Tuesday, December 18, 2012

Don't Let The Holidays Jeopardize Your Bankruptcy

If your New Year's resolution is to file for bankruptcy, there are some steps you should take to prevent your debt from not being discharged.

One of the greatest mistakes that people make during the holidays is over spending. It's very easy to become wrapped up in the season of giving, however your trustee won't appreciate the sentiment if you're gifting your assets to friends and relatives. Once you file for bankruptcy the trustee will look for any assets that were transferred, whether it was money or property. You risk your bankruptcy case being dismissed if it's perceived that any assets were gifted to defraud the bankruptcy system.

If bankruptcy is on the horizon, chop up those credit cards. Even if you have available credit you should refrain from using it. When you file for bankruptcy the credit card companies will review the past 90 days to see if you used your credit cards without making an effort to pay for the items bought. If you purchased holiday gifts with your credit cards and made no attempt to pay off the debt, that debt may be considered non-dischargeable. The same goes for taking out a cash advance within 70 days of your bankruptcy. It can also be presumed to be non-dischargeable if no attempt was made to repay the loan.

Filing for bankruptcy is complex. Before making any holiday purchases that could jeopardize your bankruptcy dischargeablity, have a consultation with Minnesota Bankruptcy Attorney Gregory Wald.

Wednesday, December 5, 2012

The Benefits of Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows people with an income the option of creating a plan to repay part, or all of their debt when they are experiencing hardship. This is why it’s known as the “Wage Earner’s Plan.” When filing for Chapter 13, the debtor has agreed to a repayment plan of their debts over a course of three-to-five years.

In the instance that you have filled for Chapter 13 Bankruptcy and are still experiencing financial hardship, you have options. The worse thing you can do would be to stop making payments to your trustee. Once payments stop being made, you can expect your bankruptcy case to be dismissed without discharge. This means that all of the debt and harassing phone calls from creditors that you received before you filed for bankruptcy will once again be back.

Rather than stopping your payments, speak to your Minnesota bankruptcy attorney about a Hardship Discharge. A Hardship Discharge wipes debts clean even though the repayment plan has not been completed.

This option is only available if:
  • The debtor’s failure to complete their payment plan was due to circumstances beyond their control. 
  • The creditors have received at least as much as they would have in a Chapter 7 liquidation case.
  • Modification of the plan is not possible. As an example, you could have an injury or illness that prevents sufficient employment that would fund a modified plan. 
Hardship Discharges are a lot more limited than a typical Chapter 13 discharge and it does not apply to debts that are non-dischargeable. Do not ignore your financial situation any longer. Contact Minnesota Bankruptcy Attorney Gregory Wald, he will give you all of your options. Live free from worry by removing the burden of debt.