When you file bankruptcy you have to list all of your assets, including those you may not have yet. For example, even if you have not filed your taxes or haven’t received the refunds yet, you still have to list the tax refund as an asset in your case. When you list your tax refunds, you will list it as a pro rata estimate based on the date of filing. As an example, if your case is filed on December 12, the share of the tax refund belonging to you on the date of filing is about 95%. 

As a society, we have come a long way in attempting to stamp out discrimination. While we are not perfect, there have been tremendous strides forward from where we once were. But, one class in particular remains fodder for criticism, even by their own, the poor. The classification itself seems like an insult. Of course, no one wants to be poor, but somehow there seems to be more shame attached because this classification is often thought of as self-inflicted.

One of the most common forms of bankruptcy that people often pursue is referred to as a “Chapter 13”.  Fundamentally, a Chapter 13 bankruptcy is a three to five year plan wherein you make payments to someone known as the bankruptcy trustee (the federally appointed official responsible for overseeing your bankruptcy).  The idea is that these payments will typically pay down a portion of what you owe, and then at the end of your chapter 13 plan you will receive a bankruptcy discharge which will eliminate any remaining obligation that you have towards the debts being resolved through the bankruptcy.

While there are a few different types of bankruptcy cases, our firm only files chapter 7s and chapter 13s. A chapter 13 bankruptcy case is a restructuring/payment plan, with the discharge being granted at the end. The payments cannot be less than 36 months or more than 60 months. 

In the vast majority of bankruptcy cases, debtors have no problem disclosing all of their assets to a bankruptcy trustee. Occasionally, we hear concerns about the possibility of “losing” an asset to a bankruptcy trustee which sometimes prompts the question: do I have to disclose this asset? Bankruptcy schedules are signed under penalty of perjury affirming that all of your assets are disclosed on the schedules. No, you may not pick and choose which assets to disclose. You must disclose all assets, wherever they exist, in the world. 

If you have a threat of wage garnishment or are currently being garnished, you may be thinking of turning to bankruptcy to stop the garnishment. The bankruptcy automatic stay goes into effect the day your case is filed. The automatic stay is what tell your creditors they cannot collect or enforce debt collection efforts, including garnishments. 

Bankruptcy can offer financial relief in a variety of different ways, and related to this, there are a number of different chapters of bankruptcy that you can file under which will offer different benefits with regard to your financial circumstances.  Regardless of which chapter of bankruptcy that you file, you will always attend something called a “First Meeting of Creditors” which is also commonly referred to as a “341 hearing”.  Upon hearing the term, you might naturally wonder what this meeting entails, as well as who will be in attendance and what format the meeting will occur in.  This blog will explore these topics and serve as a brief guide to navigating the process of preparing for and attending a first meeting of creditors.

The median income for your household size is used in a bankruptcy case to determine which chapter of bankruptcy you qualify for, either a 7 or a 13 and whether you are a three or five year bankruptcy plan. Each state has set amounts for the median income, dependent on household size.

The trustee is another attorney who is assigned to your case by the US Trustee to represent the bankruptcy estate. The trustee is the person who administers your estate and distributes any funds that come in during your case. They also make sure what you said in your bankruptcy case is truthful and correct and verify the information you provided. You will meet with the bankruptcy trustee at the 341 hearing, usually about 4 to 6 weeks after your case is filed.

There have been some recent changes to the Minnesota Bankruptcy exemptions, which have greatly benefited debtors.

When you decide you want to file a bankruptcy case you can either file with an attorney or file pro se, unrepresented. 

When contemplating the possibility of bankruptcy, many often wonder how this process begins and what the necessary steps to move forward with it might be.  Curiosity on this point is very understandable, as bankruptcy can be a completely new experience, and we naturally want to know more about how a journey begins before we embark on it.  This blog will provide context on the opening phases of the bankruptcy process, and will guide you through the steps necessary to begin them.

When a bankruptcy case is filed, you list all of your assets, whether you have them now or are just entitled to them at the time of filing. You will list assets from real estate you own, all the way to potential claims or causes of actions and everything in between. It is important when you file bankruptcy that your assets are valued properly. You do not want to under value the assets you have, but you also do not want to over value them. 

One of the first things that many people consider when contemplating a bankruptcy is the effect the filing will have on any vehicles that may be co-owned by their children, or registered in the parent’s name on the child’s behalf.  There are many reasons that we might find ourselves co-signing on a vehicle for our children.  Often, a child may still be a minor when a vehicle is purchased preventing them from registering it in their own name on the title.  Conversely, a parent may also co-sign on a vehicle for one of their adult children for the purpose of assisting with the financing process. Regardless of the reason however, the ultimate result is that the parent will be included on the title to the vehicle, and if applicable, will be co-signed on any loans taken out to finance it.

Receiving a notice or a demand from a debt collector can be jarring.  You might wonder who they are, or why they are contacting you.  In many circumstances it can be difficult to tell why they are reaching out or even who they might be collecting on behalf of, especially if the debt they are be pursuing is old or traces from a closed account.  The good news in this circumstances is twofold.  First, that you always have the right to demand that a debt collector verify what debt they are trying to collect on, and second, that in most circumstances, bankruptcy can be a tool to help you deal with their ongoing efforts to collect from you!  

Filing bankruptcy is not an easy decision and often leaves clients with a complex mix of feelings. No matter how you feel, you are not alone. Every day, we have clients sharing with us their stories and how bankruptcy makes them feel, and every day one of the most common things we hear is relief. But relief is definitely not the only thing we see. Here are some common emotional experiences associated with the bankruptcy process: