Bankruptcy

WHAT IS BANKRUPTCY?
Bankruptcy is an opportunity for a “Fresh Start” for people with debt that has grown to be unmanageable.  The bankruptcy prevents creditors (business’ you owe money to) from taking any action to collect the debt.  It stops levies and wage garnishments.  Even a simple phone call or letter from the creditor are prohibited after filing bankruptcy and can result in severe penalties if disregarded by the creditor.

WHAT IS INVOLVED IN THE PROCESS?
The process starts with a consultation with an attorney to determine if bankruptcy is suitable for you, followed by a credit counseling session required by law.  Next, is the filing of a Bankruptcy Petition with the Federal Bankruptcy Court in Minneapolis or St. Paul Minnesota if you are a Minnesota resident.  This is done electronically at our office.  You are required to attend one meeting (usually in Crookston MN) which ordinarily takes 2 to 5 minutes which is also required by law. This occurs about a month after you file bankruptcy.  Finally, about three months after you file a bankruptcy, you receive your “discharge” which means your bankruptcy is complete and your debts are discharged forever.

WHAT PROPERTY CAN I KEEP?
You are permitted to “exempt” property depending on whether you choose Federal or State exemptions.  These typically include your home equity, retirement plans, household goods, tools of the trade, a vehicle, and many other types of assets, even cash and recreational vehicles.  However, this requires the assistance and analysis by your attorney to determine what applies to you.  Many people also keep assets that are secured by bank debt that does not fall into any exemption category if they continue to pay some or all of the payments on the asset.

WHAT DEBTS ARE NOT DISCHARGED BY BANKRUPTCY?
Typically, student loans, some tax debt and certain debt associated with fraud and drunk driving are NOT discharged.  Almost all credit card, medical, business and bank debt together with other types of debt are discharged in a bankruptcy.  Most people file because of medical and credit card debt, or a failed business.

HOW MUCH CAN I EARN AND STILL FILE BANKRUPTCY?
Surprisingly, the amount of money your can earn and still file a Chapter 7 bankruptcy is higher than most people think.  Examples are a single person household can earn over $40,000.00 per year.  A family of four can earn over $70,000.00 per year.  A family of 7 over $100.000.00 per year. The purpose is to allow you at to earn the “median” wage for a family of your size while still being able to file Chapter 7 Bankruptcy.   This determination requires the assistance of your attorney and can be complex.

WHAT DOES IT COST?
The bankruptcy typically costs between $1,600 and $2,000. for a Chapter 7 (the most common type of bankruptcy).  This includes,  attorneys fees, Debtor education fees, Credit counseling fees, credit report and Bankruptcy Court filing fee.   These are fees incurred in ALL bankruptcies.

HOW DO I FIND OUT IF FILING IS FOR ME?
Just give us a call.   We can do an initial determination over the phone.   Call us at 218-463-2088

Please CLICK HERE to print and complete the bankruptcy packet

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