WHAT WILL MY FRIENDS AND RELATIVES THINK OF ME?

You might be worried about what friends and relatives will think of you if you file for bankruptcy protection.  You can relax.  Your friends and relatives want what is best for you.  For example, one of my clients was borrowing heavily from his parents in order to keep up with his credit card debt.  His brother suggested to him that it would be better to file bankruptcy and eliminate his credit card debt, instead of borrowing money from his parents that he might never be able to repay.  He filed a bankruptcy case and eliminated all of his credit card debt.  He didn't lose anything that he owned.  He had a lot of fears about bankruptcy that all turned out to be false. 

Many of my clients are referred to me by concerned friends and relatives.  I have had parents bring me their sons and daughters. I have had sons and daughters bring their parents. Sometimes its hard to see a solution when debt problems mount.  The worry and stress can paralyze you.  A concerned friend or relative can sometimes take a more detached view and help you see that there can be a reasonable solution.   Many times, the solution is bankruptcy. Don't let fear stop you from solving your debt problems.

An Attorney Is Is Abreast Of The Ever-Changing Bankruptcy Laws

There are a number of potential pitfalls and tricks in the ever-changing bankruptcy laws, so it is very important to consult with a knowledgeable bankruptcy attorney. If your case is filed wrong, it may be dismissed for not filing a required document and if you have to file a new case you may not be able to get the same protection from your creditors.

Attorney Wald is well-versed in the possible complications that might arise in what seems to be a simple and straightforward bankruptcy case, he is aware of recent changes in the law and of court decisions in the local courts; and usually find ways of making a bankruptcy case more productive and effective than it would be if the debtor tried to handle it without an attorney--ultimately saving the debtor many hundreds or thousands of dollars .

Co-signers and Bankruptcy

Bankruptcy provides a fresh start for many, but what happens when some of your secured debt, such as a vehicle, has a co-signer? If you are planning on filing for Chapter 7 bankruptcy, and in doing so surrendering secured property, you should understand that the protection of bankruptcy only covers the person filing, not the co-signing party.

Lets say that your sweet Granny Ann helped you to get a new car by co-signing on the loan with you. After a few years you realize that your auto loan payments are just too high and you are drowning in debt. When you decide to file for Chapter 7, even though you have surrendered the vehicle, sweet Granny Ann is still legally responsible for the remaining balance. However, if sweet Granny Ann also decides to file for Chapter 7 bankruptcy, she could then discharge her own legal responsibility for the remaining balance.

This is the reason that most married couples are urged to file a joint petition. However, if a married couple does not have any joint debt then it may not be necessary to file bankruptcy together. In Minnesota, you are not automatically liable for all of your spouse's debts, but you are responsible for your spouse's debts incurred during the marriage for necessities of life, including medical bills.

In a scenario where the person filing for bankruptcy is the co-signer on a debt, lets say it’s sweet Granny Ann and she co-signed with you on your car, she must still list the vehicle and debt in her bankruptcy. She would be able to explain on her schedule that the vehicle actually belongs to her grandchild and that her grandchild makes all of the payments. This typically does not affect the contract between the grandchild and the lender, this would just eliminate Granny Ann’s duty as a co-signer.

There are many complex circumstances and legal issues that can effect co-signers when filing for bankruptcy. Contact Minnesota bankruptcy Attorney Gregory J. Wald today if you have questions about this matter or would like to set up a consultation.

The Difference Between Secured and Unsecured Debt

The type of debt you have plays an important role in what happens if you default on a loan.

Secured Debt is any debt that is backed by some sort of physical property, such as a car loan or a mortgage. The car loan is secured by the car itself and the mortgage is secured by the home.

In the event you fall behind on your payments on a secured debt, your creditor has the right to take back the property (repossess), sell it and apply the proceeds to the debt that you owe. Additionally, you may still have a balance owed even after the sale of the item is applied to the debt.

Dealing with your secured debt in bankruptcy can be done one of two ways. The first way is by filing for Chapter 7 bankruptcy and returning the item so that you no longer have to make payments on it. The other option is to restructure your payments by filing for Chapter 13 bankruptcy and keeping the item. Either way, with any secured debt the creditor gets something in return.

Unsecured Debt is typically a debt you incur to obtain goods and services. It can be medical debt, a student loan, a credit card or a personal loan. Essentially, there is no collateral tied to the debt. With this type of debt the creditor won't be able to repossess the item you purchased but they are able to take legal action or garnish your wages to recover a balance owed.

Filing for bankruptcy can ease the burden of both secured and unsecured debt. Filing for bankruptcy may even help you keep your car, stop wage garnishments, and remove some or all of your debt. Contact Minnesota Bankruptcy Attorney Gregory Wald for more detailed information specific to your situation.

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.

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

If you are thinking about filing for bankruptcy, contacting an experienced attorney is your first step. Below we will list some differences between filing for chapter 7 and chapter 13 bankruptcy to give you an idea of what to expect.

When Chapter 7 Is Beneficial To You:

• Chapter 7 is known as the “fresh start bankruptcy” because it gives its recipients a fresh start.
• If you have little property other than basic necessities like furniture and clothing.
• If you have little or no money left over each month after paying for basic expenses, or if you are not even meeting your basic expenses.
• A benefit to filing for chapter 7 is that most unsecured debts can be discharged. A discharge means the debt is completely eliminated.
• The process of filing for chapter 7 is a rather quick one. You can receive your discharge in just a few months.
• Once you file, creditors can not contact you once the automatic stay is in effect or after debts have been discharged.
• Upon filing for chapter 7, repossessions, foreclosures, wage garnishments, and harassment all stops.
• A way to decide if you are qualified to file chapter 7 is by the “means test” and the completion of the required session with a credit counselor.

When Chapter 13 Is Beneficial To You:

• Chapter 13 is the adjustment of debts for someone with a regular income.
• If you have significant equity in a home or other property and you would like to keep it.
• When you have a regular income and can afford living expenses but cannot afford to keep up with scheduled payments of debts.
• An advantage to filing chapter 13 is being able to keep your property while spreading out past due payments of a period of 3 to 5 years.
• You make one monthly payment to your bankruptcy trustee and will have no contact with creditors during the protection period of 3 to 5 years.
• Any individual debtor whose unsecured debts are below $360,475 and whose secured debts are less than $1,081,400 is able to file under chapter 13 bankruptcy.

Rest assured that once you file for bankruptcy your quality of life will greatly improve. You will no longer face harassing phone calls from creditors and with the help of your attorney, you will be fit with a bankruptcy plan that will benefit you and your family. Get the fresh start that you deserve by contacting your Bankruptcy Attorney Gregory J. Wald.


Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com