There are two types of trustees. The first is a employee of the federal government working for the Department of Justice and are know as a United States Trustee. The second are private individuals called a Panel Trustee. Typically panel trustees in Minnesota are attorneys who practice or practiced bankruptcy law. When an opening presents itself attorneys will apply and be appointed (hired) by the Department of Justice. The U.S. Trustee is tasked with oversight of the panel trustee and the bankruptcy case. The Panel Trustee is the representative of the estate and is charged with the task of ensuring that the creditors receive fair repayment.

In most cases creditors receive no payment, this is also known as a zero asset bankruptcy cased. In zero asset cases the panel trustee is paid a flat fee of approximately $65.00 per case. Obviously that is not enough to pay their bills. In those cases with assets: greater than the exemptions; or which are not disclosed; or which are transferred to a insider (friend or family member) the trustee is also paid on a sliding fee scale. The typical scale is 25% for the first $5000.00 recovered, 10 % for the $5000.01 not to exceed $50,000.00, 5% for the $50,000.01 not to exceed $1,000,000.00. This creates an incentive for the trustee to investigate the case thoroughly. Because trustees are very adept at finding assets the worst thing you can do is transfer funds to an insider (friends or family) or try to hide assets. Doing either of these things converts a potential exempt asset to a nonexempt asset. If you are contacted by a Minnesota Trustee for any reason contact an attorney.

The U.S and Panel trustees in the twin cities and the rest of MN are:Jazmine Keller, Kyle Carlson, Bridget Brine, Paul Bucher, Julia Christians, Michael Dietz, Gene Doeling, John Hedback, Michael Iannacone, Mary Jo Jensen-Carter, Robert Kanuit, Dorraine Larison, Brian Leonard, Dwight Lindquist, Nauni Manty, Timothy Moratzka, Charles Ries, Randall Seaver, Joseph Stermer, John Stoebner, Patti Sullivan, David Velde

For those in the building trades facing collections, judgements and garnishments one option is bankruptcy. By filing bankruptcy the debt that is causing stress and the inability to turn any profit can be reduced. The end result is when the economy improves individuals in the building trades will have good financial footing without the debt. Failure to take care of the debt will often mean years (10 or more) working to pay down debt while many creditors collect through judgments and garnishment. Imagine when the economy improves the fruit of labor going into your pocket rather than to satisfy creditors. Taking care of the problem now will create a better future.

Often the best advise I can offer is to prioritize which is more important and do that first. If creditors have taken judgment and are going to garnish a bank account or wages you should file the bankruptcy first. If you are late on house payments and no unsecured creditor has judgment work on the modification.

If a bankruptcy is filed, one option is to file a chapter 13 bankruptcy. Individuals who are behind on house payments can both catch up on house payments and satisfy credit cards and medical debt. A second option in bankruptcy is to file a chapter 7. Many find it much easier to catch up on house payments and remain current when not burdened by unsecured debt. Contact me today to discuss how to keep your house.

1. I have been told that I will never obtain credit again. This is not true, credit card companies will often reissue credit immediately after discharge because the creditors know you can’t file another bankruptcy for 8 years.

2. I have been told that I will loose everything. Also, not true, bankruptcy in Minnesota includes generous allowances for personal possessions including house, cars, retirement and savings.

3. I feel like a failure. I hope you don’t. Many famous people have been in financial problems and have obtain a fresh start and have went on to great wealth. Some famous bankruptcy filings include: Tom Petty, Donald Trump, Willie Nelson, Larry King, and Thomas Jefferson just to name a few. In Minnesota we have average annual filings of around 15,000 per year. Chances are you know someone who filed and they just don’t talk about it.

4. My friends and neighbors will find out. Most likely they won’t unless you tell them. MN bankruptcy is a public record, however to search for bankruptcy filings a party would need to sign up for a special account administered through the federal court system.

The biggest problem I see is waiting too long before even considering a bankruptcy. At Bolinske & Bolinske we offer a free consultation. No one at our office will ever make you feel bad about filing. Also no one will ever pressure to file. I am happy to give you information to help you make an informed decision.

Chapter 7 bankruptcy takes on average 95 days from filing to discharge. Immediately after discharge individuals can begin to rebuild credit. Think about drawing a line in the sand. Prior to filing most individuals have credit scores of 500 to 600, which is low. Filing bankruptcy will not lower the score much more although it will be listed on a credit score. Once a discharge is received individuals will often receive credit card offers and extensions of credit. The reason is individual with income suddenly become debt free, therefore their debt to income ratio looks better. Creditors also know that an individual can not file another chapter 7 for eight years, their chance of being paid is high. Through responsible credit use, including charging only what you can afford and paying the balance in full and on time every month, as well as paying mortgage and car payments timely, credit scores will climb.

Debt consolidation or debt settlement will often take years to complete. The lengthy process will mean that the low credit scores of 500 to 600 will remain low until the debt is satisfied. Beyond the length many creditors will report settled in full or compromise in full as a designation on the credit report. Such designation are viewed as a negative.

The best thing to do when considering the affect that any process will have on your credit score is to know your options.

Debt consolidation will require a debtor to sign up with a service who takes over, through a power of attorney.  The debt consolidation company then begins receiving of statements, contact from creditors as well as legal notices.  For a while, usually 3-6 months things seem great  because no creditors are calling or sending collection letters.  The problem occurs when during those 3-6 months no payments are being made and interest climbs to 28-32 percent, late fees, and over the limit fees continue to add up.  In many of those cases individuals will end up with debt that started at $10,000 and will have ballooned into debt of $15,000 to $20,000, without the debtor’s knowledge.  Ultimately when no payments are received creditors will sue the debtor, obtain judgment and begin to garnish wages.  The judgment will include not only the nearly doubled bill but also the attorney fees incurred in obtaining the judgment.

Debt settlement involves using lump sums of cash to settle debts.  Creditors at times are willing to take a up front amount rather than wait for payments.  The problem with debt settlement is three fold.  First, all creditors need to agree to a settlement amount.  It does no good to settle with just a few creditors, all creditors must agree for settlement to work.  Second, you must have the cash up-front to settle the debt.  Cash up-front is the catch 22 of debt settlement.  If individuals had cash available they wold not be in debt.  The result of needing cash up-front involves borrowing or cashing out retirement or borrowing from family or friends.  Where as retirement is fully protected up to 1,000,000.00 in chapter 13 bankruptcy, debt settlement requires debtors to withdraw or loan from their retirement.  Third, are also tax penalties for retirement withdrawal and for settling debt.  Many individuals who settle find themselves owing money to the IRS which is a one of the worst creditors.

The problem with both, in addition to the success rate, is that both debt settlement and debt consolidation receive their payments up front regardless of success.  The up front payment also comes at the expenses of funds that would otherwise be used to pay back creditors.  Both business practices routinely are investigated and fined by the Minnesota Attorney General’s Office.  Debt consolidation companies are a multi billion dollar industry.  They exist to make money off of your debts.  Here is a link to the Minnesota Attorney General’s press release on debt settlement companies:

http://www.ag.state.mn.us/consumer/PressRelease/100222UnLicDebtSett.asp

For those individuals who would like to pay back their creditors a chapter 13 bankruptcy is a much better option than debt consolidation or debt settlement.  Filing chapter 13 bankruptcy in Minnesota involves creating a budget that allows for living expenses to be taken out first.  The living expenses include but are not limited to: house payments, car payments, food, gas, car repair, entertainment and clothing.  The difference between net income and your monthly expenses will go to pay back your creditors in 3 or 5 years.  Plans can call for as little as 5 percent to as much as 100 percent.  The other benefit is that no interest is accruing on the debts.  So long as the plan is followed for the 3 to 5 year plan the remaining debt will be discharged.

If you are considering debt consolidation or debt settlement I encourage a review of all options available.  Weigh the cost and benefits of those programs to Chapter 13 bankruptcy.  If you want to pay your creditors back, Chapter 13 is the best option.  Contact me today for a free consultation.

The problem is student loans are not dischargeable in bankruptcy except in extraordinary circumstances.  Banks and education loan institutions will fight tooth and nail to ensure that their federally backed loans are not discharged.  Often the cost to discharge the loans could be more than the loan itself.

The best option when facing student loan repayments is to discharge unsecured debts, such as credit card, healthcare and personal loans, by filing bankruptcy and then working out a repayment plan with the student loan provider.  Repayment plans options can include forbearance, deferment, income contingent repayment or income sensitive repayment.

Minnesota Attorney General Swanson has alleged that many of the companies are violating MN law by rolling over loans, over charging fees, distributing financial information to third parties and loaning more than allowed for short term loans.

Many individuals living paycheck to paycheck would be better off filing bankruptcy to discharge their unsecured debt and then using funds that previously went to unsecured creditors to create a rainy day fund.   After fees and interest rates are included, bankruptcy costs much less in the long run than trying to repay credit card debt and payday loans.

Our office is conveniently located at 6465 Wayzata Blvd., Suite 508, St. Louis Park, MN, just off 394 and Highway 100.  Appointments can be made for the same day or at another time that works for your schedule.  Call for a free consultation.

The cost can vary widely from attorney to attorney and law firm to law firm.  Large MN bankruptcy firms generally cost more.  Many small solo lawyers charge less in an attempt to undercut the competition.   The difference between the two is  solo lawyers are generally trying to service many clients and therefore have less time for individual clients, and large law firms can create an impression that you are a number.  Try to find a balance between the two.

The answer to what should be included in the paying a lawyer to file bankruptcy should be preparing and filing the bankruptcy petition, along with court appearances and communication.  Usually the biggest problem between clients and bankruptcy lawyers  falls with communication.  The lawyer you choose should be reachable with reasonable questions, after all you have not been through this before.  Two tell tail signs of problems is that you do not talk to an attorney when you initially call bankruptcy’s attorney’s office or you don’t meet with an attorney at your consultation.  The five minute attorney pop in at the end of  your consultation is not enough.
Bankruptcy filing in Minnesota is up right now, many individuals are going through financial trouble.  The result is there is now a lot of  lawyers starting their bankruptcy practice.  Essentially they are practicing on your case without full knowledge of the bankruptcy code.  Often these new bankruptcy  attorneys are general practitioners practicing on criminal, family, business, estate planning and now bankruptcy.  Find an attorney that practices bankruptcy law, they will be more knowledgeable and the process will go smoother.

Many attorneys forget that they are in a customer service job.  Failing to inform clients of what to expect from a bankruptcy at the time of filing and in the future is a common problem.  Your calls should be answered the same day and if an attorney is not available you should expect a return call within 24 hours.  When you interview an attorney at the consultation you should feel comfortable with the attorney.   Did the attorney spend time with you and answer your questions?  If not, it will only get worse after they have been paid.

The basic rule regarding bankruptcy cost and price is to ensure that you are comparing apples to apples.  Do your research, remember there is no free lunch, but the lunch should be reasonable.  Try to find a lawyer that matches the above criteria at a reasonable rate, not necessarily the cheapest price.