You don’t make payments back to your creditors in a Chapter 7 Bankruptcy. This is the opposite of a Chapter 13 Bankruptcy where you make regular monthly payments back to your creditors through a Chapter 13 Bankruptcy trustee.

You have heard this before right? A Chapter 7 Bankruptcy is sometimes referred to as a “Fresh Start” bankruptcy? But what does this mean? It means this- it means that in a Chapter 7 Bankruptcy, you do not make payments back to your creditors. At the end of about a 4 month process your liability on your debts is wiped out (discharged), forever, tax free! Now, that sure seems like a “Fresh Start” to me, how about you?

Not sure why, but when I think of the word “discharged” I think you have been discharged from duty in the military sense. Obviously, that is not what discharge means in the Chapter 7 Bankruptcy sense. When we say you have been “discharged” in the Chapter 7 Bankruptcy sense, we are referring to what happens with respect your personal liability on your debts. A discharge is granted under Section 727 of the Bankruptcy Code.

The language of bankruptcy attorneys can seem like Greek to the non-attorney. What does it mean for a Chapter 7 trustee to “liquidate” assets? When would the trustee do such a thing anyway? When we say, a Chapter 7 trustee will “liquidate” assets, we mean the Chapter 7 trustee will sell the assets and reduce the physical assets to money. You can’t take physical assets and distribute those assets to creditors. Instead, you sell the assets, reduce the assets to money, and disburse those proceeds to creditors pro rata and based on a set of priorities.

So you are reading up on Chapter 7 Bankruptcies and you come across the term “no-asset case” and you wonder what that means. The vast majority of Chapter 7 cases filed in the United States are what we lawyers refer to as “no-asset cases”.

This is a great question to ask. Normally, debts that are forgiven are taxable income to you. For example, if you had 100k in debt and your creditors all said- forget about it and wiped it out that is fantastic, except, you now will have to pay taxes on the 100k. Why? Anytime an entity writes off a loss on their taxes it is income to someone else. Make sense?  Now, let’s be clear, paying taxes on 100k is better than paying 100k. If your tax bill is 35k you just saved 65k.

I am a proponent of erring on the side of filing bankruptcy. Why? Because hitting the reset button is good for you mentally and physically. Who among us wants to live with overwhelming debt that results in stress and worry that sometimes doesn’t end for years? Not me. I have high anxiety. I don’t necessarily mind problems, but I cannot have no solutions. I also don’t want solutions that delay getting relief. For, me delayed relief from a problem, is no relief.

If you live and work around Woodbury, Minnesota, and you are contemplating filing a Chapter 7 Bankruptcy, there are some things you should know. Sometimes things are not how they appear at first sight. Have you ever had the experience of thinking in your mind something was going to be really scary and then you did it, and found out it wasn’t as scary as you thought. Heck- you might have even enjoyed yourself a little!?

I am starting to see a disturbing trend occur in the legal field. Some law firms seem to think they can hire non lawyers to do lawyer’s jobs. Thing is- we lawyers are licensed to give legal advice to clients, non-lawyers are not.

The idea of bankruptcy for most is a scary proposition. But once you find out how it works, it softens the blow. For me, bankruptcy is a business tool, as Trump would say, to solve a business problem. That is, bankruptcy is a tool, to solve an overwhelming debt problem. Okay, well how does it solve the overwhelming debt problem?

It is sad for me to watch as some law firms protect their bottom line over the interest of the clients. If you think this doesn’t happen in Minnesota, think again. There is one firm, that rhymes with locker, that has five lawyers and five paralegals. Now, this firm advertises for Minnesota guests to come in to see them for a free “bankruptcy analysis”.

I have a cynical personality. I don’t trust easily and I want proof of statements made. Sound like you too? I think many of us are a bit cynical. Now, you shouldn’t be like my grandpa who was so cynical that he didn’t trust anyone. But a healthy dose of cynicism in the market place is ok! When you are looking for an awesome bankruptcy lawyer is Minnesota, look no further than Kain & Scott. Why? Here is the proof!

What is a Chapter 13 Bankruptcy? How does it work? How does it look on my credit? These are all wonderful questions with straight forward answers. Here are some Chapter 13 facts you will find useful.

From the oldest bankruptcy law firm in Minnesota, since 1972, comes Kain & Scott to explain what you need to know about filing Chapter 13 Bankruptcy. Very few people realize the government actually has a government sponsored debt consolidation plan. It’s called a Chapter 13 Bankruptcy. And if you knew how it works, no one would do traditional debt consolidation.

Here is what you need to know about filing a Chapter 13 Bankruptcy:

Have you ever had a bad thing happen to you? Of course right? Have you ever had a bad thing happen to you twice? Of course right? Bad things happen to good people. Businesses fail, incomes drop, medical problems happen, relationships break up, we all make bad financial decisions, so what right?

Sometimes, life deals you a blow and you may need to file another bankruptcy.  You can file another Chapter 7 Bankruptcy 8 years after you filed your previous Chapter 7 Bankruptcy. Section 727 of the Bankruptcy Code limits you to filing Chapter 7 Bankruptcy every 8 years. It used to be every 6 years until the Republicans changed the law in 2005.

In a world full of confusion, wouldn’t it be nice just to have some straight forward facts about Chapter 7 Bankruptcy? I think so too. So, what follows are facts about Chapter 7 Bankruptcy.

First, Chapter 7 Bankruptcy is on your credit report for 10 years- period. Second, Chapter 7 Bankruptcy improves your credit profile. Why? Because you have no debt! Think about it- if you are a bank would you lend someone money who is in debt say 100k in credit card debt? Hardly. Now, would you lend the same person money if they had no debt? Why not!? They have no debt!