Dealing With Your Car
A lot of people don’t realize how many different options filing Chapter 7 in Minnesota gives them when it comes to dealing with their car. While you can’t simply return your car to the creditor in order to get out of your car loan outside of bankruptcy, you can surrender your vehicle as part of your Minnesota bankruptcy case and have your responsibility on the loan discharged. Of course, if you are happy with your car, you can also keep it even after filing bankruptcy in Minnesota. In order to do so, you will have to either agree to continue making payments according to the terms of your loan or redeem the car by paying only the value of the vehicle to the creditor and discharging the remaining balance. Keeping everything the same does require you to complete a reaffirmation agreement which has the effect of removing your car loan from the pool of debts that is getting discharged. Since that means you will be personally responsible for paying the loan in full, no matter what happens even after your Minnesota bankruptcy case has been filed and your discharge entered, you should only consider this option if you know you can make your car payment every month without issue. The second alternative, called a redemption, does require you to make a lump sum payment to the creditor, so it’s an option only if you are able to raise or borrow enough money after filing bankruptcy in Minnesota to make this payment.
Organize Your Financial Documents
Minnesota Bankruptcy Exemptions: Can I Keep My Home And File Bankruptcy
One of the best parts about Chapter 7 bankruptcy is the bankruptcy exemptions that will allow you to keep most, if not all, of your property. Bankruptcy exemptions exempt the equity you have in your property how much you own outright up to a certain amount. In some states, bankruptcy filers can choose between either the federal set of bankruptcy exemptions or the states exemptions some are more generous than others. Minnesota is one of those states where you can choose either/or, but you cant mix and match.
So, how does the Minnesota homestead exemption, for example, work in a Chapter 7 bankruptcy case? Lets say that, due to overwhelming credit card debt, John from Minneapolis decides that bankruptcy will be his best option. John understands that he needs to file for bankruptcy however, hes concerned that he may lose his home. Based on a recent appraisal, the home is worth $250,000 and John owns it free and clear. Luckily for John, Minnesotas generous $390,000 homestead exemption will allow him to file for bankruptcy, shed his credit card debt, and retain ownership of his home.
Keep in mind that if you have a mortgage, exempting home equity will not relieve the obligation to make payments after bankruptcy. In addition, a recent move may impact which states bankruptcy laws apply to your case.
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The Chapter 7 Bankruptcy Discharge
At the end of the bankruptcy process, all of your debts are wiped out by the court, except:
- debts that automatically survive bankruptcy, such as child support, most tax debts, and student loans, unless the court rules otherwise, and
- debts that the court has declared nondischargeable because the creditor objected .
Get On With Your Life
Youll undoubtedly be eager to get your life back on track after your bankruptcy filing we hope you can breathe easier and start to rebuild when your bankruptcy is done. Occasionally, things do pop up after the end of a bankruptcy case that you’ll need to deal with, from discovering new non-exempt property to dealing with a creditor that tries to collect a debt discharged in your bankruptcy. If questions come up after your case is over, know that you can get answers.
If youve been working with a lawyer during your bankruptcy case, you can ask for additional guidance. You can also find information about dealing with post-bankruptcy issues in How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time.
Counties in Minnesota
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Complete The Bankruptcy Forms
Completing the bankruptcy forms needed for a Chapter 7 bankruptcy in Minnesota is the first step in this process that someone can help you with. Until now, all of the task items require you to take the laboring oar in collecting your documents and taking the course. For this step, you will still need to answer all of the questions needed to complete your forms but having someone else, like a lawyer, actually complete the forms means you won’t have to read the lengthy instructions manual to make sure everything is done properly. If you are eligible to use Upsolve you will have to complete a questionnaire similar to the one any lawyer may use to provide the information, but Upsolve does the work of translating your answers into the appropriate sections of your bankruptcy forms. Remember, however, that filing bankruptcy in Minnesota constitutes a legal proceeding in federal court and ultimately you are the person that signs the forms under penalty of perjury. In other words, it is your responsibility to review everything carefully and make sure nothing was left out, either on purpose or by accident, as this can disqualify you from obtaining a discharge in your Minnesota bankruptcy case.
Hiring A Bankruptcy Lawyer In Minnesota
Most people find it worthwhile to get counsel. A bankruptcy attorney will help you:
- qualify for the chapter of your choice
- determine when it’s time to file
- help you keep the property you want
- make sure you don’t run afoul of fraud or other issues, and
- explain when you can stop paying the bills you’ll erase in your case.
You can expect creditors to call until you file. It’s usually best to ignore them because telling creditors about your bankruptcy can encourage them to take more drastic collection steps before losing the right to collect altogether. However, if you hire counsel and refer creditors to your lawyer, they’ll have to stop calling you.
Are you curious whether your case is simple enough to file yourself? Our quiz will help you identify potential complications while educating you about the bankruptcy process. You’ll find it here: Do I Need a Lawyer to File for Bankruptcy?
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What Happens To Your Property
If, after the creditors meeting, the trustee determines that you have some nonexempt property, you may be required to either surrender that property or provide the trustee with its equivalent value in cash. If the property isn’t worth very much or would be cumbersome for the trustee to sell, the trustee may “abandon” the property — which means that you get to keep it, even though it is nonexempt. To understand exactly how bankruptcy would effect your specific situation, take advantage of a free initial consultation.
Most property owned by Chapter 7 debtors is either exempt or is essentially worthless for purposes of raising money for the creditors. As a result, few debtors end up having to surrender any property, unless it is collateral for a secured debt .
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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What Happens To A Co
Short Answer: If someone cosigned a loan for you, he or she will still be on the hook if that loan is eliminated in bankruptcy and will have to pay the loan. If your cosigner is a relative, you can imagine the stress this might cause in your relationship. If you have a cosigner you want to protect, youll need to consider negotiating an alternative payment plan with your creditor or filing Chapter 13 bankruptcy.
Do you have more questions? Reach out to us at 309-8180 for afree review of your case.
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Will Bankruptcy Hurt My Credit
Yes and no. Filing bankruptcy is harmful to your credit score, but there are a couple of things to keep in mind.
First, if you are seriously evaluating a bankruptcy filing, your credit score might already be low due to missed or late payments, so bankruptcy can actually help in the rebuilding process.
Second, under bankruptcy law, after a period of years, you cannot be discriminated against in applications for credit because of the bankruptcy filing. Most people find it fairly easy to rebuild credit after bankruptcy. You might be surprised at how quickly your credit profile improves! It seems that many lenders are more concerned with whether someone has an income rather than whether they filed a bankruptcy.
Many of our clients receive credit offers just after filing bankruptcy. So you dont need to give up on any dreams of car, home, or boat ownership.
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Chapter 7 Bankruptcy In Minnesota
Many people worry that if they file under Chapter 7 that they will lose all their property. The fact is that most Chapter 7 cases file in Minnesota are no-asset Chapter 7 cases.
Debtors keep their property in a Chapter 7 case. The only property they might lose is property that they want to give up because they do not want to continue paying the secured debt payments, such as a mortgage or a car loan. As well as, a no-asset Chapter 7 bankruptcy case can be completed in about six months.
Keep in mind that if you owe income taxes, back child support, unpaid alimony, past-due mortgage payments, or past-due car payments, you might want to file under Chapter 13. Do you think filing Chapter 7 in Minnesota might be right for you? You can learn more about the Chapter 7 Bankruptcy Process, and take a Chapter 7 Means Test Calculator.
Do You Have Debts You Can’t Erase In Bankruptcy
Some debts, called “nondischargeable debts,” can’t be wiped out in bankruptcyand nondischargeable debt rules get confusing quickly.
Here are some examples.
- You can’t erase spousal or child support arrearages in bankruptcyyou’d remain responsible for them after the case.
- You can discharge tax debt older than three years if it meets other qualification requirements.
- DUI and fraud-related debts aren’t dischargeable if a creditor objects.
- Student loans are also nondischargeable, but if it would be unlikely you could ever pay them back because of undue hardship, it is possible to wipe out student loans in bankruptcy. However, you’d have to prove it by filing a type of lawsuit called an adversary proceeding, a complicated endeavor without legal help.
If you have any of these obligations, you’ll want to talk with a lawyer.
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What Should I Expect In The Next Few Months
Whether you are Filing Chapter 7 or Chapter 13 Bankruptcy in Minnesota, the next few months will be similar in procedure. You retain a MN Bankruptcy Lawyer by paying money toward the court filing fee. Once retained, you can direct all creditor calls to our law firm. In most instances this will ease the harassing phone calls. However, you are not protected from collection efforts until the case is filed.
We will prepare the bankruptcy petition when our firm receives all necessary information and we will work with you to review and sign your petition.
The Bankruptcy Court will send you a Notice of the Meeting of Creditors about 7-10 days after your case is filed. There is a lot of information contained in this notice please thoroughly read it. The notice will specify the date, time and location of the Meeting of Creditors . You must attend the Meeting of Creditors.
If you filed a Chapter 7, the next step is to complete the Debtor Education course and to wait 60 days until you receive your discharge notice. If you filed a Chapter 13, you will have to make monthly payments to the Chapter 13 office for the duration of your plan and then receive a discharge.
Is There A Minimum Amount Of Money That I Have To Owe To File Bankruptcy
Short Answer: 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.
But think about it carefully before you file bankruptcy over a relatively small amount of money. Filing bankruptcy is a serious decision, and should not be done unless you need to do it. If there is a way for you to avoid filing bankruptcy, we will discuss that with you when you consult with our firm
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Other Minnesota Bankruptcy Exemptions
- Employee benefits. Up to $75,000 of employee present or future payments under a stock, bonus, pension, profit-sharing, individual retirement account, Roth IRA, individual retirement annuity, simplified employee pension, or similar plan or contract on account of illness, disability, death, age, or length of service, plus any additional amount reasonably needed for the filer’s support .
- Personal property. Clothing, one watch, utensils, food, appliances, furniture, radio, and television up to $11,250 wedding rings up to $3,062.50 tools of your trade or business, farm implements, livestock, produce, or crops up to $12,500 farm machines up to $13,000 teachers’ books and equipment burial plot or church pew or seat. .
- Insurance benefits. Insurance proceeds from the death of a spouse or parent up to $50,000, plus an additional $12,500 for each dependent of the surviving spouse or child insurance proceeds from loss of or damage to exempt property personal injury or wrongful death recovery for injury to yourself or your relative insurance policy up to $10,000 .
- Assistance and benefits. 100% of public assistance benefits unemployment benefits ) worker’s compensation benefits ) veteran’s benefits .
- Wages. Up to 75% of your gross earnings, or 40 times the federal minimum hourly wage per week .
The Minnesota legislature adjusts amounts periodically. To stay up to date, check the website of the Minnesota Legislature.
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