Is There A Minimum Amount Of Money That I Have To Owe To File Bankruptcy
No. The U.S. Bankruptcy Code does not set out any minimum amount of money that you have to owe or be in debt, before filing for bankruptcy.
That being said, if you owe so littlethat you can easily afford to repay it, and the U.S. Trustee’s office or a creditor objected or filed a motion to dismiss your case, then yes, your case could possibly be dismissed for “abuse” of the bankruptcy laws.
But if you are unable to pay your debts, even though it is not a large amount of money owed, then there is no reason why you could not obtain a discharge or cancellation of your debts through bankruptcy, assuming that you otherwise qualify for it.
Can I Own Anything After Bankruptcy
Absolutely! This is just one of the many urban legends that surround bankruptcy. Many people believe they cannot own anything for a period of time after filing for bankruptcy. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance within 180 days after filing bankruptcy, that money or property may have to be given to your creditors if the property or money is not exempt.
Uniform Transfer To Minors Act Accounts
These are accounts set up under state law. The account is in the childs name and is held under the childs social security number. In your bankruptcy papers it would typically be listed under property held for another. The law requires, however, that an adult be named as the custodian of the account. The adult will manage the account until the child turns 18, then the money can be claimed by the child. How safe or unsafe the money in one of these accounts is depends on when the money was put in and by whom.
As a general rule, if the money in the account came from Grandma or some other third party, it should be safe. Because it never was your money. It would be best if you had records that can prove it never was your money. If you put the money in and now you want to file a bankruptcy, there could be a problem. Minnesota has a fraudulent conveyance statute that has a six year look back period. If that was money that you could have used to pay your debts but you put it in the childs account instead, the bankruptcy trustee might be able to claw it back out of that account.
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Will I Have To Go To Court When I File Bankruptcy
In most bankruptcy cases, you only have to go to a proceeding called themeeting of creditors, which is a short and simple meeting where you are asked a few questions by the bankruptcy trustee. While the meeting is held at the courthouse, the meeting doesnt take place in a courtroom.
Occasionally, if complications arise, you may have to appear at a hearing in front of a bankruptcy judge. In a Chapter 13 case, you may have to appear at a hearing when the judge decides whether your plan should be approved . If you need to go to court, you will receive notice of the court date and time from the court or your attorney who will help you prepare for your appearance.
Chapter 13 Bankruptcy Minnesota
Chapter 13 bankruptcy Minnesota is a payment plan bankruptcy where your debts are reorganized via the bankruptcy court, often in a 3 or 5-year payment plan. One of the most important questions is determining your monthly plan payment. Once you have a sense of your plan payment, you compare that payment to your current monthly obligations to see whether you may afford Chapter 13 bankruptcy. Debt settlement is often an alternative to a Chapter 13 bankruptcy. For a deep dive on Chapter 13 bankruptcy, you may want to check out the article titled Chapter 13 Minnesota
Can I File For Bankruptcy In Minnesota
To file for Chapter 7 bankruptcy in Minnesota, you will need to show that you lack the disposable income to repay your debts by passing one of two means tests.
The first means test simply requires that you show your household income is lower than that of the median Minnesota household of the same size. For example, U.S. Census data showed the median household income for three-person households in the state was $100,430 in November 2020. If you live in a three-person household and have less than $100,430 in household income, you qualify for Chapter 7 in Minnesota.
If your household income is too high, you still may be able to qualify for Chapter 7 if you can prove that you have little to no disposable income each month after you have paid your bills.
You only need a steady income that is high enough to support a repayment plan to file under Chapter 13. However, you cannot file under Chapter 13 if you have more than $419,275 in unsecured debt and more than $1.26 million in secured debt.
What Debts Cannot Be Discharged In Bankruptcy
The following debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy case. If you file Chapter 7, you will still owe these debts after your case is over. If you file Chapter 13, these debts will either be paid in full during your plan, or the balance will remain at the end of your case.
Nondischargeable debts include:
- Unlisted debts, unless the creditor had knowledge of your bankruptcy filing.
- Recent income tax debt and other tax debt.
- Fines imposed for violating the law.
- Student loans, unless you can show that it will cause a hardship for you to repay them.
- Debts you owe under a divorce decree or settlement.
In a Chapter 7 and 13 case, a creditor may object, and a judge may agree, to theseadditional debts being discharged:
- Debts incurred by embezzlement, fraud, or larceny.
- Certain credit purchases made within 90 days or cash advances made within 70 days of filing.
- Restitution or damages awarded in a civil action for willful or malicious injury to a person.
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Can I File Chapter 13 Bankruptcy Just To Stall Foreclosure
Short Answer: No, it is not a proper use of chapter 13 bankruptcy to file a case just to get the protection of the “automatic stay” without the intent to complete the case.
Some people file bankruptcies over and over to repeatedly stop foreclosures on their property. Not only is it wrong to do so, but it causes a lot of unnecessary legal expense to the mortgage companies that are foreclosing, and also a lot of unnecessary trouble and expense to the court system. The bankruptcy court can punish people or their attorneys through contempt of court or other means for filing multiple bankruptcies without the intent to make them work.
Why File For Chapter 11 Bankruptcy In Minnesota
A Chapter 11 bankruptcy in Minnesota gives the debtor the opportunity to reorganize a business to make debt obligations easier to comply with. The creditors become unable to enforce repayment outside the repayment plan, the debtor may pay the debts after the original due date, and the debts may even be reduced in some cases. A Chapter 11 bankruptcy allows a business that may become profitable in the future to avoid liquidation through reorganization. The debts are to be paid within three to five years.
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Our Minnesota State Exemptions Remain Far From Perfect
For a more complete rundown on how this all works, take a look at my exemptions page. These state exemptions leave a lot to be desired. They have a lot of gaps which seem to always allow the bankruptcy trustees to require my clients to buy back some of their stuff. Most jewelry is not exempt. Most electronics are not exempt. There is no exemption that covers tax refunds, and there are issues with money in bank accounts. I have ranted about this on this blog before. The legislature needs to fix it but they dont.
The Minnesota state exemptions are primarily good for one thing. They allow you to protect lots of equity in your homestead, unlike the federal exemptions which are very limited in that area. I dont think any of the increases here have kept up with the real rate of inflation so in fact we seem to be loosing ground.
If you dont properly claim any asset as exempt, you risk losing it to the trustee. Its tricky and risky and should not be attempted without a lawyer.
Minnesota Bankruptcy Exemptions And Law
Filing for bankruptcy is often seen as a last resort for those who are in true financial trouble. But the reality is that bankruptcy offers a means for those who are having trouble managing their debt to stop harassing phone calls and collection notices. The pause in collection activity will let you either reorganize your debt to make it more manageable or, if you have no hope of ever paying it off, eliminating it entirely.
Minnesota has put special bankruptcy rules in place that will help you protect your property from your creditors during bankruptcy.
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Mail Documents To Your Trustee
After you file your bankruptcy papers, the court will assign a Chapter 7 bankruptcy trustee to your case and schedule your meeting of creditors . Bankruptcy law requires that you send your trustee certain documents at least seven days before the 341 meeting. Even though many trustees send out a letter describing the documents you need to submit, itâs a good idea to contact your trustee right after you file to avoid problems.
A Minnesota trustee will likely ask you to provide:
Your paystubs from the 60 days before filing,
Two months of statements for all your bank accounts,
Copies of your two most recent tax returns,
Certificates of title, and other such ownership records.
Make sure that your bank statements cover the date you filed for bankruptcy. If the trustee asks you to provide other documents, you have to comply if itâs a reasonable request.
Chapter 7 Bankruptcy: Liquidation
Chapter 7 bankruptcy is a liquidation plan, which means no repayment plan is necessary, and the individuals debt is completely cleared after the bankruptcy proceedings are finalized. While this sounds like a great way to restart your life, there are several caveats. First, debtors must agree to liquidate their assets in order to pay off as much debt as possible. Whatever debt remains after that liquidation process is then written off and dismissed. To file chapter 7 bankruptcy, the debtor is required to have an income below the median in the state in which theyre filing. The filer must typically pass a means test to determine eligibility.
Not The Time For Creativity
Dont try to be creative. Because every dishonest scheme you can think of has already been thought of. No, you cant sell your boat to your brother for a dollar. And you cant have a friend hold some money for you. The bankruptcy trustees have the resources of the FBI available if they get suspicious. As a result, there isnt anything they cant find out.
Once the bankruptcy is filed, your right of privacy is pretty much gone with respect to any of the information required for the case and thats most everything there is to know about you. Even if there are not criminal charges, there are plenty of other sanctions. Your case could be dismissed without a discharge. The discharge could be denied for all or some of your debt. If you get a discharge, it could be revoked. And that asset you were trying to hide, whatever it is you probably are going to lose it.
Bankruptcy Problem Areas To Avoid
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What Are Minnesota Bankruptcy Records
Minnesota bankruptcy records are details of court cases handled by bankruptcy courts within the state. These details cover all information about the case, from the filing until the case is closed. Four courts handle bankruptcy cases in Minnesota:
Records of bankruptcy cases heard by these courts after 1999 are preserved electronically. Other bankruptcy lawsuits before 1999 are paper records. Per the National Archives and Records Administrations record disposition policy, most of the paper records in the bankruptcy courts, especially those filed after 1940, are destroyed after 15 years.
Interested parties can obtain available paper records by visiting the clerks office of the bankruptcy courts located in St Paul, Duluth, and Minneapolis. Fergus falls bankruptcy court is currently unstaffed. However, when paper records of bankruptcy cases have been destroyed, information like filing date, case name, and case number for such cases are still available at the clerks office. Electronic records of bankruptcy cases are accessible using the Public Access to Court Electronic Records . Interested individuals will have to pay a fee of 10 cents per page to access these court records.
Bankruptcy Does Not Get Rid Of Liens
Once the bankruptcy is finished the underlying debt should be gone but the lenders lien on your car and your home will remain. This means that if you want to keep the house or car, you still have to make the payments even though technically you dont owe the debt any more. All the creditors are going to be under a court order which will tell them to leave you alone. This includes the debts you want to get rid of and the debts you want to keep paying. The creditors will all stop billing you. They might shut down your on line access to your accounts as well.
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Take Credit Counseling Course
Itâs very important that you complete a within 180 days before you file your case. The course is commonly done online or by phone. The credit counseling provider must be approved in the state of Minnesota.
The fee for the course is usually under $50. If you can’t afford the course fee, you can apply for an income-based waiver when you sign up for the course. When you finish the course, youâll get a certificate of completion. You have to submit that certificate when you file your bankruptcy petition. If you donât, the court will dismiss your case.
Filing For Personal Bankruptcy In Minnesota
No ones bucket list includes filing for Chapter 7 bankruptcy in Minnesota. However, it may be the most responsible thing to do for you or your family. The economy these days may not be what it was when you started working. Things have changed. Businesses are financially floundering. Online sales and services are cutting into business profits. And here you are. The debts are piling up and you may soon have to choose between groceries and trying to pay off what you owe. The only solution may be bankruptcy. Believe us, it is more common than you might think.
We know that bankruptcy can seem like a pretty daunting process. It isnt that bad. In Minnesota, you can file the paperwork online and follow the steps required.
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Estimate Whether You Will Lose Any Property
As you can imagine, many people want to keep their home, car, cash, etc. when filing bankruptcy.
You need to understand the bankruptcy exemptions in Minnesota. The bankruptcy exemptions are complex because some states allow you to choose between state and federal exemptions when filing bankruptcy. For example, check out the Minnesota homestead exemption.
As such, we created this Minnesota bankruptcy exemptions calculator to simplify the information. This free calculator helps you estimate whether your belongings are at risk when filing bankruptcy in Minnesota.