The MN Bankruptcy Process
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 (approximately 30 days after your case is filed). You must attend the Meeting of Creditors.
The Meeting of Creditors is a relatively painless hearing. One of our MN Bankruptcy Lawyers will be with you at the hearing. The hearing is neither in a courtroom nor in front of a judge. The Meeting of Creditors is held before a trustee and will last approximately 5-10 minutes. The trustee will ask questions about your assets, debts and background information. You need to bring a picture I.D. and verification of a social security number. In addition, you will need to bring your most recent pay stub and bank statements from all bank accounts, showing the balance on the date your case was filed. Failure to bring these items could cause the trustee to file a motion to dismiss your bankruptcy case.
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.
At What Point Will a Bankruptcy Begin to Assist a Debtor?
Usually, a bankruptcy will protect a debtor upon the filing date of a bankruptcy petition. A petition for bankruptcy is filed when a completed petition is presented along with the required filing fee to the Bankruptcy Court. When your bankruptcy petition is filed, the Bankruptcy Court mails a notice to your creditors to discontinue any type of collection efforts, including harassing phone calls, lawsuits, foreclosure and repossessions.
Will My Employer Be Notified If I File Bankruptcy?
Usually, an employer does not have any reason to be notified of a bankruptcy filing. The most common instance when an employer is notified of a bankruptcy filing would be to stop a pending garnishment upon a debtor’s paycheck.
What is a Meeting of Creditors?
The Meeting of Creditors allows your creditors the opportunity to ask questions. However, creditors rarely appear. During the Meeting of Creditors, the trustee asks questions about your personal information, assets and debts. These questions are similar to those asked during the consultation with one of our MN Bankruptcy Lawyers. The meeting usually lasts five to ten minutes.
What Types of Debts are Typically “Wiped-Out” In a Bankruptcy?
What debts can be “wiped-out”, or eliminated, in a bankruptcy discharge will vary based on which chapter you file, though there are many similarities. A Chapter 7 will wipe out debts quickly and completely. A Chapter 13 on the other hand allows you to repay some of your debt by prioritizing your debts and proposing a 3-5 year repayment plan. Upon completion, a bankruptcy discharge is granted and eliminates the remaining balances on your debt.
Chapter 7 dischargeable debts include credit card debts, medical bills, personal loans, utility bills, repossession deficiency balances, business debts, money owed under lease agreements, tax penalties and unpaid taxes past a certain number of years.
In a Chapter 13, your debts will be prioritized into three different categories. The first is priority claims, which must be paid in full. Second are secured debts, meaning debts secured by collateral. Finally, unsecured claims, such as credit card debt, must be paid up to the amount your creditors would receive if your assets were liquidated.
Typically, the types of debt to get discharged upon completion of your repayment plan are unsecured claims. The most common are credit card debts, medical bills, personal loans, utility bills, repossession deficiency balances, business debts, money owed under lease agreements, and tax penalties and unpaid taxes past a certain number of years.
What Debts Are Not Erased by Bankruptcy?
Some debts are non-dischargeable under bankruptcy law. The following debts are not erased in either Chapter 7 or Chapter 13 cases. If you file for Chapter 7, these will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If not paid in full, the balance will remain at the end of your case:
- Debts you forgot to list in your bankruptcy documents
- Child support and alimony
- Debts for personal injury or death caused by your intoxicated driving
- Student loans, unless it would be an undue hardship for you to repay
- Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution
- Debts you incurred on the basis of fraud, such as lying on a credit application
- Credit purchases of $1,150 or more of luxury goods or services made within sixty days of filing
- Debts from embezzlement, larceny or breach of trust
- Mutual debt incurred through a divorce decree
- Recent income tax debts and some other tax debts
What Assets Are Protected When I File?
Which assets are protected when you file for bankruptcy are different for each individual. However, generally speaking, a debtor will keep his or her home (if current with the mortgage), automobile (if current), life insurance, tools used in a trade, typical household goods and retirement accounts. Also, depending on the specific case, a debtor may be able to keep boats, guns, computers, recreational vehicles and, depending on their value, other “toys.” The only way to determine what assets you can keep is to meet with one of our qualified attorneys.
Does Filing Bankruptcy Have to be Done by Both Husband and Wife?
A husband or a wife can file, without the other if the situation warrants only one person to file. A typical situation is when either the wife or husband is the only person responsible for the debt. However, bankruptcy court requires both parties’ income and expenses in analyzing a debtor’s ability to qualify for Chapter 7 or Chapter 13. Also, if there is joint debt, the person who does not file still will be legally responsible for the entire debt.
CONTACT A MN BANKRUPTCY LAWYER
If you have any questions or would like to know more about Minnesota Bankruptcy, contact one of our numerous Minnesota locations near you today, we'd be happy to help.