Right before his son went off to the big city in Shakespeare’s Hamlet, Polonius told Laertes “Neither a borrower nor lender be/For loan oft loses both itself and friend.” In other words, be careful about borrowing and lending money to friends. If you lend, they won’t pay it back; if you borrow, you’ll fall out of favor. But loaning and borrowing is not bad. In fact, sometimes both are very good.

His advice is still valid in today’s Minneapolis. People haven’t really changed much since the sixteenth century. So, mixing money and friendship still ends badly most of the time. But sometimes, you need to borrow money. In fact, over two-thirds of the nation’s $13.2 trillion in household debt is mortgage debt. Most of the time, mortgage debt is “good debt.”

Kain & Scott has been helping Minnesotans get their life back since 1972! We have seen and heard just about everything you can imagine when it relates to debt, how people feel about it and how it affects peoples’ mental and physical health. The apprehension people feel about filing bankruptcy is real. And yet, the vast majority never regret filing bankruptcy.

Bankruptcy is quite unlike other civil cases in Minnesota. In a divorce or commercial dispute, the judge controls almost everything that goes on in the case. But in a bankruptcy, the debtor may not ever even see the judge. In fact, it’s not uncommon for the debtor never to even go in a courtroom.

Instead, the trustee has day-to-day responsibilities in terms of case management. These responsibilities vary significantly between a Chapter 7 and a Chapter 13. However, the trustee’s overall role in a Minnesota bankruptcy remains the same. The trustee, who is not a judge and may not even be a lawyer, must do what is in the best interests of the creditors. The trustee is not on your side. That’s your lawyer’s job.

Out of all of the questions we get asked, this is by far and away the single biggest question we get at Kain & Scott. Everyone, and rightly so, wants to know if I file bankruptcy how will this impact my ability to get future credit. And what you think happens, does not. If you live in Woodbury, Minnesota, or anywhere else in Minnesota, read on.

Many of our guests simply know they need to file bankruptcy. What they don’t always know is who should they hire to help them get their lives back. Recently, we put together a 15 minute video to help with answering the question of who should you hire to help you get your life back. 15 minutes could save you a lot of headache and money! You will soon see the video on our website at www.kainscott.com.

Have you ever listened to the supposed “gurus” on debt who tell you to avoid filing bankruptcy? Why do you suppose they tell you to avoid filing bankruptcy? Perhaps it is because the so called “guru” is making money on you not filing bankruptcy. That is right, how many programs are being sold or seminars held telling you to avoid filing bankruptcy but then proffering some lame program to keep you mired in debt for years? Some of these “gurus” have even filed bankruptcy themselves!

Kain & Scott is St Cloud, Minnesota’s highest google reviewed Bankruptcy Law Firm, St Cloud, Minnesota’s largest bankruptcy ONLY law firm, St Cloud, Minnesota's oldest Bankruptcy Law Firm and St Cloud, Minnesot'a only Bankruptcy Law Firm to help Minnesotan's get debt free and repair their credit using our exclusive FREE 90 Day Credit Repair Program. Exciting? We think so!

The 2005 bankruptcy reform act significantly changed parts of the pre-filing process. Supposedly, banks approached then-President George W. Bush about such a measure shortly after he took office in 2001. But because of the proposal’s harshness, he said he would not sign it until his second term. The 2005 law made a number of changes which were designed to make it harder to file Chapter 7. These changes are outlined below.

Other parts of the pre-filing process are unchanged. That include the initial consultation with your Minnesota bankruptcy attorney. At Kain & Scott, we believe in very thorough consultations which review all your bankruptcy and non-bankruptcy debt relief options. An extensive consultation also helps clients understand what happens when they file bankruptcy. That is a tremendous advantage for everyone.

Most Minnesota families live hand to mouth. Almost half of the households in America cannot cover a $400 emergency expense. Most secured debt payments, like rent, mortgage, or auto loans, are three or four times that amount. In other words, just one missed installment can mean a world of hurt. Most people lack the means to make catchup payments.

Most moneylenders begin adverse action, including the dreaded acceleration notice, after just two or three missed payments. An acceleration notice demands the entire loan balance immediately; the lender will no longer accept partial payments. In situations like this, a federally-guaranteed debt repayment plan is probably your best option. Almost everything you need to know about a Chapter 13 bankruptcy is described below.

Many Minnesota families have excessive credit card debts. Making matters worse, according to one estimate, 60 percent of cardholders struggle just to make the minimum payment. So, every month, the family goes deeper into debt. This downward debt spiral quickly becomes overwhelming.

Many “debt consolidation” firms only make empty promises. But there is a federal debt relief program that’s designed to do away with excess debt and give Minnesota families a chance to start over. But bankruptcy is a very big decision. Before you file your voluntary petition, it’s important to know everything about Chapter 7 bankruptcy.

Most likely, bankruptcy would affect a business partner. However, the effects are almost all positive.

Sometimes, liquidating a failing business is the best course of action. This issue is very common, as only a small percentage of new businesses survive past the first five years. A failed business does not necessarily mean that you and your partners are poor planners or businesspeople. It just means that, for whatever reason, a particular concept did not work out.

In my last two blogs, I’ve written about some unexpected consequences that some of our clients experience as a result of filing a bankruptcy case.  These surprises come from different areas - from the fact that ACH payments can be discontinued to the fact that a lapsed car insurance policy can result in a safe driver being dropped into the risk pool when a new auto-owners policy is taken out.  This week I’ll continue to write about expecting the unexpected as a result of filing a bankruptcy case.

Absolutely not. Financial problems are so common that they touch almost everyone. Many people live paycheck-to-paycheck. So even a slight income disruption or a small unexpected expense is often devastating. One in four Minnesotans worry about money so much that they have PTSD-like symptoms. That figure is self-reported, so the actual number may be even higher.

In other words, if financial problems could affect your job, many of us would be out of work. That’s simply not a workable environment, so bankruptcy discrimination is illegal.

Bankruptcy gives fresh starts to distressed debtors. But it uses the least restrictive means to accomplish this goal. Property rights are sacred to many people in America, and that includes a contract between a debtor and a creditor. So, bankruptcy does not interfere with that contract.

Instead, a bankruptcy discharge removes the debtor’s legal obligation to repay debt. It does not affect the collateral consequences. Assume a judge discharges past-due university tuition. The school cannot do anything to collect the amount owed. However, it can withhold the student’s transcript until the debt is paid or otherwise resolved. A bankruptcy judge does not have the authority to order the school to release the transcript.

Last week I started writing about the collateral events in a bankruptcy case that can confuse, concern or surprise bankruptcy debtors.  I looked specifically at the fact that many creditors will automatically discontinue ACH automatic withdrawals out of the bank accounts of bankruptcy debtors and that many creditors will disable a bankruptcy debtor’s ability to pay bills online (by the way, many pay-by-phone services are discontinued, also).

This week I will write about some other “surprises” that debtors can find in a bankruptcy case.

So, last we spoke, we spoke about Mary’s account being frozen. The creditor had frozen Mary’s 12k 401k loan proceeds and Mary had come in to see me about what her choices were to resolve her debt problem.