Q. Will I lose all of my assets?
A. the bankruptcy code has put Minnesota exemptions in place. Exemptions exist at both the state and federal level with each having different exemption dollar amounts from the other. The exempt dollar amounts tell you what certain assets are allowed to be worth. If an asset exceeds the exempt amount, it may be seized so that it can be sold by a court-appointed trustee to satisfy the debt. Approximately 95% of individuals do not have to give up debts at all.
Q. Will I lose my car?
A. Not necessarily. If the equity in your car doesn’t exceed the exempt amount (the dollar amount an asset is allowed to be worth), then you do not have to worry about the court-appointed trustee taking the car to satisfy any of the debt. If you have a loan on the car, you can choose to reaffirm the debt with the secured lender. This means you continue paying your payment as usual.
Q. Will I lose my home?
A. If you have no equity in your home, you can keep your home. As long as you pay your mortgages on time, everything resumes as normal. At the same time, the property will not be relieved of any voluntary liens.
Q. Do all debts have to be listed?
A. All debts must be listed. It doesn’t matter if they are secured, unsecured, or if you plan to reaffirm a debt. Reaffirmation of a debt means you plan to keep it and pay it like normal. The list of debts tells your Minneapolis bankruptcy lawyer and the court the status of your financial situation.
Q. What debts cannot be discharged?
A. What debts can or cannot be discharged depends upon the bankruptcy chapter that is filed. Chapter 7 debts that are incurred dishonestly, through fraud, through harmful actions, or are criminal fines cannot be discharged. Unfiled taxes, priority taxes, restitution, child support, spousal support, and student loans also cannot be discharged.
Q. Can I transfer assets to someone else before filing?
A. Transferring assets to another person’s name can lead to the denial of your discharge. If assets are transferred within one year of filing bankruptcy, the bankruptcy trustee can recover these assets. If you want to protect your assets, knowing that you are going to have to lose something if you file Chapter 7 bankruptcy, consider filing Chapter 13 bankruptcy.
Q. Can I get credit after filing bankruptcy?
A. There is a good chance that you will start receiving credit card offers not long after you file bankruptcy. However, these cards are going to have high interest rates and fees. This means that you can expect good credit to become more difficult to receive. Two years after your bankruptcy is discharged, you are eligible to acquire a new mortgage loan at terms that are considered very good. Income stability and the size of your down payment are important factors.
Q. What if something happens I can’t make my Chapter 13 payments?
A. Chapter 13 plans can be dismissed by you. However, you can ask the court to modify your payment play by reducing your payments or suspending the payments for a month or two. You can make this request if there has been an increase in expenses or an interruption in income.
Q. Can I file bankruptcy without an attorney?
A. It is important to understand that bankruptcy is more than just filling out forms. There is a meeting of the creditors, also called a 341 meeting, and it is preferable that you have a Minneapolis bankruptcy attorney by your side, especially if creditors do appear at this meeting. It is also possible that your assets may not be as protected as you would like for them to be, thus causing you to lose assets you may not lose otherwise. No matter how simple the case may seem, the bankruptcy code is complicated.