A Chapter 7 Bankruptcy is like smacking a re-set button on your life with debt. You hit the reset button and poof the debt is gone and your stress goes away. Tens of thousands of Americans each year smack that reset button and move on with their lives, you can too. The only regret you will have is not filing Chapter 7 Bankruptcy sooner. I am not joking.

A “preference payment” is when a debtor treats one or more creditors greater than all of the other creditors. The general idea behind a bankruptcy is that all creditors receive equal treatment, whether in a chapter 7 or chapter 13. Preference payments do not include paying your day-to-day bills and living expenses. The bankruptcy code denotes paying a creditor $600 or more in a 3-month period; however, it is very common that some bills and minimum payments will total $600 or more, such as a mortgage, car payment, credit card minimums, etc. The trustee is looking for disclosure of those payments in your petition and schedules and will likely inquire if you paid above the minimum required payments; getting more than what the regular payment normally is. Disclosure of these payments is required and honesty with your attorney is imperative.

I hate seeing this happen, I really do. If you receive a discharge in Chapter 7 Bankruptcy it is possible to lose the discharge. If you have not received your Chapter 7 discharge yet, it is possible to be denied it. What is the most common reason for losing or being denied a Chapter 7 discharge? Lying on the bankruptcy schedules or lying about your financial affairs under oath.

A fraudulent transfer occurs when an individual knowingly transfers property or ownership in property, in an attempt to reduce their assets and the amount of money a creditor can recover. It can also occur when property or assets are sold for less than fair market value. It is aptly termed because in the eyes of the bankruptcy code, transferring your property to someone else with the intent of keeping it from your creditors, is fraud. Not all transfers require intent to defraud your creditors though.

Once I have decided to file Chapter 7 Bankruptcy what on earth do I do? What is the first step I should take? Let me ask you a question—if you needed heart surgery would you call a foot doctor or heaven forbid do it yourself? Of course not. The very first thing you need to do is research local quality bankruptcy law firms. And be very careful of some law firms that claim to have a vast local presence when they do not. Now, when you are researching local MN bankruptcy law firms the one thing you must do is read a lot of Google Reviews. These Google Reviews are like gold whether they are positive or negative reviews.

Have you ever thought about this? Businesses file bankruptcy all the time. Some seek Chapter 11 Bankruptcy relief and some file Chapter 7 Bankruptcy relief. When these board members get together to discuss the corporation’s debts and assets they don’t invest a lot of emotional energy into the decision to file bankruptcy or not. Filing bankruptcy is either prudent for the corporation to do or not. It either makes good business sense or not.

  I have seen many unprofessional office spaces in my day. I have heard of clients meeting with Minnesota bankruptcy lawyers in many other very unprofessional spaces as well. But to get a feel for what these office spaces were like, I travelled to many of them myself. What did I find?

Debt consolidation is the process of taking out a new loan to pay off other liabilities and consumer debt, essentially extending the repayment terms. It does not erase the original debt, but transfers the consumer’s loans to a different lender or type of loan. Debt consolidation usually maximizes the likelihood of creditors collecting from a debtor. 

I like to think of a Chapter 13 Bankruptcy like a government sponsored debt consolidation program. In fact, if this is what a Chapter 13 Bankruptcy were called, far more Americans would turn to Chapter 13 Bankruptcy for relief as opposed to being stuck in an endless debt consolidation program through some company. The advantages of a Chapter 13 far outweigh any debt consolidation program out there.

In these unprecedented times, there is so much uncertainty in the world that many individuals with steady, good paying jobs, are hunkering down in survival mode for fear of what might happen next. That is a completely normal and healthy response to have in this situation, but if you need help with your finances, you should not let fear of the unknown stand in your way.

Debt is not just a financial problem. It is a physical and mental problem too. Overwhelming debt places an enormous stress on the mind and body that is not healthy for us. Kain & Scott has been around since 1972, we have seen a few things. And one of the things we have seen is the deterioration of health because of debt. Anxiety and depression are common among those people who suffer with overwhelming debt.

Some Minnesota Bankruptcy law firms invest little money in people and spaces and guess who suffers when they don’t? Yes, you do. You see an unhappy workforce results in unhappy clients. There is no other way around this. If an employer has unhappy employees guess what you are going to be? Unhappy! 

Assuming one meets the jurisdictional requirements to file Chapter 7 Bankruptcy, what are the basic requirements to qualify to file a Chapter 7 Bankruptcy? Good question. I have had people over the years who wanted to file a Chapter 7 Bankruptcy but could not. Why? Section 707(b) lays out the elements associated with what we call the “means test”. Basically, if your income is over the median income for your family size in your state, you must go through a “means test” which is a combination of real numbers and set numbers.

A law firm should honor the courage it takes for people to reach out for help in resolving a debt problem. Having a debt problem can be embarrassing for many Minnesotans. And instead of seeing Minnesotan’s courage to reach out honored by law firms I found the opposite was happening and it made me mad.

Sometimes, it is ok to hit the reset button in life and move on from an overwhelming problem.  I have never once had anyone regret the decision to dump debt and move on with their lives. The only regret that petered out eventually was the regret that they had not hit the reset button sooner. One of the biggest advantages of filing bankruptcy is not only the debt gone but it goes away tax free. Think about that for a moment. If you owed me 100k and I said forget about it I am going to write off on my taxes as a loss. Well, since I am going to write it off as a loss it has to be income to you.

 Everyone has the right to be heard. No bias, no judgment, just quiet resignation to being heard by someone who really cares. At Kain & Scott we listen a lot. This is a painful journey for most of our clients and we would be remiss if we didn’t sit back and listen to our guests as they tell their story of what happened to them and overwhelming debt.