If you either had real estate transferred to you or you transferred real estate to your ex-spouse in a divorce, there are typical steps you should take to record ownership before filing bankruptcy. When you file bankruptcy you have to disclose all of your assets and any transfers done in the last two years, including transfers made within the divorce. If you do not have your ownership interest in real estate properly recorded, it could cause issues within your bankruptcy case. This blog will go through options you can take to properly record your ownership interest. 

In a Chapter 13 bankruptcy, a debtor pays as much as he or she can afford each month, in a three to five year repayment plan. Typically, the debtor only pays a fraction of all of their total debt, and upon successful completion of the Chapter 13 bankruptcy, will receive a bankruptcy discharge that wipes out the majority of their remaining debt (with exceptions, such as child support debt or student loan debt).

In a chapter 13 bankruptcy case, the debtor (the legal term for a person who files for bankruptcy) pays all of their disposable income, each month, towards their debts in a three to five year repayment plan.

A Chapter 13 bankruptcy is a great tool to resolve debt issues. In a Chapter 13 bankruptcy, an individual contributes all of their disposable income in a three to five year repayment plan. Upon successfully completing the Chapter 13 plan, the debtor will receive a bankruptcy discharge, which forgives most of their remaining debts. In a Chapter 13 bankruptcy, a debtor only has to make payments to the bankruptcy trustee, and will not have to give up any property. However, in order for the bankruptcy court to confirm a debtor’s repayment plan, the plan must provide that the debtor’s creditors receive at least as much as they would have received if the debtor had filed a Chapter 7 bankruptcy and had to turn over the property to the trustee to pay creditors. This is known as the “best interests to creditors test.”

A person who files a chapter 13 bankruptcy case is required to pay as much as they can afford towards their debts in a three-to-five year repayment plan. After successfully completing their plan, the person who filed for bankruptcy (aka the “debtor”) receives a discharge wiping out their remaining debts, with certain exceptions (e.g. student loans and child support).  There are a number of factors that determine exactly how much the debtor will have to pay, each month, in order for the bankruptcy court to “confirm,” or officially approve, their repayment plan and allow the debtor to receive a discharge. 

Filing for chapter 7 bankruptcy is a great option for many Minnesotans who are struggling to manage their debts.  People who earn less than the median income, based on their household size, are permitted to file a chapter 7 bankruptcy case. The beauty of a chapter 7 case is that the debtor (what you call a person who files for bankruptcy) is not required to make payments to their creditors like they do in a chapter 13 repayment plan. The catch is that in some case, the debtor may have to turn over certain property for the trustee to liquidate (sell to convert to cash) in order to pay their creditors.  

 When a person files a chapter 7 or chapter 13 bankruptcy case, they are asking the bankruptcy court for relief from their debts.  In a chapter 7 bankruptcy case, a person is completely relieved from most of types of debts by receiving a legal “discharge” of their debt, typically within 3 to 4 months after their case is filed, without the need for making any payments to their creditors. In most chapter 7 cases, the “debtor” (what you call a person who files for bankruptcy) is able to keep most, if not all, of their property in exchange for receiving their discharge. In a chapter 13 case, the debtor does not have to give up any property, but must make regular payments, each month, towards their debts, in a three to five year repayment plan, after which they receive a discharge of most, if not all, of their remaining debts. 

When you file bankruptcy you are listing under penalty of perjury you have included all of your creditors in the case. Unfortunately, this means you cannot pick and choose who you file on. 

A Chapter 13 bankruptcy allows a debtor to cure mortgage arrears in a three-five year repayment plan. It is a structured and organized plan in which the debtor typically makes monthly payments to the bankruptcy trustee to pay back a portion of their unsecured debt, and the amount that is not paid off at the end of the plan is simply wiped out, tax free. If a debtor pays mortgage arrears in their Chapter 13 repayment plan, the debtor may also benefit from working with their mortgage company to modify their mortgage.

Lack of disclosure in a bankruptcy filing can negatively impact a debtor. Clients will often question why they need to disclose certain information or if it would be better to “hide” certain assets from the court.  

Congratulations! Your bankruptcy discharge has gone through. The discharge in your bankruptcy is the order that tells your creditors you are no longer liable on the dischargeable debts.

The U.S. Supreme Court held that inherited IRAs do not qualify for the section 522(b)(3)(C)  exemption.  

That opinion makes clear that a beneficiary faces a choice between (1) "rolling over" the IRA, thus making the IRA subject to the tax and bankruptcy rules for traditional and Roth IRAs, or (2) keeping the IRA as an inherited IRA subject to different tax and bankruptcy rules for inherited IRAs.

A general rule of thumb prior to filing bankruptcy is try not to sell, transfer, or get rid of your property unless you have discussed it with your bankruptcy attorney first. The reason is, transfers, sales and even trade-ins prior to filing are heavily scrutinized by the case Trustee. 

The primary purpose of filing bankruptcy is to award a fresh start to an honest but unfortunate debtor. Occasionally, a debtor may request the dismissal of their chapter 7 case if the debtor would be worse off if he stayed in the chapter 7 case than if the case were to be dismissed. However, the case cannot simply be dismissed because the debtor is unhappy with the outcome of the chapter 7 case, the debtor needs to have acted in good faith. 

When a debtor files a Chapter 13 bankruptcy, they are provided significant financial relief from their creditors. In a Chapter 13 bankruptcy, debtors make affordable, monthly payments towards their debts in a three to five year repayment plan. After their Chapter 13 plan is completed, debtors receive a bankruptcy discharge that wipes out their remaining debts. Immediately upon the filing of a Chapter 13 bankruptcy, debtors are protected from their creditors by the automatic stay – this prevents most creditors from taking any legal action in collecting from the debtor for unpaid debts. The automatic stay prevents creditors from calling debtors, sending bills, filing a lawsuit against them, and it also prevents creditors from enforcing court judgments against debtors (i.e. by garnishing their wages or levying their bank accounts).