Payday Loans are Dischargable in Minnesota Bankruptcy

September 7, 2011 By

Payday loan providers have been in the news lately in Minnesota because of alleged unfair practices relating to interest rates.  For those who are unfamiliar with payday loans, the practice relates to giving loans to individuals who need cash before their next paycheck.  In exchange for the short term loan high fees and high interest rates are charged.

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.

Filed Under: Minnesota Chapter 13, Minnesota Chapter 7

MN Bankruptcy Attorney Office Location

June 14, 2011 By

Of the many calls I receive regarding bankruptcy one of the considerations in choosing us is the location of our office.  Although location of the law office is no doubt important, the most important factor is the quality of representation.  Most individuals are concerned with location because they believe that they will be coming to our office multiple times.  In most cases only one meeting at the office is necessary.  Through email, faxes, and telephone calls we try to keep the process as easy as possible, with as little disruption to your life and schedule as possible.

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.

Filed Under: Minnesota Chapter 13, Minnesota Chapter 7

Minnesota Bankruptcy Cost

June 9, 2011 By

On a daily basis I receive calls from potential clients who need a bankruptcy but are unsure of the cost.  The price for bankruptcy in Minnesota can range from $1000 to $10,000 or more.  The key to deciding which attorney to hire should be what is the cost, what is included in the cost, the experience of the attorney, and the customer service provided by the lawyer and staff.

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.

Filed Under: Minnesota Chapter 13, Minnesota Chapter 7 Tagged With: , , , ,

THE TRUTH ABOUT DAVE RAMSEY AND MN BANKRUPTCY

June 7, 2011 By

Recently I have had numerous clients express reservation regarding filing of bankruptcy because  Dave Ramsey has expressed his dislike of the process. Essentially, Ramsey claims that bankruptcy is a poor solution to financial problems. I am sure that he has “helped” numerous individuals out of debt. The problem is Mr. Ramsey employs a one size fits all approach that says bankruptcy is bad. Dave Ramsey recommends rather than bankruptcy that debtors pay him. To put it simply Mr. Ramsey is for profit and therefore has a reason to not recommend bankruptcy. He recommend his Total Money Makeover which cost money and is not guaranteed to succeed. Bias aside, Dave Ramsey admits that he himself has been through the bankruptcy but claims that it will rune your credit and leave psychological scars. He certainly seems to be doing well now, earning income “helping” people buy his debt elimination product.

Facts are facts most individuals who file bankruptcy have poor credit in the first place. The filing of bankruptcy doesn’t make any material difference when the credit score is in the 500 range. What bankruptcy will allow, contrary to what Dave Ramsey says, is for individuals to repair their credit quickly instead of dragging out the process for years. Bankruptcy will also ensure that there is no interest rate, no late fees and no over the limit fees. Instead, the large sums of money used each month for the credit card treadmill can be used by to fund retirement, pay for children’s college expenses or to pay on houses and cars. Dave Ramsey’s one size fits all approach also does not tell individuals that creditors will often reissue credit shortly after a bankruptcy because creditors know that the individual would not be able to file another bankruptcy for eight years and the income to debt ratio is fixed.

I don’t disagree with Dave Ramsey on every point. I always recommend that our clients file bankruptcy if appropriate and then fix the issues that caused them to file so they never have to file again. By filing bankruptcy rather than struggling for year you fix the immediate problem of creditor collections then you can fix the long term problem of proper financial management.

Filed Under: Minnesota Chapter 13, Minnesota Chapter 7 Tagged With:

Keeping your Home after Bankruptcy

June 24, 2010 By

One of the greatest concerns that homeowners who meet with me regarding bankruptcy have is whether they can keep their home after filing bankruptcy. The short answer is, it depends.

Keeping your home depends on how far you are behind on payments, whether the house is upside down (value of house is less than loans) and whether if all the other debts are discharged you will have enough to maintain payments on your house.

Banks do not want to take your home, after all banks are in the business of loaning money not owning property. For many of our clients, once the credit card debt is discharged they will have enough to keep payments current on their house.

Filed Under: Minnesota Chapter 7 Tagged With:

Star Tribune Article “In Jail for Being in Debt”

June 9, 2010 By

An article appearing in the Sunday Star Tribune and Tuesday online version of the Star Tribune (http://www.startribune.com/investigators/95692619.html?elr=KArksUUUycaEacyU) is drawing a lot of attention. The individuals in the article who are taken to jail are guilty of contempt of court for failing to comply with a court order. The United States of America has done away with debtor’s prisons, however failing to follow a valid court order is a jailable offense.

In the hyper-technical court system it is possible to go to jail for missing an appearance or failing to comply with a court request or court order even if you did not receive the paperwork. For many, rather than worrying about these details, they could avoid the possibility of jail and discharge the underlying debt by filing bankruptcy.

Bankruptcy will preclude any debt collector from collecting the debt or from using the courts to collect the debt. The end result is a debtor is protected from the debt collectors during the bankruptcy process and ultimately will receive a discharge for the debt.

Filed Under: Minnesota Chapter 7 Tagged With:

Benefits of Chapter 7 Bankruptcy

May 25, 2010 By

1. Once filed a bankruptcy automatically stops collection. This includes phone calls, letters, garnishments, levies, and foreclosure.

2. Bankruptcy also gives individuals relief to pay for their necessary monthly expenses, including catching up on car and house payments, because you will no longer pay for credit card, health debt or personal loans.

3. Bankruptcy allows individuals to keep funds in their retirement account including 401k, IRA and pensions. Bankruptcy also allows most individuals to keep their personal possessions.

4. Many individuals credit score actually goes up after filing bankruptcy because you are no longer on the credit card treadmill.

These are only a few of the benefits of bankruptcy. Call the bankruptcy lawyers at Bolinske & Bolinske at 952.294.0144 for your free fresh financial start consultation. You have nothing to loose but your debt.

Filed Under: Minnesota Chapter 7 Tagged With:

Why Choose Chapter 7 Bankruptcy?

December 1, 2009 By

If you are thinking about filing for chapter 7 bankruptcy in Minnesota you need to consider hiring a Minnesota Bankruptcy Attorney. A chapter 7 bankruptcy is the most common type of bankruptcy and once a discharge is granted it allows and individual or family a fresh start. In Minnesota a chapter 7 bankruptcy will discharge an individual from most types of debts, the most common debt is credit card debt and home mortgage debt.

One of the most important features of bankruptcy to individuals and families is the automatic stay that goes into effect after filing for bankruptcy. The automatic stay should stop phone calls and letters from creditors. It will also stop all wage and bank garnishments from happening until the automatic stay is lifted or a discharge of debt is granted by the court. This provides some breathing room for families and individuals from creditors.

In most cases credit scores can be repaired within a few years of filing a chapter 7 bankruptcy, provided that all payments after bankruptcy are kept current. The actual bankruptcy will stay on a credit report for 10 years, but individuals will sometimes qualify for a mortgage two to three years following a bankruptcy.

Other types of debts will not be discharged through bankruptcy some of this debt included student loan debt, tax debt that is less than three years old, child support payments, spousal maintenance payments, and judgement debt incurred through intentional torts. The above lists regarding dischargeable debt does not include all debt and an attorney should be consulted regarding dischargeable and non-dischargable debt.

The bankruptcy laws changed in 2005 and one of the main additions to the law was the inclusion of a uniform income standard to determine if someone is eligible for a chapter 7 Bankruptcy. In Hennepin County Minnesota the income limit for filing a chapter 7 bankruptcy for a household changes depending upon how many people live in a household. The median income figures constantly change and an attorney should be consulted before filing for bankruptcy given the new income limitations.

An individual may still be eligible for a chapter 7 bankruptcy if they make over the median income but they must complete and pass the means test. The means test is a complicated formula and will allow a Chapter 7 bankruptcy discharge to be granted if an above median income individual has less than $100.00 of disposable income every month to pay back creditors. Not all payments can be deducted on the means test and a Minnesota bankruptcy lawyer should be consulted prior to filing a bankruptcy using the means test. The main deductions allowing an above median debtor to qualify for a chapter 7 bankruptcy using the means test are secured debt payments on homes and cars.

Once the decision has been made to file a chapter 7 bankruptcy the typical process is to retain an attorney to fill out the bankruptcy petition. The bankruptcy petition will include information regarding all of an individuals assets and debts. It will also give the court information regarding the individuals income.

After the bankruptcy petition is filed with the court the next step is a 341 meeting with the panel trustee who will be handling the chapter 7 bankruptcy. The typical 341 meeting takes five to fifteen minutes depending upon the complexity of the case. Creditors and the U.S. Trustee can object to your bankruptcy petition for sixty days after the 341 meeting. If no objection is filed by a creditor, the U.S. Trustee, or any other interested party the chapter 7 bankruptcy discharge should be granted.

It is important that credit cards not be used after deciding to file for a Chapter 7 bankruptcy. If credit cards are used in contemplation of filing for bankruptcy it is bankruptcy fraud, and would subject the individual to criminal penalties and the debt would not be discharged.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Filed Under: Minnesota Chapter 7

Filing Chapter 13 Bankruptcy in Minnesota

December 1, 2009 By

Chapter 13 bankruptcy is often times referred to as a “wage earners” bankruptcy. A Minnesota chapter 13 bankruptcy is a bankruptcy that allows an individual to repay some of their debt through a plan. The bankruptcy plan will typically provide creditors with a payout ranging from 10% to 100% depending on the financial situation of the individual filing for bankruptcy.

A chapter 13 bankruptcy is often a good option for individuals who have a steady source of income and happen to fall behind on their house or car payments. The chapter 13 plan allows an individual to catch up on past due house payments or car payment by making chapter 13 payments through the plan. One of the requirements to get a chapter 13 plan confirmed is that the debtor have some disposable income to pay to creditors.

The length of a typical chapter 13 bankruptcy is either 36 or 60 months. A 36 month payment plan is available for individuals whose income is below the median for the county where they live. If a debtor’s household is under the median income the repayment plan will be 36 months. If the debtor’s household income is over the median the debtor will have to make a 60 month repayment plan. The median income for the county is constantly changing and care need to be taken to make sure the proper repayment length is used.

A Minnesota chapter 13 case starts with the filing of a petition. Once the petition is filed with the court a 341 meeting (creditors meeting) is scheduled around 30 days later. This meeting should take between five and fifteen minutes depending upon the complexity of the case. The meeting is to verify that all information on the bankruptcy petition is accurate as of the date of filing. Creditors can appear at the 341 meeting, but in a typical chapter 13 case no creditors will appear at the meeting. The following information needs to be produced at a 341 meeting in Minnesota, picture identification, proof of social security card, most recent pay stub, and the bank statements including the balance on the date of filing.

After the 341 meeting the court sets a confirmation hearing on the chapter 13 plan. If everything looks good on the chapter 13 plan the court will approve the plan and the individual will then be responsible to make the regular plan payments for the duration of the plan in order to get a discharge. A Minnesota bankruptcy lawyer will be able to advise you regarding your estimated plan payments and the requirements to get a chapter 13 bankruptcy confirmed.

One of the main advantages of the chapter 13 bankruptcy over other forms of debt consolidation is that the credit card companies will not be able to charge interest during the chapter 13 plan. This allows an individual to pay off principal on credit card debts instead of interest only payments. In a typical chapter 13 bankruptcy case debtors are paying around 30% interest on any past due credit cards. On $100,000 in credit card debt at 30% that means that you must pay at least $30,000 per year just to stay even on the credit cards. This means that interest only payments are around $2500 per month just to keep the credit card balance from increasing. You should consult a Minnesota bankruptcy attorney to determine if a Chapter 13 bankruptcy is a good option for you.

The other advantage of a chapter 13 bankruptcy has over other debt consolidation programs is the creditors have to accept a confirmed plan. This is oftentimes not the case with a debt consolidation program through private agencies. In many cases the creditors will not accept the proposed repayment plan through the debt consolidation agency. If the creditor does not accept the repayment plan their only recourse will be to sue to collect the past due balance.

In many cases the debtor thinks that the debt consolidation program is working great for the first six months, until they receive a summons and complaint in the mail from a law office. Once they are sued is probably the first they have heard from the creditor in six to nine months, and they entire time they thought that payments were being made on the account. In these six to nine months the creditor is also adding interest and late fees to the balance until the account is finally charged off. The reason the debtor stops getting bills from the creditor is oftentimes the debt consolidation agency will send out a form letter to all the creditors instructing them to stop contacting the debtor. This means that the only way the creditor can contact the debtor is with a summons and complaint from a law firm.

Filed Under: Minnesota Chapter 13

Minnesota Chapter 11 Bankruptcy

December 1, 2009 By

Minnesota Chapter 11 bankruptcy is typically used by businesses to reorganize their organization and debts. Chapter 11 is complicated and will typically require the assistance of a bankruptcy attorney to get all the required paperwork filed with the court and the U.S. Trustee. The main advantage of a Chapter 11 bankruptcy is that is allows for the “DIP” (Debtor in Possession) to maintain control of the company while it is reorganized. A DIP must comply with strict requirements in order to stay in the bankruptcy process. These requirements include starting new bank accounts, submitting monthly reports to the U.S. Trustee’s office, not paying any non-secured pre-petition debts (without order from the bankruptcy court), and maintaining the bankruptcy estate for the benefit of creditors.

The DIP will also need to have their attorney draft motions (sometimes referred to as first day motions) authorizing them to continue pay employees pre petition wage claims, motions to use cash collateral, motions to use the existing accounting system (if the DIP does not star new bank accounts), motions regarding DIP financing, motions to continue to pay vendors, and motions regarding utilities. Most of these motions should be granted by the bankruptcy court unless a creditor objects to any of the motions. A DIP must also comply with the local bankruptcy rules for the United State Bankruptcy Court for the District of Minnesota.

Once the first day motions have been decided by the bankruptcy court the DIP has 120 days to propose a plan or reorganization with the bankruptcy court. Along with the plan of reorganization the DIP must also provide a disclosure statement to the court. If this plan is approved by the creditors the DIP will need to stay current with the terms of the plan in order to continue with the Chapter 11 bankruptcy. The plan of reorganization can provide all creditors payment in full or it can provide partial payments to unsecured creditors. The main requirement being that all creditors in the same class are treated equally. A Minnesota bankruptcy attorney should be consulted before filing a chapter 11 bankruptcy, the process is complicated and requires a great deal of commitment from the attorney and the DIP.

Filed Under: Minnesota Chapter 11
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