Answers to Your Most Pressing Bankruptcy Questions
– Rosenzweig Law Office serving the Twins Cities area
Chapter 13 Bankruptcy Category
ANSWER: It can be scary and stressful to work hard at your job only to find that you don’t have enough money to pay your bills at the end of the month. You know that you can’t keep living like this, but you aren’t sure what to do to end the cycle to regain control of your life.
There are, unfortunately, creditors, collection agencies, debt consolidation companies, and other entities out there that will try to take advantage of your situation. They may pressure you to make immediate financial decisions without thinking through the consequences or they may tell you that you have no choice but to follow their directions.
It is important to be wary of what these people, companies, or groups are telling you. They are looking out for their own best interests, not yours.
It is important to contact a Hennepin County bankruptcy lawyer. As a wage earner, you may be eligible for a Chapter 13 bankruptcy in Minnesota. There may be a way for you to keep your assets and get financial relief. Your Hennepin County bankruptcy attorney is required to look out for your best interests and to provide you with trustworthy legal advice.
For more information about what you can do to get out of financial trouble, please call one of our experienced Hennepin county bankruptcy attorneys today for a free consultation. We can be reached at MN (952) 920-1001 or AZ (480) 207-2203. We also encourage you to read our FREE book, What You Need to Know About Filing Bankruptcy in Minnesota, for more information.
ANSWER: A Chapter 13 bankruptcy proceeding in Minnesota may allow you to keep your home and avoid foreclosure. Even if you are behind on your mortgage payments, you may be able to keep your home in Chapter 13 bankruptcy cases.
In a Chapter 13 bankruptcy case, you together with your Minneapolis St. Paul bankruptcy lawyer will file a repayment plan to deal with paying your bankruptcy eligible debts. If you are behind on your mortgage payments, then the repayment plan may include monthly payments over a 3-5 year period to pay off your past payments.
At the end of the repayment period, some of your other debts, such as your credit cards may be discharged. Thus, you would have more income available each month to pay your mortgage and stay in your home.
If are struggling financially and you are committed to staying in your home, then it is important to contact an experienced Minneapolis bankruptcy attorney as soon as possible. Attorney Barry Rosenzweig will help you understand your legal options and take the necessary steps to achieve your goals.
You do not have to live in fear of losing your home. Nor do you have to fear being judged when you call our Minneapolis bankruptcy law firm. We understand your situation and will do everything that we can to help you achieve your goals. Please call us today at MN (952) 920-1001 or AZ (480) 207-2203 for more information. We also invite you to read our FREE book, What You Need to Know About Filing Bankruptcy in Minnesota to learn more.
ANSWER: While the terms sound similar, there are significant legal and practical differences between Chapter 13 bankruptcy dismissals and Chapter 13 bankruptcy discharges. As a Minneapolis Chapter 13 bankruptcy petitioner, it is important to understand the difference between these two possible ends to your bankruptcy case.
A Chapter 13 bankruptcy dismissal means that the Bankruptcy Court has dismissed, or ended, your case before you achieve a legal discharge. If a dismissal occurs, then your debts have not been legally satisfied and creditors may continue to use legal methods to obtain recoveries.
However, if your Chapter 13 case is discharged, then it means that you have satisfied all of the Chapter 13 bankruptcy requirements. The debts that were at issue in your case are deemed satisfied and those creditors no longer have any valid claims against you.
Given these important differences, it is a Minneapolis bankruptcy discharge that you want. It is bankruptcy discharge, not a bankruptcy dismissal, which will allow you to move forward with your life and take charge of your financial future.
For more information about how to achieve a Chapter 13 bankruptcy discharge and how to avoid a Chapter 13 bankruptcy dismissal, please call an experienced Minneapolis-St. Paul Chapter 13 bankruptcy lawyer today at MN (952) 920-1001 or AZ (480) 207-2203. We also invite you to download a complimentary copy of our FREE book, What You Need to Know About Filing Bankruptcy in Minnesota, to learn more about bankruptcy protections.
ANSWER: Even with the debtor’s limited ability to dispose of property to operate its business, business debtors sometimes need additional loans for operating capital. In these cases, the debtor may obtain the necessary loan by having the court grant superpriority status to the new lender, which puts that lender ahead of other unsecured creditors with regard to repayment. Alternatively, the court may give the new lender secured status by approving the use of collateral.
ANSWER: A lien is a security interest held by a creditor that enables the creditor to take an ownership interest in a debtor’s property in the event of unpaid debt. For example, a mechanic’s lien provides construction companies and other contractors who improved real or personal property with ownership rights in the improved property if labor costs are not paid.
To find out more information about bankruptcy in Minnesota, please read our FREE book: What You Need to Know BEFORE you File for Bankruptcy in Minnesota.
Contact our office to schedule an appointment to speak with us. You can reach us by using our online form. We can also be reached by phone at MN (952) 920-1001 or AZ (480) 207-2203. Our attorneys can help you to decide whether bankruptcy is right for you and, if so, which type makes the most sense for your particular circumstances. Different types of bankruptcy have different eligibility requirements, and so it is very important that you consult with an attorney prior to planning any bankruptcy-related action.
ANSWER: The primary pieces of information that must be contained in a Chapter 13 bankruptcy repayment plan are: the duration of the plan (typically three or five years), the amount of money or other assets that the debtor is to pay to the trustee and the amount of money to be paid to each creditor. If any creditors will be compensated outside of the plan, the plan must specify which creditors will be paid in that manner.
ANSWER: Yes; creditors have no right to block a plan from being approved by the court. It is the bankruptcy judge, not the creditors, who has the power to approve or deny a repayment plan. However, unsecured creditors may file objections to the plan. The court must evaluate these objections prior to approving a plan. Secured creditors, by nature of having their loans secured by collateral, are entitled to repayment in the amount of the full value of the collateral (which is not necessarily equal to the full amount of the loan). Thus, secured creditors may opt to be paid the value of the collateral rather than the amount in the plan. However, exercising that option will not block the rest of the plan from being approved by the court.
ANSWER: Except for certain exempt categories of debts such as alimony and student loans, all unsecured creditors are on equal footing regarding their rights to object to a plan, i.e. they may object to a plan but, unlike secured creditors, are not entitled to demand a certain amount of money.
Unsecured creditors are not on equal footing with regard to priority, however. The court is permitted to approve a plan in which some unsecured creditors receive a larger percentage of the amount owed to them than other unsecured creditors receive. These distinctions are typically made by sorting the unsecured debts into categories and assigning priorities to the various categories. Thus, some unsecured creditors may receive most or all of the money owed to them while other unsecured creditors receive almost nothing.
ANSWER: Unlike bankruptcy judges, private debt consolidation firms do not have judicial authority, and so they have no legal powers over any of the debtor’s creditors. For example, a court imposes an automatic stay on creditors, which prevents them from continuing or starting any debt collection measures against the debtor. A private firm can not impose a stay because it has no power to limit the actions of creditors. Similarly, a court can make creditors accept partial payment as full payment, while a private firm can not force creditors to take a loss on their loans.
ANSWER: Your credit score, otherwise known as a FICO score, is a measure of how likely you are to pay your obligations in a timely manner. Your credit score will probably decline temporarily after a bankruptcy case has been filed because bankruptcy indicates an inability to pay your debts. However, if you keep up with your repayment plan requirements, your debts will be discharged at the completion of the plan. Because the discharge effectively erases the remaining unpaid debt, your credit score will likely improve.
ANSWER: Yes. Chapter 13 cases are public record, and so credit reporting agencies may publish the names of the debtors involved. However, publications such as magazines and newspapers that have a broader readership do not typically publish the names of debtors except in the case of celebrity bankruptcy.
ANSWER: Probably. In most cases, the court will order the employer to garnish the debtor’s wages and send the required amounts directly to the trustee rather than giving the debtor a regular paycheck and leaving it up to the debtor to pay the trustee. The court may also contact the employer in order to confirm the debtor’s income. However, if the debtor can show adequate cause for not involving the employer, the court may choose not to inform the employer.
ANSWER: Yes. A debtor may move during bankruptcy but must provide prompt written notification to the court and the trustee. Many courts have change-of-address forms for this purpose, as most court orders and trustee-issued notices are sent to the debtor via mail. If the debtor does not respond to a notice or order, the case may be dismissed, and so it is very important that the debtor have a current address on file with the court and the trustee.
ANSWER: While the debtor in possession generally cedes authority over its assets to the trustee, the debtor may still use, lease or sell many of its assets in the ordinary course of its business without first getting the court’s permission to do so. The court, however, may limit that authority in cases in which there is a particular risk of the debtor depleting the bankruptcy estate. If the debtor wishes to use, lease or sell its assets outside of the ordinary course of its business, it must first get the court’s permission to do so. The debtor must also get court approval to spend “cash collateral.”
ANSWER: No, you should not wait to contact a Minneapolis foreclosure attorney. The time to contact a lawyer and negotiate with the bank is now, before any formal action has been taken and before the problem becomes any worse. When you, or your Minneapolis St. Paul foreclosure lawyer, contact the bank proactively it appears that you are eager to do what it takes to keep your home.
You are no doubt facing lots of different emotions, ranging from fear to embarrassment to sadness to anger about your current situation. It may be tempting to let each day pass and be grateful that you have been allowed to stay in your home another day. However, now is not the time to bury your head in the sand. Now is the time to prepare and proactively take the steps that you can to protect yourself and your family.
You can schedule a free consultation with an empathetic and experienced Minneapolis foreclosure lawyer today by contacting the Rosenzweig Law Office at MN (952) 920-1001 or AZ (480) 207-2203. Together, we will work hard to get you the relief you need so you can rest at night without the fear of a looming foreclosure weighing on your mind.
ANSWER: Chapter 13 bankruptcy which involves a payment plan established by the bankruptcy court and you and allows for the ordering payoff of your debt. After the court consolidates the petitioner’s debts and considers the debtor’s financial ability to make payments, it orders monthly payments. During the repayment period, the debtor is allowed to continue collecting his or her regular sources of income and may also retain ownership of property. Because of this, Chapter 13 bankruptcy is also known as a “wage earner’s plan.” Most payment plans under Chapter 13 bankruptcy filings are quite affordable for the debtor. At the end of the plan, most of the debtors unsecured debt is discharged (wiped out).