Minneapolis Bankruptcy Law Blog

The alarming rise in gray bankruptcy

Minnesota seniors have not been immune to the rising costs of health care and the financial hardships it causes. Many senior households have already depleted their lifetime savings accounts and may well be using their credit cards to cover their monthly bills because their Social Security check(s) simply do not stretch far enough.

All this has led to a new American phenomenon: gray bankruptcy. The term refers to those aged 65 and over who have been forced to declare bankruptcy as the only way out of their crushing debt. Sadly, their percentages have gone from only 2.1% of all bankruptcies filed in 1991 to 12.2% today.

Will you lose your home if you file for bankruptcy?

When your medical, credit card or other bills become so overwhelming that you can no longer keep up with them, you may need some assistance getting back on your feet financially. Often, people in your shoes look into whether filing for bankruptcy may help them get a better handle on their financial affairs, but many of them have questions about the process and what they could potentially lose, should they file.

More specifically, one of the most common questions today’s prospective bankruptcy filers have is whether they will be able to keep their homes, should they decide to move forward with the process. While, unfortunately, there is no single, simple answer to this question, whether you will ultimately lose your home when you file for bankruptcy depends on the type of filing you pursue, among other considerations.

What can bankruptcy’s automatic stay protect you against?

As someone thinking about filing for bankruptcy, you may consider doing so because you want to put a stop to the constant barrage of phone calls and communications you receive from creditors. You may, too, be thinking about doing so because you have concerns about losing your car, your home, your paycheck and so on, and you may have heard that bankruptcy’s automatic stay may protect you in these areas.

Just what is bankruptcy’s automatic stay, and how can it potentially protect you once you begin the bankruptcy process? In essence, bankruptcy’s automatic stay refers to the period immediately following your bankruptcy filing, which is a period in which creditors have no right to contact you to attempt to collect your debts. While the automatic stay does not necessarily protect you against all creditors, it does protect you against:

Better days after bankruptcy

Few things in life prepare you for bankruptcy. Each part of the process is a bit like navigating without a map. You know you are going somewhere, but the scenery is unfamiliar.

Adrenaline is a good survival friend during the bankruptcy process, but once the ordeal is over the adrenaline leaves. You may enjoy a period of relief and relaxation, but unexpectedly, you begin to experience anxiety and mood swings.

The condition of child support in bankruptcy cases

When in the throes of insurmountable debt, even your highest priorities can take a major hit. Providing for your children from a previous marriage may be number one on that list.

If you are in arrears with your child support payments, can declaring bankruptcy ease the strain of this delinquency? It can, but not in the way you may expect. Keep the following information in mind as you prepare for the next steps.

Bankruptcy may help you get relief from medical debt

Healthcare costs have an uncanny ability to rise quickly. Even if you have a minor health condition or injury, you may spend thousands of dollars on medical bills. Whether or not you have health insurance, you may be facing the sort of debt that can cripple your financial life. You are not alone, though. In fact, roughly 70 million Americans have some amount of outstanding medical debt, shares Moneymunk. 

Bankruptcy may help you get relief from medical debt. Still, choosing to file for bankruptcy protection is a personal decision that only you can make. Before you decide, you should know a few things about medical debt and bankruptcy law. 

What documents do you need to file for bankruptcy?

At the height of the Great Recession, many Minnesota residents filed for bankruptcy. Those numbers went down in recent years, but 2018 saw an increase from the previous year. According to data from the United States Bankruptcy Court District of Minnesota, 9,761 people filed for bankruptcy in 2018, which is a 1.54 percent increase from 2017. 

Many Minnesota residents rely on bankruptcy to get their finances back on order. However, it is still a daunting process. The first thing you should do if you need to consider bankruptcy is to get all the paperwork in order. Gather the following documents before seeing your attorney. 

How to rebuild credit after bankruptcy

Bankruptcy impacts many aspects of your life. One of the areas where it hits hardest is your credit score. Someone with a credit score of 780 prior to bankruptcy, which is excellent, would see it drop around 240 points. Someone with a score of 680 may only see it drop by 150 points. 

Your bankruptcy will remain on your credit report for between seven and 10 years. That does not mean you have to deal with a poor credit score the entire time. After the court has approved your bankruptcy, you can start taking steps to increase it once again. In a few years, your credit score may fall back in the good or excellent range. 

Should you file for bankruptcy in retirement?

After having worked your entire adult life, you were likely looking forward to a serene retirement with financial security. Unfortunately, many people nowadays have seen this dream vanish in the wake of a financial crisis.

If you find yourself pondering whether bankruptcy is a smart and valid option for you in your current state of life living in retirement, you are not alone. Here is some information regarding filing for bankruptcy in your retirement years.

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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