I meet with many people every month who are struggling financially. Most of these people want to know if filing a Chapter 7 or Chapter 13 bankruptcy case is right for them. Some ask me “what would you do?” in their situation. The complete, thorough answer to this question requires me and my clients to look at their current situation carefully, and then analyze what the outcomes will be to them if they take no affirmative action to resolve their financial problems, what the outcomes will be if the clients decide to attempt an informal agreement with their creditors to pay back all or part of the debt owed without filing bankruptcy, and what the outcomes will be if they file a bankruptcy case - either Chapter 7 or a Chapter 13 case.

Wondering if I can explain to you what a Chapter 7 and Chapter 13 Bankruptcy is so that you can understand it in English? Of course, I can! After all, I am the managing partner at Kain & Scott, Eagan, Minnesota’s oldest bankruptcy law firm - since 1972. Let's start by taking a closer look at the basics of how a Chapter 7 and Chapter 13 bankruptcy actually work.

Operating as a Sole Proprietor can be exciting and stressful at the same time. One of the biggest reasons it can be stressful is because you are personally liable for what happens. Unlike having an LLC, corporation, or partnership, you are personally on the hook for anything that happens. When debts become due, creditors can come after you directly to collect.

In my last two blogs, I looked at debts that aren’t discharged in a bankruptcy case. Two weeks ago I looked at debts that are never discharged - student loans, most income tax debt, obligations to pay child support or spousal maintenance, to name a few. These debts are presumed to be non-dischargeable in a bankruptcy case. That means that the creditor does not have to bring an action in bankruptcy court to determine that these kinds of debts are not subject to a bankruptcy debtor’s general discharge; if there is going to be a judicial determination of dischargeability, the bankruptcy debtor has to bring the action to determine whether the debt can be discharged in the bankruptcy case, and the presumption is that the debt is not subject to discharge.

I seldom like to write about ourselves. I guess it’s my Minnesota upbringing that makes me shy away from tooting our own horn for any reason. But, then it dawns on me, we have to tell our story so our Minnesota guests can understand who we are and why it’s important to those of you reading this blog. If you are considering filing a bankruptcy in the state of Minnesota, this blog is important to you- keep reading!

Finding and meeting a Bankruptcy Lawyer to help you get your life back is very important. This is an emotional time for you and you need someone who understands what you are going through. With this in mind, let me tell you who Kain & Scott is.

Last week, I wrote about 8 debts that a bankruptcy debtor may have that are not discharged, even if the bankruptcy client receives a “general” discharge. The kind of debts I wrote about - child support, most taxes, student loans, to name a few - are debts that are never discharged in a bankruptcy case.

People who file a bankruptcy with the types of debts that are never discharged must bring a lawsuit against the creditor in bankruptcy court if they feel, for some reason, that the debt in question should be discharged, despite its characterization. It’s up to the debtor to do this; if the debtor does nothing to contest the non-dischargeability of the debt, the bankruptcy debtor remains liable for the debt after discharge.

We have been practicing Bankruptcy Law at Kain & Scott since 1972. Our Lawyers have helped thousands of Minnesotans get their lives back and not a single one of these cases was identical to another. Everyone’s case is different because everyone is different. However, we have seen nearly everything under the sun and yet, the reasons why Minnesotan’s file bankruptcy can be reduced to 5 general categories.

I can assure you I have never had a single Minnesotan call me and say Wes, I really incurred all of this debt knowing I would file bankruptcy in the end. Or, you know Wes, I spent 12 months in Europe, with my friends, using my plastic on all of our expenses, knowing when I got back to Minnesota I would file bankruptcy. So, why do Minnesotans file for bankruptcy? Here we go!

Life should not hurt this much. You have decided that bankruptcy is the medicine your family needs to get your life back and look toward the future not keeping staring at the past. You should be proud of your courage and your need for certainty and security in life. It’s nice to know that when you start fresh you can pay your bills and keep the roof over your head. But still, you struggle with which bankruptcy makes most sense.

This is an age old question. You have a lot of debt or maybe you have a modest amount of debt and the creditors are like chihuahuas that just will not leave you alone. Every month is a constant battle- juggling the payment to creditors with paying your bills.

Many of our guests wonder is they qualify for chapter 7 bankruptcy. Sometimes, it can feel like you are not a candidate for bankruptcy when you really are a good candidate for bankruptcy. How do you know if you should be considering chapter 7 bankruptcy? How do you know you even qualify to file a chapter 7 bankruptcy?

I know this seems like a smart ass answer, but if you are thinking about it, you probably qualify to file.

The purpose of filing a Chapter 7 or Chapter 13 bankruptcy case is, plain and simple, to discharge debt - to make debt that has overwhelmed a debtor and his family “go away.” In order to receive a discharge, the bankruptcy debtor must comply with the provisions of the bankruptcy code. So legally proper papers must be filed with the bankruptcy court, all assets and liabilities identified and relevant financial transactions disclosed. The bankruptcy debtor has to attend a meeting with the case trustee, and must cooperate with the trustee and follow court orders to receive a general discharge.