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

January 27, 2012 By

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

Filed Under: Minnesota Chapter 11, Minnesota Chapter 13, Minnesota Chapter 7 Tagged With: , , , , , , , , , , ,

Bankruptcy for Minnesota Contractors

January 25, 2012 By

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.

Filed Under: Minnesota Chapter 11, Minnesota Chapter 13, Minnesota Chapter 7 Tagged With: , , , , , , , , , , , ,

Undue Hardship Standard and Student Loans in Bankruptcy

January 18, 2012 By

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.

Filed Under: Minnesota Chapter 11, Minnesota Chapter 13, Minnesota Chapter 7

Feeling Bad About Filing Bankruptcy

January 3, 2012 By

Similar to many problems the first step for bankruptcy is the hardest one, admitting that you may need a bankruptcy. Never once in all my years practicing bankruptcy have I met with a client who wanted to file. In most cases my clients have exhausted all available resources including borrowing from other credit cards, borrowing from family and friends, borrowing from savings and retirement and borrowing from their emotional health prior to resigning themselves that they should consider bankruptcy. I have asked clients why they are reluctant to even consider bankruptcy and the top answers are:

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.

Filed Under: Minnesota Chapter 11, Minnesota Chapter 13

Jail For Not Paying Debts In Minnesota.

December 13, 2011 By

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.

Filed Under: Minnesota Chapter 11, Minnesota Chapter 13, Minnesota Chapter 7

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