Minnesota Bankruptcy Lawyer FAQs

What if creditors continue to contact me after filing for bankruptcy protection?
 

I creditors continue to call after filing a bankruptcy petition you should have them contact your attorney who will inform them that they are violating the U.S. Bankruptcy Code by violating the automatic stay. If they continue to violate the stay they can be subject to sanctions imposed by the bankruptcy court.

What are the common reasons for a creditor to file an adversary proceeding in my bankruptcy case?
 

The most common reasons for a creditor to file an adversary proceeding in your bankruptcy are because a large balance transfer, cash advance, or convenience check was made during the six months prior to the filing of the bankruptcy petition without the intent to repay the debt. The other common reason is making a false application for credit prior to filing for bankruptcy. The above examples are just a few of the reasons for a creditor to file an adversary proceeding, a bankruptcy attorney should be consulted for more information in regards to bankruptcy adversary proceedings.

What are some of the most common reasons people file for bankruptcy?
 

The most common reasons people file for bankruptcy protection are loss of job, medical emergency, divorce or separation, and reduction in income at current job. Most people do not have a financial safety resulting in the need to file for bankruptcy due to overwhelming bills.

Can I keep my vehicle if I file for bankruptcy?
 

You can keep your vehicle if you file a chapter 7 bankruptcy. If you are current on your car payments and go into bankruptcy you can continue to make your regular monthly payments and keep your vehicle. The other alternative is to enter in a reaffirmation agreement with the lender to keep your car after filing for bankruptcy. This is often a bad idea, since it will create a new obligation for you after your bankruptcy is finished. The best option is to continue to make regular payments without signing a reaffirmation agreement and the lender will not typically re-posses the vehicle is regular payments are being made.

Can I keep my home after filing for bankruptcy?
 

You can keep your home after filing a chapter 7 bankruptcy. A home is similar to a vehicle in that if you are current on the payments and can afford to make the regular monthly payments you can keep your home. In some instances the lender may want you to sign a reaffirmation agreement to keep the home, this is often times a bad idea. It creates liability after your bankruptcy is finished. It is expensive to repossess a home in Minnesota and the lender would typically prefer payments on the loan to another repossession to sell at auction.

What debts are not dischargeable in Minnesota chapter 7 bankruptcy?
 

The types of debts that cannot be discharged in bankruptcy are certain tax debt, most student loan debt, child support payments, court imposed restitution, court fees, debt incurred through fraud or theft, intentional torts, debts not discharged in previous bankruptcies that were not discharged due to fraud.

What types of debt can be discharged in a Minnesota chapter 7 bankruptcy?
 

Most debts are eliminated with the filing of a Chapter 7 bankruptcy. The most typical debt that is eliminated is credit card debt, personal loans, personal liability for vehicle loans, personal liability for home loans, utility bills, medical bills, and other revolving credit.

Does bankruptcy keep the creditors from calling?
 

The filing of a bankruptcy petition with the court creates what is called the automatic stay. The automatic stay places a hold on all collection activity until after the bankruptcy is concluded. If a creditor contacts you after they are aware that you filed bankruptcy they could be subject to sanctions imposed by the bankruptcy court.

How does bankruptcy affect my credit score?
 

Bankruptcy stays on your credit score for ten years, and will have a negative affect on your credit rating. Credit ratings are hard to predict given all the different financial circumstances on each individuals credit score. In some cases credit scores will improve a year after filing bankruptcy and people will actually be offered credit cards again.

Once I decide to file for bankruptcy what should I do with my credit cards?
 

If you have made the decision that bankruptcy is the right choice you need to stop using your credit cards immediately. If you continue to use your credit cards without the intent to repay those cards it could be considered bankruptcy fraud, and may prevent you from eliminating that debt. In most cases you should stop making payments on your credit cards and other debt that can be eliminated.

Do I have to list all debts on my bankruptcy petition?
 

You must list all debts and all assets on your bankruptcy petition. You must list all debts even loans from family and friends on your bankruptcy schedules.

What period does the bankruptcy court look at to determine eligibility for a Chapter 7 bankruptcy?
 

To determine if you are eligible for a chapter 7 bankruptcy your income has to be below the median income for the county where you live. The bankruptcy law provides that to determine eligibility for a chapter 7 bankruptcy you have to look at your previous six months worth of income. For example if you file bankruptcy in November, the law says the six months worth of income is May to October to determine if you are eligible.

Can I file bankruptcy without an attorney?
 

You can file a bankruptcy without an attorney, but remember the old adage “he who represents himself has a fool for a client”. Bankruptcy filing has been made substantially more complex since the new bankruptcy code went into effect in 2005. If you have any assets that need to be protected you should consult with a Minnesota bankruptcy lawyer, to prevent losing those assets to the bankruptcy trustee. The lawyer can provide advice regarding the bankruptcy exemptions, if you make a wrong choice on the exemptions it could cost you more than most attorneys charge for filing a bankruptcy. A chapter 13 bankruptcy should never be undertaken without an attorney, they are very complex and full of local rules and customs that even a well versed consumer would not be aware of.

Should I continue to pay my credit cards bills?
 

In most situations you should stop paying your credit card bills once you decide to file for bankruptcy. The only bills that should continue to be paid are on items that you would like to keep like a vehicle or house.

Will bankruptcy stop a wage or bank garnishment?
 

A bankruptcy will stop a wage or bank garnishment as soon as the creditor learns of the bankruptcy filing and the automatic stay goes into effect.

Will I lose my job if I file for bankruptcy?
 

You cannot be fired from your job for filing for bankruptcy protection.

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