Minnesota Bankruptcy Lawyer

Bankruptcy Questions

Chad — Tue, 27 Jul 2010 16:35:32 +0000

My best advice is if you have questions during your bankruptcy filing to give your attorney a call. In most cases your questions can be answered with a minute or two on the phone, so why sit and worry when you can get an answer. The reason you hired an attorney is so you do not have to worry about paperwork received from the court. If you received a lift stay motion, notice to file proofs of claim, discharge notice, or numerous other documents from the court and you do not understand what they mean, give a call or email. I have seen most of these documents hundreds of times and in most cases they are nothing to worry about, but as a client you have not seen these motions hundreds of times and you may need some assurance that you do not need to do anything. In most bankruptcy cases if you do not hear from your attorney it is a good thing, it means everything is going smoothly. Just remember that your attorney can not read your mind, and does not know of issues unless you address them.

Effectiveness of Home Mortgage Modifications

Chad — Thu, 15 Jul 2010 15:44:25 +0000

Is mortgage modification effective at preventing foreclosure? I have been looking for statistics regarding the effectiveness of mortgage modifications and have not found any good evidence of the effectiveness of the program. I can report that with my clients most receive a small reduction in their mortgage payments, but most do not receive any large payment reductions with mortgage modifications. The process also seems to take between six months and a year to complete. Lenders forgiving principal on the loans is not common, which is probably the most effective way of preventing foreclosure.

Easy Credit

Chad — Thu, 08 Jul 2010 20:14:53 +0000

In many cases credit scores are important if you want to finance a home or car. If you have a good credit score you will receive a lower interest rate. The problem is that if you finance a home or car that is too expensive even with a good interest rate, you will not be able to save any money. In many cases if you cannot pay for an item with cash, then you should probably not buy that item. The availability of easy and cheap credit is a big problem for most people if you get yourself leveraged with huge monthly home or car payments.

Keeping your Home after Bankruptcy

Michael — Thu, 24 Jun 2010 15:29:37 +0000

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.

Helping Your Attorney

Chad — Tue, 22 Jun 2010 18:16:31 +0000

In order to have your bankruptcy go smoothly it is important to get the information requested by your attorney. In order to get a bankruptcy filed in a timely fashion it is important for both the attorney and client to work together to achieve a good result. If you do not get the information requested by your attorney your bankruptcy will be delayed, since in most cases the client is the only party in possession of the needed documentation.

Bankruptcy Process and Disposing of Assets

Chad — Thu, 17 Jun 2010 16:44:30 +0000

It is important for people in the bankruptcy process to remember to not sell or dispose of their property until it is approved by the trustee. We generally recommend that our clients refrain from selling cars, homes, or other personal property until after the bankruptcy trustee has abandoned the assets. In many cases you are better off waiting until after your bankruptcy discharge to make any important financial decisions. The entire process for filing takes around 100 days, and most people should be able to wait that long to get rid of property. If you have any questions about what to do during the bankruptcy process you should give your attorney a call to discuss the situation with him or her.

Bankruptcy vs. Debt Consolidation

Chad — Thu, 10 Jun 2010 18:20:18 +0000

Many of our clients have tried debt consolidation before talking to us about bankruptcy. In most cases the debt consolidation was not effective for the clients, the debt consolidator simply charged incredible fees, but never delivered on the debt relief. The clients then talk to me and find out that they should have filed bankruptcy before even attempting the debt consolidation. In many cases consulting with a bankruptcy attorney would have saved the client thousands of dollars and would have solved the debt problem. The main issue with debt consolidation is that they provide a service that the client could perform on their own. They basically let all the credit card debt charge off, then send settlement offers to the organization that holds the debt for a percentage of the outstanding balance. This could be done by the client and the client would then save all the fees associated with the debt consolidation agency. The other thing most debt consolidators do not tell their clients is that they will be forced to pay 1099 tax liability on the difference between the original amount owed and what the debt settled for from the debt settlement. They also do not tell their clients that the debt settlement is extremely damaging to their clients credit score for years. In the end you should consult an attorney to see about your bankruptcy options before you talk to a debt consolidator, in many cases bankruptcy is the better option.

Star Tribune Article “In Jail for Being in Debt”

Michael — Wed, 09 Jun 2010 14:58:16 +0000

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.

Top Ten Things to Avoid Before Filing For Bankruptcy

Chad — Thu, 03 Jun 2010 14:39:08 +0000

If you are thinking about filing for bankruptcy this list has a few of the worst things you can do before filing:

1. Transfer property to friends or relatives;
2. Pay back friends or relatives for loans before filing for bankruptcy;
3. Deplete your retirement accounts to pay back creditors or pay bills;
4. Transfer money from retirement accounts to non exempt accounts;
5. Use credit cards for purchases, cash advances or balance transfers;
6. Take out new credit before filing for bankruptcy;
7. Attempt to hide or transfer assets to protect them from the bankruptcy Trustee;
8. Not getting good advice when thinking about filing for bankruptcy;
9. Talking to a debt consolidation company, before consulting with a bankruptcy lawyer;
10. Waiting to consult an attorney until you are being sued or garnished due to your debt problems.

This list does not cover every potential pre bankruptcy problem, to get more specific information you would need to contact an attorney if you are having debt problems.

Bankruptcy Myths

Chad — Tue, 01 Jun 2010 19:36:48 +0000

When I talk to clients I often hear a lot of bankruptcy myths. The most common one is that bankruptcy will ruin my credit. In many cases people who are worried about their credit have not even checked their credit score, and the bankruptcy does not drop the score any lower than it already is. The other common thing I hear is that people know the law changed in 2005 and they think they can no longer file for bankruptcy. This is certainly not the case. Many people have filed since the law changed, you just need to talk to an attorney to determine your eligibility. The next most common myth is that you will lose your home or car in bankruptcy. In most cases you can exempt your vehicle or home and keep it after the bankruptcy. You should talk to an attorney to determine what you can keep after filing for bankruptcy.