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Bankruptcy

In nine days, you can silence your creditors forever

Is the prospect of continual payments to the credit card companies affecting your life? Do you have unresolved medical or tax bills? Are creditors calling you so much you don't answer your phone? 

It's exhausting to live like this, it's exhausting to constantly worry about the bills. We can help.

What if someone told you that nine days from today you'll never hear from your creditors again? It sounds a bit impossible, but actually, it's more than possible. If you call us today, you could literally be on your way to debt freedom nine days from now. 

What is Bankruptcy and how does it work?

Bankruptcy is a legal process by which you can rid yourself of all the negative debt against you and start your life over. Basically, you and your attorney put together a snapshot of your life to present to the court. Your finances, bills, debts, assets and so on will all be part of your legal case. All we need from you is some information and we can get you on the road to removing  your debt and getting your credit score to skyrocket. 

For individuals and couples, there are two types of bankruptcy, a Chapter 7 and a Chapter 13. For businesses there is a Chapter 7 and a Chapter 11. For farms there is a Chapter 12. The most common type of bankruptcy filed is a Chapter 7, followed by a Chapter 13. 

How a Chapter 7 works for you

In a Chapter 7 bankruptcy the court allows you to discharge all of your debts while keeping most, if not all of your assets. It is completely legal and it is a huge benefit to most people. The true value of bankruptcy isn't just the money you discharge, but it's also the money you will have moving forward. 

Common Questions about Bankruptcy:

What are the Upsides of filing for Chapter 7 Bankruptcy Protection?

There are several.

  • Filing a chapter 7 bankruptcy for you and/or your spouse enables you to immediately and permanently relieve yourself of creditor harassment, lawsuits, and garnishments the day you file for protection.
  • In a very short time period, a chapter 7 will eliminate all of your unsecured debt (except child support and alimony).
  • You will very likely be allowed to keep your car and home without issue (there may be times when a car or house has simply too much equity, in these cases a chapter 13 may be more appropriate).
  • You may be able to discharge back taxes.
  • In less than a year your credit score will start to increase, possibly significantly.
  • You will qualify for new car loans.
  • In two years, you will likely be able to qualify for a home mortgage.
  • The money you were spending on paying off credit cards can be used for investing, education, vacations, home improvements and so on.
  • You will be so much better off than you were literally a day earlier.

What are the Upsides of filing for Chapter 13 Bankruptcy Protection?

Many of the chapter 7 protections apply here. But there are slightly different procedures. Please see the bankruptcy section above on the differences between Chapter 7 and Chapter 13.

  • Filing a chapter 13 bankruptcy for you and/or your spouse enables you to immediately relieve yourself of creditor harassment the day you file for protection.
  • You will likely pay pennies on the dollar to any creditor you owe money to.
  • You may be able to consolidate all the loans, tax repayments, back mortgage payments etc. into a much more manageable monthly payment. In less than a year your credit score will start to increase, possibly significantly.
  • You will qualify for new car loans.
  • In two years, you will likely be able to qualify for a home mortgage.
  • After a few years, the money you were spending on paying off credit cards can be used for investing, education, vacations, home improvements and so on.
  • You will be so much better off than you were literally a day earlier.

What are the Downsides of filing for Bankruptcy Protection?

  • If you have good credit, you may take a slight hit (but will very likely recover, those with low scores before filing will see increases over the next year).
  • If you make too much money or have too many expensive assets you may have to file a chapter 13.
  • It can be expensive. A chapter 13 can cost $3,500 or more, though the money does not have to be paid all at once. A Chapter 7 can run slightly to significantly less than a Chapter 13, but the money needs to be paid up front.
  • If you share a debt with another named person, your filing will not remove them from responsibility.
  • You cannot file for bankruptcy again for several years depending on which Chapter you file.
  • You will likely not be able to qualify for a home loan for at least two years.
  • It is possible that car loans will be more expensive for a little while.
  • The filing will be on your credit score for up to ten years.
  • If you are in the financial industry (in extremely specific fields) there may be some pushback on filing.

Does it cost a lot of money to file bankruptcy?

It is not free, but the benefit you get from it can be worth 100 times what you spend. Imagine you owe $50,000 in debt, but in 90 days that debt could be gone forever? Is that worth $5,000? $4,000? $2,000? You get the idea. Another way to look at your situation is to ask yourself “would you pay someone $2,000 for them to give you $50,000”? Obviously you would. But it's not just the $50,000 or $15,000 that you're getting rid of, it's the monthly payments, the dings to your credit report and so on. The money you are no longer spending on creditors can be used for so many important things in your life. Filing bankruptcy is the easiest and fastest way to be debt free.

Another law firm suggested I file for Chapter 13 even though I qualify for chapter 7. Why would they do that?

Sadly, this happens too often. Firms make much more money when you file a chapter 13 rather than a chapter 7. At Eraser law we believe you should file for the bankruptcy that makes sense, and most of the time people qualify for a chapter 7. In that case they should file a Chapter 7. Jon Oliver did a remarkably interesting piece on bankruptcy and filing the wrong type of case. It will also give you a good background on bankruptcy with some laughs included.

https://www.youtube.com/watch?v=GzFG0Cdh8D8

Some law firms offer a $0 down bankruptcy. Does your firm do that?

You have probably heard the phrase, there is no such thing as a free lunch and firms offering $0 down bankruptcy is a perfect example. In a Chapter 13 you could probably put $0 down plus the filing fee and the firm will get you filed, we will too. But if any firm offers a $0 down Chapter 7, it is likely not as it appears. Either you or more than likely somebody who will vouch for you will have to sign a commitment to pay the firm. We will never do that to you.

How much can I make and still file Bankruptcy?

You can make a lot and still file. There is no income limit to file a chapter 13 bankruptcy. For a chapter 7 you are “means tested” depending on the state you live in. This means if you make over a certain amount of money you cannot qualify for a chapter 7. For instance, if you are single and make more than $61,811 per year, you may have to file a Chapter 13, or there may also be a few deductions to get you under that number. For a family of four the income limit to file is $118,646. The more people in your house when you file, the higher the income can be. The “means test” is based on your last six months of income, so sometimes the time when you file matters.

Minnesota Chapter 7 Bankruptcy Income Limits

# of People

Annual Income

1

$61,811

2

$81,478

3

$100,430

4

$118,646

5

$127,646

6

$136,646

7

$145,646

8

$154,646

9

$163,646

Can I keep my stuff? House, car, tools, T.V. etc.?

In most bankruptcy filings, clients are more than likely going to be able to keep their important assets. If for some reason you have an extremely high dollar asset that cannot be protected, we will need to discuss it before filing. But there are a lot of “exemptions” or ways to protect most of your assets. We will go over all the exemptions you have but they can be hundreds of thousands of dollars if not more. Most, if not all of your “stuff” will be protected. About 95% of Minnesota bankruptcy filings are non-asset cases, meaning the filers do not lose anything.

Can I protect my retirement accounts?

Yes, you can. Minnesota allows for over one million dollars to be protected for an IRA account, your 401ks and 403b's as well. Most pensions are also protected as well as Social security and most other retirement benefits.

Follow up: Should I cash out my retirement account to pay my debts?

I think you know the answer is no. Your retirement accounts are sacred and to benefit you in the future. Creditors cannot come after them so please keep them safe.

I don't have a retirement account; can I start one?

Absolutely, but before you do, if you're thinking about filing bankruptcy soon, let's discuss the timing of starting a retirement account.

Will my credit card accounts be closed? Should I get new credit cards?

More than likely the credit card accounts you have will be closed by the lender when filing bankruptcy. However, very soon after filing you will likely get new credit card offers from the same lender you just zeroed out. The question of getting a new credit card is an interesting one, but more than likely you should. It helps build your credit score up, but it is also something we can discuss during our meeting.

What about the debt collectors?

Yeah, they are the worst, aren't they? The truth is, nothing will silence them faster than you filing for bankruptcy protection. We are serious when we say you could silence them forever nine days from right now. The moment we file your bankruptcy petition, creditors can no longer contact you. Even if you have hired us, and you tell them you have a lawyer, they cannot contact you for thirty days. We will file your case, get you through the bankruptcy process and say goodbye to those creditors forever.

What if a creditor has garnished my paycheck or levied my bank account? Can they do that?

It may have been an awful surprise to see your bank account zeroed out or your paycheck much smaller than you thought it would be. That means a creditor successfully sued you in court and got the court to issue paperwork allowing the creditor to take your hard-earned money.

Can I get money back from the creditors after they took it from me?

There are two ways to get money back. Creditors are only allowed to take 25% of your earnings, so if your bank account was wiped out, you may have recourse against them. They cannot take social security, unemployment, or other protected money, but most people don't know that, so even if the creditors take it, they won't return it unless challenged. If your money has been in your account for more than twenty days you may lose the right to get it back without help from us.

But the better way to get your money back is to file bankruptcy. We may be able to get all of the money back in the previous ninety days from your creditors. It does not always work, but it almost always does. If you have had money taken from your account or paycheck you have limited time to get it back. Call us to discuss.

I am about to get foreclosed on, can bankruptcy help?

Definitely. By filing bankruptcy, you can either stop the foreclosure and buy time (months and months, possibly more), or you can put your overdue mortgage payments in a Chapter 13 plan and pay back the amount owed over several years with no fear of foreclosure. Call us for more details but be aware that foreclosure is very time specific, and you will want to protect as many of your rights as you can.

Can filing for bankruptcy help me remove judgments?

Yes. It is a crucial first step, and after filing it is not that difficult to remove judgments from your record. It is also important to do in case there is a judgment lien against your property, and you ever want to sell that property, you will definitely want the judgment removed.

What about discharging back taxes?

There are a few answers here as well. It is possible in a Chapter 7 filing to discharge back taxes if they are at least three years old and you several other qualifications. It is a possibility, but you cannot have evaded filing or committed fraud. You can also file a chapter 13 to reorganize your back taxes and pay them back slowly over several years. This will stop the IRS or state from assessing more penalties and liens as well.

Does my spouse have to file with me?

In some states that may be the case, but in Minnesota your spouse does not have to file if you do. Sometimes it will make sense to if you are both on the same bills and is much cheaper to file together than separately.

Do I have to go to court?

It would be extremely rare that we would ever go to court. The procedure is that you and your attorney will go to a meeting and meet with someone called a trustee about thirty days after filing your paperwork with the court. The trustee will ask you about fifteen questions, and none of them are meant to be surprising. The whole meeting takes about five minutes. For a chapter 13 the meeting might make ten minutes and be a little more detailed.

Regardless of the type of bankruptcy you file, most clients leave the meeting asking the same question: That was it? The fact is, we try not to make it hard on you at all, we will do the work and be there with you at the meeting. When clients are done with that one meeting, they usually have a huge sense of relief and the stress will melt away.

Do I need an attorney to file bankruptcy?

Of course not. Just like you do not “need” a dentist to remove your own tooth, and you could learn all about cars to fix your engine when it breaks down. This is a very specialized area of law and even most lawyers do not have a clue how bankruptcy works. We are here to help you from start to finish and help you move forward with a fresh start in life. We know the laws, how to fill out all the paperwork and what will be asked of you on the record. We are there for you always.

CONTACT US TODAY

Eraser Law is here to make it easy for you to meet with us. We know your time is just as precious as our time. We have seven metro locations and we are just as willing to meet via Zoom or a phone call.

We offer a free consultation and we’ll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

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