Minnesota Bankruptcy Lawyer » Minnesota Chapter 7

Who are the Minnesota Panel Bankruptcy Trustees, and What Do They Do?

Michael — Fri, 27 Jan 2012 19:11:39 +0000

A common question from debtors filing bankruptcy is who are the Minnesota Trustees and what do they do?

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

Chapter 13 Bankruptcy In Minneapolis

Chad — Thu, 26 Jan 2012 15:14:33 +0000

If you are thinking about filing for chapter 13 bankruptcy in the Twin Cities of Minneapolis and St Paul, your 341 meeting will most likely be held in downtown Minneapolis in the Plymouth Building. When you attend this meeting it is important to bring the following documents with you to make sure your case can be heard by the bankruptcy trustee: 1. most recent pay stub; 2. bank statements from the date of your bankruptcy filing; 3. Social Security card or W-2 from employment; 4. picture identification. If you bring these items to the meeting and show up a few minutes early to consult with your attorney the meeting should go well.
If the meeting goes as planned it should take around 10 minutes and the bankruptcy trustee will ask you questions regarding your budget and proposed payment plan. Once the 341 meeting has concluded your case should get confirmed in the next couple of months provided everything was working out with your plan. Once the payments start you must keep the monthly payments current or the trustee can kick you out of the payment plan.

Bankruptcy for Minnesota Contractors

Michael — Wed, 25 Jan 2012 16:03:24 +0000

As most are aware the building trades have been hit especially hard by the economic downturn. Prior to the downturn building trade professionals in Minnesota were having some of the best year in terms of income. What went up came down. The question is what to do about it. Homes are not being built, homeowners are holding back on improvements and even commercial properties are not immune in Minnesota. The end result is framers, finishers, contractors, painters, plumbers, drywallers, painters and landscapers are in trouble. For most in the building trades further credit is not an option. Banks and credit card companies that were friends during the boom years are now enemies; loans are being called in, credit limits are reduced and interest rates are increased.

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.

Undue Hardship Standard and Student Loans in Bankruptcy

Chad — Wed, 18 Jan 2012 15:54:06 +0000

I recently ran across an interesting article online at http://www.fastweb.com/financial-aid/articles/2259-congress-proposes-allowing-private-student-loans-to-be-discharged-in-bankruptcy. The author presents some pretty startling statistics about the number of cases where student loans are actually discharged. The article writes that of approximately 72,000.00 student loan borrowers who filed for bankruptcy protection only .4 sought a discharge of their student loans, and of those only 29 of the 72,000 actually received a discharge of their student loans. The reason for this is the difficulty in getting those loans discharged in bankruptcy. As I blogged about in a previous post the obstacles to getting a discharge of student loans can be overwhelming. It seems that the best chance for some student loan relief is congress passing a measure allowing for the discharge of student loans in bankruptcy.

The Problem With Student Loan Debt

Chad — Wed, 11 Jan 2012 16:04:45 +0000

I am seeing an increasing problem with student loan debt in my bankruptcy practice. I have run across individuals with over $100,000.00 in student loan debt, and the payments can be upwards of $1,000.00 per month. This leads a lot of people to ask me if bankruptcy can help with the student loan debt, and unfortunately in most cases bankruptcy does not help. The law is skewed against individuals being able to discharge their student loan debt in bankruptcy. A common standard th courts employ when determining whether to discharge student loan debt is an “undue hardship” standard.
The problem is not just the standard the courts employ to determine if you can get rid of student loan debt, you also need to consider the cost of legal representation to get rid of the debt. In some cases the student loan lenders force the debtor into a trial in bankruptcy court, then appeal any adverse rulings to higher courts. In most cases people who have student loan debt cannot afford the legal representation necessary to get rid of student loan debt.
Congress should pass common sense reform allowing people to discharge at least some of their private and government subsidized student loans. A system should be set up that allows people who have paid on their student loan debts for a certain amount of time to discharge those debts in bankruptcy, so they are truly able to get a fresh start out of bankruptcy. It would be a shame if people did not pursue an education out of fear of student loans that never go away.

Mortgage Modification or Bankruptcy First?

Michael — Wed, 04 Jan 2012 20:08:02 +0000

For individual looking to modify a mortgage and also considering a bankruptcy a common worry is that bankruptcy will disqualify them for the modification. The first and most important factor with the disqualification of a modification is whether a modification will be granted in the first place. In most instances the chance at modification of home mortgage are remote. Banks will review the information provided by individuals and often conclude that the same issues that caused late payments on the mortgage still exist. Those issues usually revolve around lack of income to afford the house and too much debt.

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.

Reasons Why People File For Bankruptcy In Minnesota

Chad — Wed, 21 Dec 2011 19:05:03 +0000

I have helped a lot of Minnesota residents file for bankruptcy protection. In many cases my clients do not want to file for bankruptcy but have been forced into bankruptcy by circumstances beyond their control. I talk to clients every day who have lost their jobs, had major medical issues (without adequate medical coverage), recently were divorced, or a small business has failed. In most cases the things that have happened to my clients could happen to anybody in Minnesota myself included. That is why when I meet with clients I try to understand all the things that have happened in their life to bring them to talk to me and do not judge the clients for having to talk to a bankruptcy lawyer.
It is important to remember for all the people who judge others for filing for bankruptcy protection, that they have not walked in their shoes and should attempt to put themselves in that position to see how they would feel. I have seen so many different reasons for a bankruptcy filing, that I realize that most clients only file for bankruptcy protection after they have no other options.
Most clients have exhausted all of their personal savings, retirement, home equity and once all of that is gone do they consider bankruptcy. In many cases these clients would have been better off talking to me earlier to see if I could help them save a few assets for retirement, by filing for bankruptcy protection earlier. I am sure you could find similar stories from the clients who attend 341 meetings in Minneapolis and St Paul every day. If you are thinking having financial difficulties in Minnesota you need to talk to a bankruptcy lawyer before you run through all your savings and still have a mountain of debt.

Jail For Not Paying Debts In Minnesota.

Chad — Tue, 13 Dec 2011 15:44:37 +0000

The general answer to this that you cannot go to jail for not paying debts in the State of Minnesota, debtors prisons are not allowed in America. The issue is that a part of the legal process in Minnesota allows creditors to get bench warrants issued if a debtor fails to appear for collection related hearings after not answering the financial disclosure form sent by the creditor. If a bench warrant is issued and you get pulled over for a routine traffic stop, you could be spending the night in lock up.
In most cases you can get out of jail by completing the form that was neglected that lead to the bench warrant in the first place. The other option is pay the bill that caused the bench warrant. In either case you are best off attending court or filling out the creditors forms if they are sent to you, if you fail to do this you could end up in jail. The problem with this procedure is that in some cases debtors have not received any of this information if the mail was not delivered. It also creates a situation where taxpayers will pay for jail for people who have failed to pay medical or credit card debts. If you want to avoid having a bench warrant issued for your arrest, you must fill out the financial disclosure form, or attend the court hearing if you do not fill out the disclosure.

BANKRUPTCY OR DEBT SETTLEMENT, WHICH IS BETTER FOR YOUR CREDIT?

Michael — Fri, 09 Dec 2011 18:04:50 +0000

A common worry that individuals have when thinking about bankruptcy is how will it affect their credit score. Many individuals considering bankruptcy will also consider debt settlement or debt consolidation as a way out of debt. The question is which is better or worse for your credit score?

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.

Does Bankruptcy Get Rid Of Home Loans.

Chad — Wed, 07 Dec 2011 17:45:34 +0000

The answer to this depends. If you file for bankruptcy protection in Minnesota and receive your bankruptcy discharge you will no longer be personally liable for any secured loans including home loans, car loans, boat loans, etc. The bankruptcy discharge gets rid of your personal obligation to pay on the loan. If you decide to stop making payments on the secured loan the lender cannot pursue you on the loan (provided you did not reaffirm the debt).
The lenders can still take the property back because that liability does not go away with a basic bankruptcy filing, so the lender can still foreclose on your home if you stop making payments after the bankruptcy. Lenders can also take back cars, boats, motorcycles, etc if you stop making the payments since those loans were secured by that vehicle as collateral. If lenders could not repossess property after bankruptcy they would be much less likely to lend, given the large liability if their customer files for bankruptcy protection. In some instances it is possible to strip off junior liens on homes, but that is not a given in every case, so you need to contact an attorney to determine if this is possible is your case.