy debtor remains liable for the debt after discharge.

It’s not a bad idea to take a look at some people you know - people who are successful by almost any definition who have been through the Bankruptcy Process. These people had something unexpected happen to them financially that led them to file a bankruptcy case. When you know the financial stories of these actors, musicians, sports figures and politicians, it sheds light on why we have a bankruptcy law. It reinforces the idea that “regular” people facing financial difficulty should consider protecting their paychecks, their assets, and their family’s financial security through using the bankruptcy law.

The purpose of filing a Chapter 7 or Chapter 13 bankruptcy case is, plain and simple, to discharge debt - to make debt that has overwhelmed a debtor and his family “go away.” In order to receive a discharge, the bankruptcy debtor must comply with the provisions of the bankruptcy code. So legally proper papers must be filed with the bankruptcy court, all assets and liabilities identified and relevant financial transactions disclosed. The bankruptcy debtor has to attend a meeting with the case trustee, and must cooperate with the trustee and follow court orders to receive a general discharge.  

One of the worst things about having money problems is the feeling people with these problems have that they are alone and isolated - that no one else has these problems. It is easy, if you are in a situation where debt problems have overwhelmed you, to feel as though you are the only person facing these problems. Nothing could be further from the truth. The truth is that many famous people have filed for bankruptcy protection. Some well-known people filed bankruptcy before they became well-known; some filed at the height of their fame. It’s good to know that even people who seem to have everything have money problems. And it’s very good to know why a well-known person filed bankruptcy case - that can help explain the circumstances in which bankruptcy can help individuals with financial problems. Let’s take a look at some familiar names who have filed a bankruptcy case, and why.

Filing a bankruptcy case in Minnesota is, for almost everyone, a fairly straight-forward process: a person facing financial difficulties meets with an MN Bankruptcy Attorney well-versed in bankruptcy practice and, during that (or subsequent) meetings, the person decides to file a bankruptcy case. Once the lawyer is retained, the lawyer’s office, with the assistance of the bankruptcy client, prepares a petition, schedules and statements identifying the debtor, listing assets, liabilities, income and expenses, together with disclosures of any financial transactions in which the debtor has engaged during defined periods prior to filing the bankruptcy case.

Last week I wrote a second installment about Exemptions Available To Bankruptcy Debtors, under both the Federal Bankruptcy Code or state law. Last week, I looked at a number of exemptions available to debtors to protect tools of the trade, life insurance policies and the several exemptions that exist to protect the right of a debtor to receive government benefits, child support and maintenance. This week we’ll look at a few more Bankruptcy Exemptions. We’ll also try to draw a clear distinction between the exemption provisions of the Bankruptcy Code and Minnesota Statutes - and what do the differences say about the policies of the United States Congress (Bankruptcy Code) and Minnesota State Legislature (Minnesota Statutes).

Last week, I wrote about the Bankruptcy Exemption Laws contained in both the Federal Bankruptcy Code as well as the exemptions contained in Minnesota’s debtor-creditor statutes. As noted, Minnesota is one of 15 states that are “opt-in” states - states that allow bankruptcy debtors to choose between the Bankruptcy Code exemptions or state law to protect property in a bankruptcy case. We also covered the exemptions available for commonly-owned property: homestead real estate, motor vehicles, household goods and furnishings, clothing and personal effects and jewelry. This week we’ll take a look at the exemptions available to people filing a bankruptcy case for property that is not quite as commonly present for most people. And we’ll look at what the differences and similarities in the state statutes and the Code tell us about the philosophy of bankruptcy law.

Financial difficulty brings with it a lot of distress. A person who is facing overwhelming debt is searching for ways to cope with, and eventually, overcome the financial challenges with which he or she is dealing. Many individuals dealing with the stress of debt that cannot be serviced look at bankruptcy as an option to resolve financial problems. But in considering whether to file a bankruptcy case, these individuals often worry about whether the property that they own ­ whether it is real estate or personal property ­will be protected if the individual decides to file a bankruptcy case.

The past two weeks I’ve written about the Bankruptcy Code’s provisions that govern who can file a bankruptcy case and in what state a bankruptcy case may be filed. I looked at the definitions of who may be a debtor - and noted the differences between the very inclusive chapter 7 and the much more exclusive chapter 13. I discussed the venue of a case last week - and noted the requirements in Title 28 of the United States code that governs venue of a bankruptcy case: residence, domicile and the existence of the principal place of business and/or the location of the principal assets of a business.

MN Bankruptcy Law is very much rooted in the provisions of the Bankruptcy Code - the laws passed by Congress to regulate bankruptcy in the United States. There really isn’t a “common law” of bankruptcy - that is, there aren’t court decisions that establish substantive law and procedure in bankruptcy cases; rather, court decisions simply interpret the provisions of the bankruptcy code that governs the filing, administration and discharge of cases.

For the last month I have been writing weekly about the challenges and issues that surround closing a business that is no longer profitable. I’ve discussed the decision to close, the steps needed to treat employees and trade creditors correctly and issues regarding business withholding and sales tax and personal income tax. I’ve also written about business owners filing a personal chapter 7 bankruptcy to protect the owners from their personal financial obligations related to the business. Last week I wrote about the rare instances in which a business that operates as an LLC or corporation is well-advised to file its own chapter 7 case. This week I will wrap up this business-centric discussion by looking at the situations in which filing a chapter 13 bankruptcy makes sense for a business owner. But first, let’s take a look at the bankruptcy chapter that specifically protects businesses that file bankruptcy - chapter 11.

My last three blogs have dealt with the issues, problems and complications of closing a business that is no longer profitable. And I’ve written about using a personal chapter 7 bankruptcy as an option to protect an individual’s income and property from collection when business obligations have been personally guaranteed by a business owner. The focus has been on a personal chapter 7 as the most common option for a situation in which a small business has failed and the business owner now owes obligations to business creditors because the business can no longer honor the obligations. In this blog, I will write about the limited occasions in which an LLC or corporation should file a Chapter 7 Bankruptcy.

Many people struggle with their finances and are unsure as to how to seek relief. All circumstances are different and there are a variety of legal remedies designed to aid in your financial recovery. Because of the complexity of these matters it is advised you seek the knowledgeable professional advice of experienced Roseville MN Bankruptcy Lawyers to determine what is right for you. In this blog we will begin to look at some of the key points regarding both types of bankruptcies most commonly used by individuals at Our Roseville Location. Your future needs and goals may play a large factor in determining which type of bankruptcy is right for you and depending on your circumstances.

My last two blogs, Help For Small Business in Financial Trouble & Help For Small Business in Financial Trouble - Part 2, have dealt with the decision as to whether to close a business that is no longer performing financially as the owner hoped. 

Last week in my blog Help For Business In Financial Trouble - Part 1, I wrote about the decision many small business owners face: in light of the financial difficulties the business is facing, should the business close down? The decision is usually very personally painful for a person who has worked long and hard to own and operate a business. The feelings can be compounded when the reasons for business failure have to do with outside market forces more than the business decisions made by the owner. Imagine the hard-working video store owner from 1996 - today it’s very likely that the video store is no longer in business, regardless of whether the owner was a smart, capable businessman.

Last week I started talking about little “surprises” that can happen after someone files a bankruptcy case. At the end of last week’s blog, I started discussing the issues that arise after (and sometimes significantly after) a person has received a bankruptcy discharge when someone who filed a bankruptcy attempts to refinance a mortgage that was in existence at the time the bankruptcy case was filed. Often, the mortgage company will continue to report the mortgage as “in bankruptcy” long after the bankruptcy case is done and over. Some, not all, mortgage companies do this - although the companies that do report mortgages as “in bankruptcy” are often the large, nation-wide mortgage issuers.

One of the most rewarding experiences an individual can have is to start and grow his own business. Our economy depends on people deciding to become entrepreneurs. And people with a plan, good financing, attention to detail and a strong work ethic can position themselves to do well financially. But any successful entrepreneur will tell you besides all these attributes, the successful business owner needs a big helping of good luck. Good fortune does not visit every small business. And no matter how diligently a business owner follows processes designed to successfully start and grow a business, bad luck might dash all of the hopes and dreams the business owner had when she set out to start the business.

I remember the conversation clearly, even though it took place more than 10 years ago: I had just finished meeting with a client - let’s call him “Josh” - to review a draft of the petition and schedules our office prepared for his Chapter 7 Bankruptcy. We reviewed the draft carefully to make sure that we were listing all of the assets Josh owned and that he had listed all of the creditors to whom he owed money. We took a good look at his payroll records to make sure that his monthly income was being reported accurately. We made sure that any unusual financial transactions that took place shortly before our meeting were disclosed, and the requisite detail provided. Once we knew the information was accurate, Josh signed the papers...  

Bankruptcy has many negative connotations and is often perceived by society to be a sign of one’s failure to manage one’s finances effectively. But this could not be farther from the truth when we take a careful look at many of the contributing factors which force individuals to turn to Minneapolis MN Bankruptcy Lawyers for financial relief. Many institutions and lenders have gone through great lengths to structure their agreements and contracts with consumers so that the lenders may profit greatly from potential hardships a consumer may unexpectedly face.

For the past two weeks, I’ve written about the issue of timing in bankruptcy cases. Two weeks ago I looked at timing from the perspective of collection by creditors in my blog, How our Minneapolis Bankruptcy Lawyers Know When You Should File. Last week, I looked at timing as a function of the Bankruptcy Code, and talked specifically about timing the filing of a chapter 7 case. This week I want to discuss timing issues with chapter 13 cases.

Last week I discussed the timing of the filing of a Chapter 13 Bankruptcy case specifically in relation to mortgage defaults and foreclosure. Chapter 13 Bankruptcy is commonly filed by people with debt problems who are facing defaults in secured loans, such as home mortgage loans. The most common secured loan, though is a vehicle loan. Because of the retail price of both new and used cars, many if not most consumers have to finance the purchase of a vehicle.

Chapter 7 Bankruptcy is also commonly referred to as the “fresh start” bankruptcy. Chapter 7 is the most commonly filed consumer Bankruptcy in Minnesota for several good reasons. Immediately after you file a Chapter 7 you’re protected from any creditors trying to take property that secures a debt. Creditors are prohibited from obtaining a judgment for unsecured debt that can be turned into a lien against your property. You also get the option to keep any property that secures a debt or give it up to your creditor without having to pay them. Chapter 7 Bankruptcy can really give you some comforting power over your creditors. Here’s how:

At Kain & Scott, one of the biggest concerns that our clients have is what’s going to happen to their house when they file bankruptcy. However, there’s no need to be alarmed because most of the cases that our MN Bankruptcy Lawyers file are considered “no asset” cases. That means you get to keep everything, including your house. No matter where you live in Minnesota there are either state or federal bankruptcy exemptions designed to protect your property. And fortunately in MN our MN Homestead Exemptions are rather generous compared to most other states.

So your life is upside down and in financial turmoil. You can’t afford to satisfy your debts anymore and creditors are calling screaming at you for payments. You feel guilty, stressed out and depressed but at the same time you’re asking yourself, “What in the world am I supposed to do?” After realizing that doing nothing isn’t going to make things better and debt consolidation is a waste of time you come to the conclusion that filing bankruptcy is the best and/or only solution for you. Now you need a MN Bankruptcy Lawyer... So what’s next?

For most of the clients I meet at my Minneapolis Bankruptcy Law Firm, the most important question they have, after we finish analyzing their financial circumstances is whether it is advisable to file a bankruptcy case. That’s the primary question, and in most cases, the only one. But for some clients there are additional questions - should I wait to file a case, or should I file right away. And for a few clients, the question is whether they should file a case in Minneapolis, Minnesota, or some other state. Let’s take a look at the factors that enter into decision-making about whether to file, when to file and where to file.

In my last blog, Can I File Bankruptcy In MN And Keep My House Or Car, I discussed the social cost of debt - that is, what happens to our society as a whole when individuals find themselves in a financial position in which they cannot manage the debt they have incurred. I discussed the approaches people take when debt has gotten out of control. I discussed in detail the approach of essentially doing nothing to take the initiative to resolve the debt problem, and the cost to the individual who takes this approach and to society as a whole. At the end of the blog, I started to discuss the social cost of taking the most common approach to resolving difficult debt issues: increasing income and decreasing expenses to allow a more significant pay-down of debt out of a person’s monthly budget. 

In my last blog I wrote about the choices many clients have to face: whether filing a Chapter 7 or Chapter 13 Bankruptcy case is best for them. I discussed that there tends to be “chapter 7 income” and “chapter 13 income” and “chapter 7 debt” and “chapter 13 debt.” Now I would like to discuss the last of the three factors that should be considered in making the decision between chapter 7 and chapter 13 - what kind of assets does the client own, for just as there are income and debt distinctions to make, there are also “chapter 7 assets” and “chapter 13 assets.”

At the end of the last blog, Can i keep my house or car if i file a Roseville MN Bankruptcy, I wrote that even if a client of mine owned a vehicle that he or she liked, with a payment that the client could afford and the car was a new enough model that it was possible that the lender would repossess the car unless the client signed a reaffirmation agreement, I would still advise the client not to do so. Why? In my analysis, it all comes down to worst-case scenarios. By definition, with my bankruptcy practice I am not dealing with lucky people. My clients are my clients because things have not worked out as planned for them financially, or some sudden unanticipated event has taken place to create financial strain. My clients at our Bankruptcy Law Firm in Roseville are used to having worst-case scenarios come true.

Last week, I wrote about how bankruptcy cases interact with home mortgage and car loans in chapter 7 cases. The general rule is simple: as long as individuals in bankruptcy cases make their house and car payments on time, those individuals should be able to “keep” their homes and cars. The reason for this is that the equity in residential real estate and motor vehicles is almost always exempt under either the Bankruptcy Code or the Minnesota state law that deals with debtors and creditors. But while that general rule is true, individuals who are thinking about filing a bankruptcy case need to know that there are issues that these individuals should be aware of as they make a decision - first, whether to file a bankruptcy case and second, if they intend to keep their homes and/or their cars after their bankruptcy case.

One of the most common questions that potential clients ask their Bankruptcy Attorney when filing is what is the effect that bankruptcy has on continuing home and car ownership. It's understandable that people with debt problems are worried about retaining the place where they live and retaining the car or truck they drive. My typical response is to assure them. As long as you continue to make any loan payments associated with your home and/or your vehicles, you should be able to keep your home and your car. Now this is a good, sound, general statement. And it's true; but to be well informed clients need to know more about theinterplay between ownership of assets and bankruptcy.

I wrote in an earlier blog, Death, Taxes & Maple Grove MN Bankruptcy, that under certain circumstances, an individual who has tax liabilities can sometimes have these tax liabilities discharged in a bankruptcy case. I noted, though, that discharge is available only in very specific circumstances: the tax owed must be income tax, the tax liability must be “old” and returns must have been filed in a timely fashion. While some people who have tax problems meet these criteria, most of my clients do not. So the tax problem that they have is not going to disappear simply by filing a bankruptcy case. So what can we do about tax liability that isn’t discharged in a bankruptcy case?

Benjamin Franklin famously wrote “in this world nothing can be said to be certain, except death and taxes.” And death and taxes can add layers of complications to debt problems - and create issues for a person who is thinking about filing a bankruptcy case. Let’s take a closer look at the only two certainties in life.

If you’re an individual in Minnesota, then technically you don’t need an attorney to file bankruptcy. The constitution of the United States allows anyone to file bankruptcy on their own. This is also known as a “pro se” filing. However, you have to file several forms and schedules with the bankruptcy court so if you choose this route, you need to be very, very careful. The consequences of filing improperly are severe. You could be taking a chance at losing your car, your house or your retirement account. You have to know what you’re doing and that’s why hiring your Maple Grove Bankruptcy Attorneys at Kain & Scott is desirable.

Everybody asks our Bankruptcy Attorneys in Eden Prairie MN what they get to keep and what they have to lose after they file bankruptcy. However 98% of all bankruptcies that are filed are called no-asset cases, meaning that you will get to keep everything that you own. This is because most everything these days is exempt by an attachment from a creditor- contrary to back in the mid to early 1800’s before bankruptcy started. Prior to the formation of bankruptcy in the 1870’s if you owed someone a lot of money they would take you to court, get a writ of attachment, come to your home in Eden Prairie and literally take everything you own. The problem with this is that those people who lost everything would become a burden on the state; the government would have to support them. Well the government didn’t want to do that anymore so they created a list of things that are exempt from attachment. Meaning the creditors can’t get them or have them liquidated to pay your debt. We still have this list today.

The truth is that Bankruptcy is a negative credit event. However, it’s not life threatening and there are ways to immediately start rebuilding your credit after you file with your Roseville Bankruptcy Attorneys. Especially after filing a Chapter 7 Bankruptcy. Chapter 7 Bankruptcy, also known as the “Fresh Start Bankruptcy”, allows you to press the re-set button and get all of your unsecured credit card, medical, department store card and some personal loan debt discharged in only four months! Now a lot of people assume that their life is over at this point, at least financially, but that’s not the case. There are a lot things that you can do to start rebuilding your credit to start getting those larger loans and mortgages again.

The Bankruptcy Attorneys in Maple Grove, MN and I spend our workdays meeting with people who are facing significant debt problems. The problems have reached the point where the people I meet with can’t handle their debt. They are in default, in foreclosure, in suit, in garnishment, in levy. They are in trouble. My clients come to me with a range of emotions. But almost all of them share one emotion: they are embarrassed to be here in a difficult financial situation. The stress of the debt they have is part of the feeling they have. But there’s more to this bad feeling than that.

Filing Bankruptcy can be a very personal and challenging decision because of its legal, moral, emotional and financial dimensions. The bankruptcy process also requires you to organize everything that has to do with your financial life - your debts, assets and income. There’s work that we ask our clients to do to help us prepare a petition and schedules that are accurate and complete to file with the Bankruptcy Court. It can take some time and effort. However, very few clients regret filing bankruptcy - they regret waiting too long! Time and time again my clients tell me that filing was the best decision they’ve ever made. Their bankruptcy case allowed them to put everything behind them and get their life back. But bankruptcy is not for everyone. Before contacting one of the Kain & Scott Bankruptcy Attorneys in Roseville, MN for a free consultation here’s a few questions you will want to ask yourself first:

Facing the challenges of today’s tough economy can be stressful. Dealing with an income drop, divorce, business failure or medical issue can make it even worse. Any of these things can happen to anyone; if it does, it is very easy to acquire a severe debt problem. In fact, thousands of Minnesotans are struggling with various debt problems keeping them up at night worried about how they are going to make their payments. But it doesn’t have to be this way. If you’re dealing with significant debt and the stress it causes,the Bankruptcy Attorneys in Roseville, MN have the solution for you. 

An accident or severe medical catastrophe can happen in the blink of an eye.  You could hop in your car some sunny day after leaving your work in Maple Grove and all of the sudden here comes someone texting, not paying attention and BOOM! Now, your life is upside down at no fault of your own. The worst part is there’s not a whole lot that you’re guaranteed when it happens except a big bill. Medical expenses are not cheap and unfortunately most of the time they’re acquired unexpectedly and at inconvenient times.

Today, most of the Bankruptcies filed in Minnesota are either a Chapter 7 or Chapter 13. Determining which chapter is right for you will depend on your specific financial status including your debts, assets and income. A lot of people have the option to choose between the two but if you have higher than median income for a household your size, you might only be allowed to file a Chapter 13. No matter the case both are excellent options for resolving unsecured debt. However, they are unique in their own way and offer a variety of different advantages. If you have the option to choose between the two it will be important to know the differences so that you can make the most attractive decision for you and your family.

Wouldn’t it be nice to get rid of all your credit card debt and start fresh again? Could you imagine the peace of mind you would have knowing that you could wipe your credit cards clean and not have to worry about paying them back? If you’re like most Minnesotans it’s pretty easy to rack up large amounts of debt on your credit cards quickly especially if something unexpected happens. Let’s face it, you never know if something unexpected is going to happen that might cost you several hundreds or even thousands of dollars. Let’s say your vehicle breaks down, you get sick or are injured in an accident, your business becomes unprofitable or you maybe you get laid off from work. The bottom line is that these types of things can happen to anyone and they happen all the time.

It’s no surprise that VISA is a wordwide powerhouse in the financial industry but I bet you would be shocked to know how big they really are! VISA Inc. started their 2016 fiscal year off with over a whopping 857 million credit cards issued worldwide! That’s enough credit cards to wrap around the world twice! To top it off they ended their year in 2015 with over 14 billion dollars in gross profit and nearly 7 billion of that net profit! Unbelievable. That’s right I said BILLION. With that net profit, half of every BILLION dollars VISA sees, after every expense is paid, gets deposited directly into the bank account!

Declaring Chapter 7 Bankruptcy can be intimidating and stressful especially if you don’t know exactly how the Bankruptcy Process works. Unfortunately, the pressures of society can make you feel like a failure often leaving you down in the dumps. As such, you worry about what your life is going to be like after you file, what’s going to happen to your credit score, your house, the car you drive and most importantly the future of you and your family. However, remember bankruptcy can happen to anyone and you’re not alone! There are plenty of advantages of hiring a Bankruptcy Attorney to help you get your life back!

For decades Chapter 13 Bankruptcy has been developing a negative stigma. The critical view is that it’s the result of ignorance and irresponsibility. But why? The stereotypes and negative stigma that it evokes are false and unfair. At Kain & Scott the Bankruptcy Attorneys in Roseville, with over 47+ years of experience know better. The reality about people who file Chapter 13 Bankruptcy is quite the contrary and always has been. Chapter 13 was designed and sponsored by our government as a way for responsible people, aware of their debt problems, to resolve their debt and get their life back. There’s no question that Choosing Chapter 13 Bankruptcy is a great option, for any debtor, for three main reasons.

If your overwhelmed by debt, sick of creditors calling you and struggling to make your payments don't worry, you’re not alone. Millions of MN residents are struggling with debt and truthfully finding someone these days that is not is like finding a needle in a haystack – virtually impossible. 1 in 3 people carry credit card debt month to month and hundreds of thousands have debt in collections. Most of the time at no fault of their own. Wouldn’t it be nice just to eliminate it all? Could you imagine how much less stress you would have? Just imagine how well you could sleep at night! The good thing is that’s a possibility. When it comes to resolving overwhelming debt you have 4 options.

When you're experiencing a business failure, income drop, divorce or medical problem or any type of financial struggle that you feel like you just can't escape, you're not alone! On average this happens to thousands of Minnesota residents every year leaving them with their best option to file bankruptcy. Just last year over 10,000 Minnesotan's needed to file a Chapter 13 or Chapter 7 Bankruptcy to restore their 1st class citizenship again. It can happen to anyone. Even some of our own family members have filed bankruptcy. Fortunately, at Kain & Scott P.A., Maple Grove's nicest bankruptcy law firm, there are just 5 easy steps you need to take to get yourself on the road to a debt-free life again!

A common question we hear from clients we meet with before tax season is if it is better to file bankruptcy before or after they file their tax return. Many times they have heard from someone that if they file bankruptcy the court will take their tax refunds. This is the biggest concern most people have about filing bankruptcy and taxes. The truth is that filing bankruptcy does not directly affect filing tax returns and you should not wait to file bankruptcy based on a fear of losing your tax refunds. The consequences of waiting to seek bankruptcy relief can be very serious. You could be risking your home and other assets by waiting to file bankruptcy.

Are you putting off filing bankruptcy because you believe that the process is too complicated, too time-consuming, or too expensive? If these beliefs are preventing you from receiving the debt relief you need, please let us help. Our experienced bankruptcy attorneys will explain the bankruptcy process and tell you what you need to file bankruptcy. When we finish your bankruptcy consultation, you will have a much better understanding why filing bankruptcy is not as complicated, time-consuming, or costly as you have read or heard.

If you are unable to pay your debts, your creditors will begin to contact you to collect. These attempts typically begins with telephone calls. A customer service representative may call you and ask you to make a payment over the telephone or commit to a date you will make the payment. If you do not make the payment, the telephone calls become increasingly hostile and increase in number.

Completing a bankruptcy case can be a relief after the stress, anxiety, and frustration you experienced trying to pay debts that you could not afford to pay. Regardless of whether you filed a Chapter 7 case or a Chapter 13 case, you now have a fresh start to begin rebuilding your financial well-being for the future. Many of our clients have heard or been told that they would never qualify for a loan after bankruptcy, or that it would be many years and very difficult if they did qualify for a loan after bankruptcy. This is a common misconception about bankruptcy.

When you make the decision to file bankruptcy, your next thought is likely to be how long does bankruptcy take. Your attorney understands that you have been under a great deal of stress as you have tried to handle your debt problem on your own. The frustration, fear, and anxiety of dealing with angry creditors, abusive debt collectors, and the thought of losing your home, car, and other property causes emotional and physical stress; therefore, you want to know how long bankruptcy takes and how quickly can you get on with your life.

Are you considering filing a bankruptcy to solve your debt problems but you have heard from friends, family members, co-workers and others that bankruptcy attorneys can be difficult, harsh, and somewhat coldhearted? If so, we want to introduce you to our way of doing business as a bankruptcy law firm…

At Kain & Scott, PA, you - the client - are our number one priority. Each client’s situation is different; therefore, we take the time to get to know your individual financial situation so that we can help you determine the best way to resolve your financial problem.

A Chapter 7 bankruptcy has many benefits and is not as difficult to file for as you might assume.  It is also a big decision that you should not make until you have all of the facts about filing under Chapter 7.  Below are some highlights from our blogs discussing Chapter 7. If you want to know more, click on the title to read the entire blog.

Are you considering filing bankruptcy to resolve your debt problems? Do you have questions about the bankruptcy process? The Minnesota bankruptcy attorneys at Kain & Scott want to help you find an affordable solution to your financial problems.  We offer a free bankruptcy consultation so that you can get the information you need to make an informed decision on the best way to get back on your feet financially. If you are having difficulty paying your debts, ask yourself these five questions.

The following story may sound similar because many American struggling with credit card debt did not incur that debt by purchasing luxury items, taking expensive vacations, or buying unnecessary personal items. In many cases, a person struggling to pay credit card debt incurred that debt because of a financial crisis.

Are you struggling to pay your debts each month? Do you feel hopeless when you think about your financial situation? Do you wish there was someone who could help you with debt management in Eagan, MN?  If so, you are not alone.  Many people are facing the same debt management problems that you are facing. They do not have the money each month to pay their living expenses, bills, and debts.  The stress and anxiety from dealing with their financial problems leaves them feeling hopeless and defeated.

The first month you are unable to pay your bills, you may feel a little stressed but you assume you will simply catch up next month. The second month you are short on money to pay bills you may feel worse, but it is only a couple of months so you will catch up.  Unfortunately, the more time that passes, the harder it is to catch up on past due bills. This scenario may occur for a number of reasons; a loss of income, even a temporary loss of income, can quickly create a financial crisis.  If you or a family member suddenly becomes ill, the medical bills and lost time from work quickly deplete your savings. What can you do to get out of debt?

We often have clients come into our office and ask, "Why do I need to include all of my debts in my bankruptcy?" Some people want to pay back some of their creditors while others want to avoid certain creditors from knowing about the bankruptcy. For example, a client comes into the office for a bankruptcy consultation. When we discuss the types of debts she owns, she tells us that she does not want to include all of her debts in the bankruptcy case because she owes her parents money and she must pay that money back.  She also does not want her parents to know that she is filing bankruptcy. 

As part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress made consumer credit counseling mandatory as part of the bankruptcy filing process. A debtor must file a certification that states the debtor completed consumer credit counseling within 180 days of the filing of the bankruptcy case unless the debtor is exempt from the requirement to take the course. Exemptions are extremely limited and only apply in a very small percentage of cases.

In Minnesota, owning a boat is a rite of passage. You have probably saved up for years to be able to buy a boat but now a recent financial crisis (i.e. job loss, medical bills, divorce, etc.) has made it difficult to keep up with your bills. You just do not have any money left over each month after paying your necessary living expenses to pay your debts. You are worried that if you file for bankruptcy, you will lose your unnecessary assets such as your boat. You do not need to worry. Many boat owners file for bankruptcy relief and keep their boats they’ve worked so hard for.

It is easier than you think to get into trouble with credit cards. You begin with one card and before you realize it, you have several credit cards with substantial balances. You may have several major credit cards in addition to store credit cards. Retailers entice customers to open an account by offering a discount on your first purchase. Of course, you only receive this discount if you charge the purchase on your new account. You open the account to “save money” with the intention to pay off the credit card next month. Unfortunately, many people find themselves making the minimum payments even though their intentions were to avoid them. By the time the balance is paid off, you have paid more money in interest than you saved on your first purchase.

What is Debt Consolidation?

If you are struggling with debt, you may have considered debt consolidation but are unsure if it is right for your situation. Furthermore, you may be confused by the various types of debt consolidation. In its basic form, debt consolidation  combines several debt accounts into one monthly payment. For some people, this may be an affordable solution to debt problems; however, you should only make this decision after discussing all of your options with an experienced attorney.

Congratulations!  You have completed your bankruptcy case. You have taken the first step in improving your financial well-being for you and for your family.  Most debtors feel an overwhelming sense of relief when they complete their bankruptcy case.  They are free from the fear of losing their property, the anxiety of dealing with creditors and debt collectors, and the sense of hopelessness of never being able to climb out of debt. While you may be a little nervous about spending money, it is also a wonderful feeling to know that you can now afford the necessities your family needs. You can now focus on your life after bankruptcy rather than worrying about how you will pay your debts.

Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the bankruptcy Means Test did not exist.  The purpose of the Means Test was to help prevent bankruptcy fraud by preventing individuals with higher income levels from filing a Chapter 7 bankruptcy to discharge their unsecured debts.  Creditors lobbied congress to pass the Means Test as a way to require individuals who DO have disposable income to pay back some of their debts in a Chapter 13 case instead of filing for a Chapter 7. Requiring those with disposable income to pay back  a portion of their debts in a Chapter 13 case provides a safeguard for creditors and reduces bankruptcy fraud.

Almost  every person who comes into our office for a free bankruptcy consultation with one of our attorneys asks the same question, “Will I lose property if I file a bankruptcy?”  After our attorneys address this common bankruptcy question (most debtors keep all of their property), one of the next common follow up questions from the person is, “Is it difficult to buy a car after bankruptcy?”

Have you fallen behind on your mortgage payments and the mortgage company is threatening foreclosure?  Have you been served with a foreclosure complaint or is your home scheduled for a foreclosure sale?  If so, you are not alone. You are one of thousands of people in Minnesota who are facing losing their home through a foreclosure process.

Many people ask us, “Will filing bankruptcy affect my spouse’s credit?” This is a common question we hear in our law firm when one spouse needs to file a bankruptcy case but the other spouse does not. The concern that one spouse’s debt problems will negatively affect the other spouse is a normal concern; however, there are many cases where one spouse can file bankruptcy and the other spouse is not affected at all.

Getting out of debt is a great feeling. Many of us want to get out of debt but we do not know exactly where to begin. Having a plan to get out of debt is the first step. When you have a plan and specific goals, it helps you  focus on the steps that you must take to achieve your financial goals. Below are several ways you can improve your financial well-being by taking control of your finances to get out of debt.

As part of the bankruptcy reform in 2005, Congress enacted a provision in the Bankruptcy Code that requires debtors to complete a credit counseling course, also known as a pre-bankruptcy course, prior to filing bankruptcy. Regardless of the reason why a person may need to file for bankruptcy relief, each person must choose a consumer debt counselor to complete the credit counseling course.

In today’s world, it is oftentimes necessary to take out some form of credit to pay for necessary items such as schooling, vehicles, a home, and emergency needs such as new tires for your car. In times of need, this available credit can be very beneficial. However, when you look at credit from the other side, this credit is now a debt you owe to a creditor. Owing debt is in no way a negative thing; in fact, most everyone you know probably owes some form of debt. If you find yourself in over your head with the debt you owe, a bankruptcy may be the relief you need.

When most people walk into their initial bankruptcy consultation they don’t know what to expect, and in turn this can create some nervous feelings about what is going to happen. A bankruptcy is a big step to take on the road to financial freedom, so here at Kain & Scott we want to make sure that we make our clients as comfortable as possible. From the moment you walk in, you will be treated with the respect, courtesy and dignity you deserve. From the initial greeting with our receptionist to the handshake at the end of our meeting, you will feel comfortable and taken care of.

Choosing a Minnesota bankruptcy attorney is a big decision. With there being hundreds to choose from, how do you make sure that the one you pick is right for you? Some factors you may want to consider when choosing an attorney are:

When you file a bankruptcy under Chapter 13, a Chapter 13 trustee will be assigned to your case. Most people refer to this person simply as their “trustee” or “Chapter 13 trustee” but the exact title given to this person by the United States Trustee’s office is the “Chapter 13 Standing Trustee for the District of Minnesota.” There are two Chapter 13 trustees that serve in Minnesota. Each trustee is assigned a specific jurisdiction.

William Kain was born and raised in St. Cloud, MN. He came from a modest home where his parents made financial sacrifices to make sure that their children were provided for. Bill greatly appreciates the sacrifices they made, because he enjoyed going to school and was able to obtain a law degree from the University of Minnesota Law School after graduating from Saint John’s University.

In 1982, after graduating from law school, Bill came back to St. Cloud to practice. Starting off Bill’s focus was not on bankruptcy. However, when the demand for bankruptcy work increased due to the financial crisis that occurred in the agriculture community, he decided to give it a try. From the first bankruptcy case he filed he knew it was a rewarding area of practice for him because he enjoyed working with the clients and enjoyed the end results.

The first step in understanding your credit score after bankruptcy is to understand how your credit score is calculated. Credit scores are not as complicated as some of us assume. Credit reporting agencies combine information from your credit history with your current financial condition to calculate your credit score. Credit scores are a very important element of your financial well-being as they are used to determine whether you are eligible to receive credit and the interest rate that will be applied to credit that you receive. However, credit scores can now affect several other areas of your financial life including rental applications, insurance rates and cell phone contracts.

Bankruptcy is and has always been intended as a way for people who are struggling with debt to resolve their debt problems and receive the relief they need to rebuild their lives. In order to help people and businesses overcome debt problems, Congress enacted bankruptcy laws to provide a legal means of handling debt. It divided bankruptcies into six different chapters. Each bankruptcy chapter has its own set of requirements for eligibility as well as its own advantages and disadvantages for the debtors. Knowing what chapter of Minnesota bankruptcies to file is something that an experienced bankruptcy attorney can help you determine based upon your unique financial situation and your long-term financial goals.

If you are facing a serious surgery, would you be willing to drive an extra hour or two to have one of the best surgeons in Minnesota perform it?  Of course you would! Maintaining your health is one of the most important things that you can do for yourself.  Not only is your physical health important, but your financial health is as well. The Minnesota bankruptcy attorneys of Kain & Scott, P.A. help individuals throughout Minnesota in addition to the St. Cloud, Brainard and surrounding communities get their financial health back on track.

When you are struggling to pay your debts, the idea of losing tax refunds after bankruptcy is frightening.  Some people rely on their tax refunds each year to make necessary repairs to their home or vehicle, pay for medical checkups or buy clothes and other necessities for their children.  We often have clients say that they want to put off filing a bankruptcy case because they are worried what will happen to their tax refunds after bankruptcy. 

In some instances, overwhelming debt develops when consumers are unaware of how much they are spending. Other common reasons include job loss or health problems that drastically reduce available funds. Whatever the reason, when debt starts to consume your life, bankruptcy can provide a fresh start and a clean slate to begin rebuilding your finances. People oftentimes become overwhelmed with debt due to unexpected medical problems, divorce and other life events. One way to become more aware of your finances and prepared for unplanned events is by starting a household budget.

Under the Bankruptcy Code, spouses may file joint bankruptcy petitions or either spouse may file individually. Two of the most common reasons couples choose to file individually include:

Filing bankruptcy is an important decision; it can be the first step in resolving your debt problems so that you can focus on recovering and rebuilding your finances. We understand that you may feel nervous about meeting with an attorney to discuss bankruptcy options. We also understand that you may have doubts about whether bankruptcy is right for you, especially if you are considering a Chapter 7 bankruptcy case.

Many debtors are uncertain about the role a trustee plays in their case, so I’ve asked one of my previous clients to share his thoughts.

Do you know what to do before filing bankruptcy? Most people know very little about the bankruptcy process, unless they’ve been through it firsthand. The only information an average person has about bankruptcy is what is in the media or what other people are saying. One of our objectives is to educate individuals this process, including the steps that should be taken before filing bankruptcy. We believe that if you know what to do before filing bankruptcy, your concerns and stress about the entire process will lessen significantly.  

Are you considering filing a personal bankruptcy? If so, I’d be willing to bet you feel like you are all alone; however, that is far from the truth. Often, when you are facing a problem, you feel as if you are alone and no one understands your situation. It is very easy to feel this way when dealing with overwhelming debt. I’d venture to say the vast majority of our clients have felt this way at some point during their struggle with debt. The frustration of not being able to pay your bills combined with the fear of losing everything you worked so hard to build is terrifying. It may seem like you are fighting an army of creditors and debt collectors with no one on your side to help you.

Personal Bankruptcy Filing Statistics

Thousands of Americans file for bankruptcy relief each day. The statistics show that bankruptcy filings have decreased in the past few years; however, the number of individuals seeking personal bankruptcy still falls in the hundreds of thousands. Over one million Americans filed for bankruptcy relief in 2013. Of that number, 14,295 of those filings occurred in Minnesota. For many, filing a personal bankruptcy remains a cost-effective and efficient way of dealing with debt.

When you make the decision to resolve your debt problems through bankruptcy, the next step you will need to take is to choose a bankruptcy attorney. The attorney that you choose is one of the most important decisions you will make after you decide to file a bankruptcy. Below are 10 questions that you should ask before hiring a bankruptcy attorney. 

1. Is Bankruptcy All They Do? 

Would you let your family physician perform heart surgery on you or your family? Of course not! The same principle applies to the professionals you lean on during your financial illness. Bankruptcy is not just what we do, it’s ALL we do. Because bankruptcy is all we do, we are good at it.

Financial problems can happen to anyone, for a variety of reasons. One of the most common reasons is job loss. I’d like to share a story about job loss, and overcoming the fear of friends, family and employers knowing that bankruptcy was filed.

A Story of Financial Trouble Caused By Income Loss

My name is Karen and a few years ago my husband and I were unsure what to do about our financial problems. My husband, Chris, had lost his job and we were behind on all of our bills. We were able to keep our heads above water until his unemployment compensation ended and he still did not have a new job. My salary was not enough to pay our monthly bills and living expenses, so we started falling behind on our bills. At first it was just the credit card bills, but then the mortgage and car loan soon followed.

We were facing foreclosure and had no idea where to turn. That is when we decided to schedule a free bankruptcy consultation. We had no idea how we would feel after bankruptcy, but we know it had to be better than what we were feeling right now.

There are a few things debtors can do before filing bankruptcy that can end up hurting their bankruptcy case. In some cases, those actions taken before filing for bankruptcy can result in the loss of property or not receiving a discharge.

Depending on the individual case, the number of pages in a typical bankruptcy petition and schedules is between 50 to 70 pages. The majority of the pages consist of your list of creditors. Each creditor that you owe on the day that you file your bankruptcy case must be listed in your bankruptcy schedules. Therefore, if someone has 20 creditors, his bankruptcy schedules will not have as many pages as someone who has 50 creditors.

Some people may believe that they are eligible for bankruptcy regardless of their current financial status — they are partially correct. Others believe that the changes in bankruptcy law that came with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made it impossible for most people to find debt relief through bankruptcy — they, on the other hand, are completely wrong. While changes in the bankruptcy laws did restrict some of the eligibility requirements, it did not remove the right of any individuals to seek relief from creditors through the protections offered in bankruptcy.

The Eligibility Confusion

The confusion can be summed up in two words: media and creditors. Creditors, with the help of media outlets, did a fantastic job of convincing most Americans that if they did not file bankruptcy before October 2005 when the new bankruptcy laws took effect, they would not be able to file bankruptcy (or that filing bankruptcy would be much more difficult).

While it is true that the new bankruptcy laws did contain some significant changes, experienced bankruptcy attorneys had already learned the new rules and laws and were ready to continue helping debtors find debt relief through bankruptcy.

When you are struggling to pay bills and to make ends meet, it may feel like you are alone. However, consumer debt statistics prove that you are not alone. Individuals throughout the United States continue to struggle to pay their bills each month. As unemployment continues to be a problem and individuals suffer without adequate health insurance, consumers are forced to take on more debt in order to pay for basic necessities such as food, shelter and clothing.

Managing credit cards after bankruptcy can be a tricky matter. Some individuals are so fearful of going through bankruptcy again that they avoid using credit cards at all; however, this is not an effective way to rebuild credit after bankruptcy (which is a goal you should work toward after receiving a bankruptcy discharge). Other individuals jump back into credit without a clear idea how to manage credit wisely. This article is for all of those individuals, as well as those looking for some guidance and advice on how to manage credit cards responsibly.

If you are drowning in debt, you are not alone. Millions of Americans across the country are suffering from debt problems due to loss of jobs, medical bills or the loss of a spouse. Life is fluid and we never know what to expect around the next corner.

Yes, you can file your own bankruptcy case; however, you probably will not get the results you want as efficiently as is possible. Filing a bankruptcy case can be a very complex matter, especially if it is a Chapter 13 case. In addition to filing the bankruptcy petition, schedules and statements that are required in all bankruptcy cases, you must also create and propose a repayment plan. Repayment plans are complex and require more than simple math to calculate. The benefits of having a Chapter 13 attorney far outweigh the costs you think you might save by trying it alone.

Debt is one of those situations that cause people to place blame, become depressed and experience intense emotions, such as relentless anger and the feeling of hopelessness. These then trickle into your daily life and cause poor performance at work or tense marital interactions, for example. A challenging financial situation can have a snowball effect, tirelessly enhancing your stress and contaminating your life and relationships.

Quality bankruptcy lawyers do more than eliminate your debts - they aim to treat the cause. They devote their time and attention to answering your questions about bankruptcy, providing support, guiding you through each step of bankruptcy and preparing you for life after bankruptcy. Unlike many law firms that try to split their time between several areas of law, we focus 100% on bankruptcy. Because we focus our practice solely on bankruptcy matters, we go beyond helping our clients with debt elimination – we offer counsel on how to have a stronger financial future once you receive your bankruptcy discharge.

What are the Five Top Reasons for Filing Bankruptcy?