Minneapolis Bankruptcy Law Blog

Understanding lien stripping

If you are thinking about filing bankruptcy in Minnesota due to your overwhelming debts, you likely have many questions about which kind of bankruptcy is right for you: Chapter 7, Chapter 13 or one of the other bankruptcy types. While all have their respective advantages and disadvantages, Chapter 13 has a special feature that may be just what you are looking for.

If you have two mortgages on your home, Chapter 13 offers you the opportunity to strip the lien against your house that your second mortgage holder holds. Bear in mind that whereas virtually all of your consumer debts, including credit card debts, get discharged in a Chapter 7, a Chapter 13 works differently. Here you have the opportunity to reorganize your debts and get three to five years to pay most of them off.

The 341 meeting is an important step in a bankruptcy journey

If you have decided to resolve your debt problems by filing for bankruptcy, you have taken a positive step toward a brighter financial future. One of the stops along the way to debt discharge will be the 341 meeting.

The meaning of 341

More seniors turning to bankruptcy for financial relief

Conventional wisdom holds that once you reach your senior years, your hard-earned retirement and savings will kick in to provide for you. However, nowadays, the reality is that more and more seniors are filing for bankruptcy.

Left with little to no savings and a meager income from retirement or Social Security, many senior citizens are simply unable to manage financially in the face of overwhelming debt. If you fall into this category and are feeling helpless and unable to meet your debt commitments and monthly bills, you should know that bankruptcy may be a viable option.

Understanding the Fair Debt Collection Practices Act

If your consumer debt has gotten out of hand in Minnesota, it may seem as though you “owe everybody,” and “everybody” is constantly harassing you by phone to collect their debts. Actually, this is not true. The Fair Debt Collection Practices Act prevents third-party creditors from harassing you.

A third-party creditor is not someone to whom you owe money. Rather, it is someone like a collection agency that collects debts for the people or companies to which you owe money. For instance, if you are substantially behind on your credit card payments, collection agencies may buy those debts, usually at a discount, and then proceed to try to collect them from you themselves.

3 benefits of bankruptcy for your business

Plenty of companies have been in the news in recent years because they have filed for bankruptcy. Blockbuster, Claire's and Sears are just a few of the major businesses that have found themselves seeking debt relief in the face of a changing economy. Retailers are not the only businesses that need debt relief, though—perhaps you own a business, retail or not, and are wondering how to handle mounting debts.

There are a number of ways to address this problem, but you should not rule out Chapter 13 bankruptcy. This option offers several benefits to business owners seeking to retain their company and continue operations while working on repaying debts that have accumulated.

Can you qualify for bankruptcy if your wages are being garnished?

In many cases, yes, you will qualify for bankruptcy protection if your wages are being garnished. At the very least, an automatic stay while the bankruptcy petition is pending should protect your wages. Do note, though, that these stays may not apply if the garnishment is for past-due child support or tax obligations. Stays should apply in cases such as a creditor trying to collect on medical bills or credit card bills. It is important to move as quickly as possible.

However, what happens if the court denies your petition, and the wage garnishment continues? Up to 25 percent of your income is gone, and no matter what the bankruptcy court thinks, it is income you cannot afford to lose.

3 bankruptcy exemptions you should know about

Filing for bankruptcy can be a daunting situation, but the more you know, the less scary it typically becomes. One of the biggest sources of stress is the common misconception that bankruptcy will force you to liquidate your assets. On the contrary, there are several options that allow bankruptcy candidates to file and retain most — if not all — of their most valuable assets.

Bankruptcy exemptions deem certain property and assets immune to liquidation when one files, and the details of exemption laws vary from state to state. For individuals considering Chapter 7 or Chapter 13 in Minnesota, the following three exemptions may be available when you file.

What sole proprietors need to know about filing for bankruptcy

When you are a sole proprietor, it is often a good idea to keep your business and personal assets as separate as possible. For example, you may have different bank accounts for business funds and personal funds. You might even have a car that you drive only for business reasons and another that you reserve for personal use.

However, if you file for bankruptcy, your business and personal assets will likely receive the same treatment. In other words, if it is business debt that is driving you toward bankruptcy, your personal assets could be at risk in addition to the business assets. Conversely, if you are struggling with personal debt, both your business assets and your personal assets are at risk.

Limits of debt collection

Many people in Minnesota struggle with debt. In fact, in 2015, the state ranked fifth in the nation for highest student loan debt.

People with debt are familiar with the practice of debt collectors contacting them incessantly to receive payments. It can be stressful, but there are legal limits to what debt collectors can do. Anyone who deals with these collectors should understand the law so that they know when an agency crosses the line. 

Key facts about bankruptcy exemptions

Financial hardships can be difficult to handle. To aid in the process, some people choose to undergo bankruptcy for a new start.

One of the critical aspects of bankruptcy is exemptions. Just because you need assistance with eliminating debt does not mean you should have to give up everything you own. Bankruptcy laws have provisions allowing for people to keep certain items, which may be exempted out of the bankruptcy estate. There are a few key facts to understand about them.

Prescott Pearson & Tande, PA
443 Old Highway 8 Northwest, Suite 208
New Brighton, MN 55112

Toll Free: 888-366-0827
Phone: 651-968-8096
Fax: 651-633-7562
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