Many people who live in or around Rochester, MN are considering bankruptcy right now. If you are considering bankruptcy, watch out for this one issue that trustee’s look for all the time. They watch to see if people who file bankruptcy pay family members money owed to them in advance of filing bankruptcy. What is the big deal, you say, if you pay your parents back 10k within a year prior to filing a Chapter 7 bankruptcy?  Well, it really isn’t a big deal to pay back your parents 10k. But this assumes you are not filing Chapter 7 Bankruptcy within a year of paying your mom and dad back.

When folks think about bankruptcy, they often think about a Chapter 7 Bankruptcy. A Chapter 7 Bankruptcy is often referred to as the “fresh start” bankruptcy. The idea is to eliminate your debt and start over fresh! Each year, thousands of Minnesotans hit the “reset” button we call Chapter 7 Bankruptcy and get their lives back. But, what really is a Chapter 7 Bankruptcy and how do I get started?

Meet Tony and Lisa. They were leading a middle class lifestyle for a long time. Tony was a 10^th grade history teacher and Lisa was an RN. They always made decent money and always were able to pay their bills on time. They would both admit they lived a great lifestyle. They lived in a 500k home, took trips often, and drove really expensive vehicles. Financially, life was really good.

Bankruptcy is an emotional and sensitive topic. When Minnesota professionals refer their guests to a Minnesota based law firm, they want the law firm to take extraordinary care of their clients they are referring. As a lawyer, I do not find it funny to refer a client of mine to a company only to find out the client was treated poorly by the company. In fact, at Kain & Scott, we ONLY refer our guests to companies and lawyers who promise to treat our guests well. If they fail to, they come off our list.

Minnesota professionals refer their clients, who are overwhelmed with debt, to Kain & Scott. Who are these professionals? Attorneys all across Minnesota trust Kain & Scott to treat their clients with kindness, helpfulness, professionalism, and exceptional customer service. Attorneys who refer their clients to Kain & Scott know that they are referring their clients to Minnesota’s HIGHEST GOOGLE reviewed bankruptcy law firm and their clients will be treated exceptionally well. Don’t trust my word for it, trust the hundreds and hundreds of 5 star reviews describing their experience with Kain & Scott.

Unfortunately for Minnesotans already suffering with overwhelming debt, there are now companies suggesting that filing bankruptcy yourself is a great idea. Take it from Minnesota’s OLDEST bankruptcy law firm, who has seen the aftermath of Minnesotan’s trying to file bankruptcy themselves, not only is it not a good idea at all, but it is not free when you make mistakes and end costing yourself far more money than if you would have hired a lawyer to begin with. Don’t fall for the bait. Who wins if you mess up on your bankruptcy schedules? Creditors win—you lose.

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.

We all do it. We make financial mistakes and over extend ourselves. If you live in Minnesota and you are knee deep in debt, start 2024 out right and file Chapter 7 Bankruptcy. Nothing allows you to move beyond debt quicker than filing Chapter 7 Bankruptcy and getting your life back now. As the holidays pass us by, we know the debt that is left over. Our hearts are always in the right place but our pocket book doesn’t seem to keep up with our heart.

We are seeing organizations proliferate that encourage Minnesotans to file bankruptcy themselves. I am sure the people that run these organizations mean well. However, they are leading people down a path that puts their future in jeopardy. Creditors hope people file bankruptcy themselves. Why? Because you are bound to make serious mistakes that will cost you money which means a gain for creditors.

A necessary step of the bankruptcy process is what is called a 341 Meeting. Your attorney may also refer to it as a meeting of creditors. What is the purpose of this meeting? Why is it important? What happens during this meeting? These are all great questions with very straightforward answers!

This is a big worry for most of our clients. And why wouldn’t it be? Your credit can determine a lot of things: credit card or loan approval, interest rates, eligibility for housing or vehicle loans, and more! It’s only right that one would be nervous about their credit after filing a bankruptcy. So let’s go over what will happen to your credit throughout the bankruptcy process.

While the outcome of Chapter 13 bankruptcy and Chapter 7 bankruptcy is ultimately the same: discharge of your debts, the journey to discharge is different between the two chapters. A Chapter 7, from start to finish is between 3-6 months. A Chapter 3 is 3-5 years. This is a big difference. So, how does your Kain & Scott attorney help to determine which chapter of bankruptcy you are eligible to file for?

I start with one universal truth: Every single person I have ever met wants to pay their bills and do so on time. Want another universal truth? We are all human and our brains are imperfect and we WILL do imperfect things. Like what? Like start businesses that fail, start relationships that end, suffer mental and physical health problems, lose income, and yes, make bad financial decisions. If you know of anyone who says they have not made bad financial decisions, you may feel free to call them a liar, because they are lying. So, now that we have these two universal truths out of the way, once debt has been incurred how do you go about solving the debt problem for good?

It is never easy to know if you have made the right choice. This goes for nearly every decision we make, whether is it choosing the right home or car to buy, deciding when or where to start a family, saying ‘yes’ to a new job, or saying ‘no’ to your kids! 

One would think that a bankruptcy filing is a bankruptcy filing no matter the attorney or firm who files it, right? So why would one choose one bankruptcy firm or bankruptcy attorney over another? Why would a potential bankruptcy filer choose Kain & Scott over the competition?

Filing for bankruptcy is a difficult decision. A decision that no one should take for granted or take lightly. When deciding whether or not to file a great question to explore is this: is filing for bankruptcy worth it for me? Taking into account all of your debts, incomes, expenses, and assets, is bankruptcy the best route for me. What are the pros and cons of filing? What is gained and what, if anything, is lost during the bankruptcy process? Most of these questions are best discussed with an experienced bankruptcy attorney in a consultation. But how does one decide to take that initial step and schedule an appointment? Here are some questions to ask yourself: