It is not unusual for Minnesotans to fear filing Chapter 7 Bankruptcy. Prospective clients often come to LifeBack Law Firm feeling very afraid. We know how you feel. Most of our former clients felt the same way you do now. But do you know what they found? They found that LifeBack Law Firm has the most kind and helpful bankruptcy staff in Minnesota. LifeBack Law Firm clients get spoiled by the staff. We honor the courage it took for you to reach out for help with a debt problem.

One of the questions that we commonly hear is whether there are types of debt that cannot be discharged in bankruptcy. Unfortunately for many debtors, there are, indeed, types of common debts that cannot be discharged in bankruptcy, as well as some uncommon types. Over the course of the next several blog posts, we will discuss some of those debts. Note: this is not meant to be an all-inclusive list.

If you have not filed your taxes for the upcoming tax season, and you are thinking about filing for bankruptcy, you may wonder if you can file your taxes and keep the refund, if you are entitled to receive a refund. Whether you are able to keep your tax refund, depends in part on the type of bankruptcy that you file. It also depends on the value of your total assets and your particular financial circumstance. There are two types of bankruptcies in the bankruptcy world.

Many people wonder how filing for bankruptcy will impact their bank accounts. In many cases, people have checking and savings accounts with banks, and also have debts owed to the bank such as credit cards, personal loans, car loans, and home mortgage loans.

If a person does not have any debts with the bank, they can continue to maintain and use their bank accounts, as the bank is not a creditor impacted by the bankruptcy. However, if the “debtor” (person filing for bankruptcy) owes debt directly to the bank, the bank will be considered a creditor in the bankruptcy case, and whether the bank decides to close the debtor’s bank account or allow them to continue using the bank’s services depends on the amount of debt owed to the bank and the type of debt owed to the bank. 

A chapter 13 bankruptcy case is a three to five year repayment plan wherein the debtor makes monthly payments towards their debts. After successfully completing their repayment plan, the debtor’s remaining unsecured debts are discharged, with some exceptions (i.e. student loans). Once the bankruptcy court “confirms,” or officially approves, the debtor’s repayment plan (typically a few months after their case is filed), the debtor is bound to contribute all of their disposable income towards their monthly payments.

There is a process and procedure for serving defendants and initiating a lawsuit. Plaintiffs do have to follow the correct procedures for proper service. Some individuals are successfully sued and a judgment is awarded to the plaintiff without any knowledge by the defendant. The defendant only becomes aware of the judgment when the creditor begins to enforce the judgment through a bank levy or a garnishment. The question I receive from debtors is: how can they vacate or remove the judgment because they were not properly served with the lawsuit.

In my last post, we discussed the first bankruptcy code in the United States, the Bankruptcy act of 1800; in this post we will turn to the second incarnation, The Bankruptcy Act of 1841. Clearly, congress was not interested in creative nomenclature. Nonetheless, there were other improvements in the content of the new code. First, debtors could now file bankruptcy for themselves, voluntarily. Second, bankruptcy was available to individuals rather than just merchants. Third, the more informal processes utilizing administrators was left behind in favor of using the district courts. 

When a person files a chapter 7 bankruptcy case, they often have secured debts. These types of debts are secured to certain property, known as “collateral,” which can be taken to satisfy the debt if the debt is not repaid by the borrower.  Home mortgages and car loans are examples of secured debts as the lender retains a “lien” on the home or car (the collateral) and can foreclose on the home, or repossess the car, if the borrower defaults on their monthly payments on the debt. 

Carefully considering when to file your bankruptcy can maximize the benefit you achieve from the filing. There are many factors that may speed-up or delay the need to file. 

If a debtor is being represented in a bankruptcy they should allow their bankruptcy attorney to work for them, and the only way their attorney is able to provide adequate representation is if they know all the details about the debtor’s case. If a debtor chooses to omit certain transactions or details then the attorney will not be able to advise appropriately regarding those transactions which could be problematic in the case. 

When you file bankruptcy, it can be a complex and emotional process, especially when it involves surrendering a car. If you’re struggling with car payments or owe more on your car loan than the vehicle is worth, surrendering it during bankruptcy might be a viable option. This comprehensive guide will help you understand the process, potential benefits, and considerations for surrendering a car in bankruptcy in Minnesota.

     If you are thinking about filing bankruptcy in Minnesota, think LifeBack Law Firm. Why think LifeBack Law Firm? LifeBack Law Firm has Minnesota’s most kind and helpful bankruptcy staff in Minnesota. How do we know this to be true? Just read the Google reviews left by your friends, neighbors, and family who has used LifeBack Law Firm to help them get their lives back. The last thing you want when you file bankruptcy is to be judged by bankruptcy lawyers and staff for filing bankruptcy.

A Chapter 7 bankruptcy works as a quick reset button – all of your unsecured debt will be wiped out in approximately 3-4 months, from the date your case is filed. Unsecured debt includes credit card debt, medical bill debt, and personal loans. This sounds exciting, as it certainly provides you with a fresh new start. Instead of paying your credit card bills, you can simply wipe out the remaining debt you have. You can obtain a new credit card after you receive your bankruptcy discharge, and rebuild your credit score by using the credit card and paying it off every month. 

In my last post, we discussed whether paying back debts is a moral issue – now let’s turn that question to the issue of interest. It is believed that interest rates originated as early as 2400 BC and were primarily used to stimulate agricultural and urban development. Aristotle viewed money not as a good in itself, but primarily as a means of exchange, and so viewed “money begetting money” as unnatural. In a similar vein, Plato saw the potential for interest leading to social instability – perhaps like the municipal bankruptcies we discussed in the last post. 

One of the benefits of a Chapter 13 bankruptcy is the ability to pay mortgage arrears, past due house payments, through a Chapter 13 payment plan. But, can second mortgages be removed in a Chapter 13 bankruptcy? Many people have multiple liens on their house, because they have taken out a second or a third mortgage. Often times, people take out a subsequent loan against a house that is already mortgaged, in order to pay for large expenses, such as buying a second house, or paying for a wedding.

Bankruptcy provides tremendous relief to people who become unable to pay back their debts. After the debtor receives their bankruptcy discharge, their creditors are forever legally prevented from undertaking further debt collection efforts against the debtor, with certain limited exceptions (i.e. generally student loan debt, domestic support obligations, and most income tax debt remain collectable).