Divorce and Bankruptcy

Divorce is painful and can leave us in financial ruins. We are often clouded with emotion and are unable to make sound financial decisions that will protect us.

Make sure to hire someone who is thinking practically and not emotionally. If filing for bankruptcy is necessary, than proper means must be taken to make sure your debts are dischargeable. Divorce is ugly. Hurting the other party is also ugly. Your best means of protection is protecting yourself, your assets, and relieve yourself of shared debts.

 Call us today for a consultation.

Child Support Is Not Dischargeable

Child support is NOT dischargeable in any type of bankruptcy. The welfare of minor children is of primary importance throughout the state and federal court system.

But you still can get some benefit from declaring bankruptcy. Although you cannot erase child support payments, if you file for Chapter 7 protection and most of your other debts are erased, your budget will include new extra cash, which will make it easier for you to make your scheduled support payments on time.

Even choosing a Chapter 13 wage earner plan will lower your monthly payments to creditors, leaving you with more available cash to meet your support commitments.

Hiding From Debt Won't Make It Go Away.

Ignoring or evading your financial troubles will only make them worse. Nobody-ever-forgets-a-debt. Especially not creditors. If you are facing legal action do not procrastinate.

Often, even when people are in danger of foreclosure or car repossession, or are being sued, or are having their wages garnished – even then, they do not want to think about filing bankruptcy. It is very painful to think of filing bankruptcy – especially before the person understands bankruptcy.

In most cases, once bankruptcy options are explained by an experienced attorney, people are greatly relieved to find that their problems can be resolved after all. Do not wait until after your house is foreclosed, your car is repossessed, or your wages are being garnished. Find out what bankruptcy relief is available to you sooner rather than later.

Debt Loves Company

Debt doesn’t just consume one person at a time, in the event there is a co-debtor, (and several of your debts include co-debtors). Also known as co-signors, the people who sign with you on a debt are often family members and the closest friends you have.

By signing a legal document guaranteeing that your debt would be paid, the co-debtor is now in a precarious situation as you file for bankruptcy.

If your goal is to wipe out as much of your debt as possible, as quickly as possible, Chapter 7 would be a good choice. However, under Chapter 7, co-debtors are not protected. If you receive a Chapter 7 discharge, you would no longer have any legal responsibility to repay the debt that was also signed by your co-debtor. But creditors would then be able to collect from the co-debtor.

The only way to protect a co-debtor is to file a Chapter 13 repayment plan, although that virtually guarantees a 60-month schedule to pay your disposable income, after necessary expenses, to your creditors.

Can I File For Bankruptcy More Than Once?

Did you know that you can file bankruptcy more than once? Sometimes, we find ourselves in the hole again through circumstances beyond our control. There are options if you should find yourself in need of debt relief.




There are two common types of bankruptcy, Chapter 7 and Chapter 13. You are able to file more than once under each type of bankruptcy, however federal laws set into place in 2005 have made it more difficult. While there is no limit to how often you can refile, filing too closely together can be a waste of time if you would like your debt discharged.






If you initially filed for Chapter 7 bankruptcy (which eliminates most debt) in 2005 you will be eligible to file Chapter 7 again in 2013. Part of the criteria is that you wait at least 8 years between filing. However, if your second filing is for Chapter 13 (which restructures debt), you only have to wait 4 years rather than 8. The time periods between filings are measured from filing date to filing date and not the date your debt was discharged.

What’s the difference between Chapter 7, 11 and 13 of the Bankruptcy Code?

...A commonly asked question. Commonly asked because many are truly unaware of the differences between the two.


Chapter 7.



Chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets.




Chapter 13


Chapter 13 issues a payment plan to repay some debts, with the rest of the permitted debts being discharged. Keep in mind, not all tax debts are able to be discharged in bankruptcy, but taxes that are eligible to be discharged in a Chapter 7 are also eligible for discharge in Chapter 13. When you file for bankruptcy, your tax debts must meet a certain standard in order to be discharged.




If you file for Chapter 13 bankruptcy, money owed to the IRS that does not meet the qualifications to be discharged can be repaid through a payment plan that lasts anywhere between three and five years without penalties or continuing interest. (Although in some cases interest and penalties must be paid if there is a tax lien).




One of the benefits of filing a Chapter 13 bankruptcy is if the IRS rejected your previous payment plan, this is a way to get them to accept one.


Chapter 11


Debtors should be aware that there are several alternatives to chapter 7 and 13 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.




It is recommended that you speak with your attorney regarding this matter before deciding between filing Chapter 7 or Chapter 13 to get rid of or aid with the burden of tax debt.




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

Can Tax Debts Be Simply Eliminated Through Filing For Bankruptcy?

There are many ads on the TV and radio that claim tax debts can simply be eliminated through filing for bankruptcy. Unfortunately, this is not always true.

Income tax debts are able to be discharged in Chapter 7 bankruptcy if all of the following is true:

• All tax returns for the tax debt you're seeking to discharged must have been filed at least two years before filing for bankruptcy.
• The tax debt must have been due at least three years prior to filing your bankruptcy petition. 
• You must have filed a return for the tax at least two years prior to filing your bankruptcy petition. 
• The income tax debt has to have been assessed by the IRS a minimum of 240 days prior to filing your bankruptcy petition. 
• If a fraudulent tax return was filed or you attempted to evade paying the taxes by, for example, using a false Social Security number, bankruptcy won't be able to eliminate this debt. 

Certain events like a prior bankruptcy or an offer-in-compromise with the IRS can toll (stop) the running of these time periods. There are entire books written on how to interpret the rules for discharging a debt in bankruptcy. Be sure to obtain competent advice.

Unfortunately, even if you qualify to have your tax debt eliminated, your bankruptcy will not rid you of prior tax liens. If the IRS placed a lien on your property before bankruptcy was filed, the lien remains. This requires the debtor to satisfy the balance before they are able to sell the property. If the tax lien does not attach to any property, the IRS may abate (remove) the lien.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.

Tips For Maximizing Your Budget During The Holiday Season

Thanksgiving kicks off the start of the holiday season, which also happens to be the season in which we spend the most. You may feel like it's difficult to avoid going into debt during this time, but here are some tips that will help you save money.

• Calculate a budget and stick to it. No one wants to enter the holiday season already over budget with maxed out credit cards and buyers remorse.
• Rather than sending out holiday cards, email your Thanksgiving greeting to friends and family. You will save money on postage and printing costs. 
• If you've been designated to host Thanksgiving this year, let family and friends know that you're starting a new potluck tradition. This will alleviate the cost of putting on an entire meal for everyone. This also saves time and allows you to truly perfect one dish. 
• Keep your holiday decorations simple and minimal. This will give you something to be thankful for once you open your credit card statement without the added expense. 
• Shop at wholesale stores for staple items, this can amount to hefty savings. Also, purchase generic brands when possible.
• Minimize side dishes. If you know that the cranberry sauce is barely touched each year, skip it. 
• If you're flying out of town for the holiday, choosing the right day and time to fly can save you money. Often times, flying very early on a Tuesday or Wednesday results in the lowest fares. 

Have a happy Thanksgiving! Contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 if you would like more information about your bankruptcy options.

Successful People Who Have Filed For Bankruptcy

Many people have a negative connotation associated with filing for bankruptcy. That thought needs to be dispelled. Bankruptcy protection was included in our Constitution to offer relief to debtors and to provide them the opportunity for a fresh start. Bankruptcy should be considered a new beginning for your family.

Many successful people have filed for bankruptcy, only to come back better than ever. A great example is Walt Disney. Because he received a fresh start, he was able to create the Disney empire we all know today. Other examples include Donald Trump's business, Mark Twain, Thomas Jefferson, Abraham Lincoln, Henry Ford, the founders of Hershey's Chocolate and Heinz Ketchup.

Dealing with the stress and emotional strain of creditors while struggling to make ends meet can take a serious toll on your health. Your daily pressures can leave you with negative emotions because of the state of your finances. Filing for bankruptcy is a step in gaining control of your life. Bankruptcy is a positive means to financial stability, and your emotional and physical health. Contact Minnesota Bankruptcy Attorney Gregory J. Wald for more information on giving your family a new beginning.

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

Speak With A Bankruptcy Attorney About A Hardship Discharge

Filing for Chapter 13 gives people with a source of income the choice of devising a plan to repay some of their debt when they're experiencing a financial hardship. This is why Chapter 13 is also known as the "wage earner's plan."

In the instance that you've already filed for Chapter 13 bankruptcy, yet you are still experiencing a financial hardship, there are options. If you find yourself in this predicament do not simply stop making payments to your trustee. Once you do that you can expect your bankruptcy case to be dismissed without discharge.

Don't ignore your problem. Speak with your bankruptcy attorney about a Hardship Discharge. This type of discharge will clear debts and give you a fresh start, even though your repayment plan has not been completed.

This option is available to you if:

• The failure to complete your repayment plan was due to circumstances beyond your control. 
• Your creditors received at least what they would have gotten out of a Chapter 7 liquidation case. 
• Modification of your plan isn't possible. For example, you sustained an injury or illness that prevents adequate employment that would finance a modified plan. 

Hardship Discharges do not apply to any debts that are non-dischargeable, so it's much more limiting than a Chapter 13 bankruptcy. There are many facets to a Hardship Discharge which is why it is important to speak to your bankruptcy attorney.

Do not feel trapped by your finances. You do have options for dealing with your debt. Contact Minnesota bankruptcy attorney Gregory Wald at 952-921-5802. He will go over your Chapter 13 case and give you all the best options specific to your situation.

You Must Take A Credit Counseling Course Before Filing For Bankruptcy

Before a debtor can file for bankruptcy, they must take a credit counseling course beforehand and then a financial management course before the discharge can be granted. This requirement has been in effect since 2005, when the bankruptcy code was revised. These courses are intended to educate debtors and to aid in positive financial management.

Once the course became a necessity for filing for bankruptcy and receiving a discharge, people were under the impression that obtaining bankruptcy protection became more difficult. It's really just a matter of knowing what steps to take beforehand to ensure a successful outcome.

The credit counseling course must be completed within 180 day pror to the filing of the bankruptcy petition. Be wary of just any course, not all are approved by the bankruptcy courts. Your attorney can present you a list of approved agencies to consider. Once the initial course is finished you will have to complete a financial management course after filing for bankruptcy. A certificate of completion of the second course must be filed within 45 days after the meeting of the creditors takes place. This will ensure that your discharge will go through as scheduled.

The courses may appear as just another hoop to jump through in the filing process, but many debtors that have completed it feel it was worth the undertaking in assisting them with planning a successful financial future.

Contact Minnesota Bankruptcy Attorney Gregory Wald at 952-921-5802 for information on which credit counseling agency to choose. Attorney Wald will go over the steps required to begin your bankruptcy case in order to achieve the best possible result.

Set Yourself Up For Success After Bankruptcy

Now that you've successfully discharged or restructured your debts in bankruptcy, it's time to think about your financial future. Here are some important steps to take to ensure your success:

• Compile a list of any debts that were discharged in bankruptcy. Certain debts such as student loans, child support, spousal support, and some types of taxes are not eliminated in bankruptcy cases. Be sure to pay any debts that were not discharged in a timely fashion to keep your finances in good standing.
• Keep all of your bankruptcy papers in a safe place. In the event that a creditor mistakenly attempts to collect a discharged debt, you will have proof that it was included in your bankruptcy. If you happen to lose your discharge order, another copy can be obtained from the clerk of bankruptcy court.
• Keep an eye on your credit reports after your bankruptcy. Make sure that your credit report reflects your discharged debts as having a zero balance. According to a recent government study, one in five consumers have an error in a credit report issued by a major agency.
• Since most types of liens survive bankruptcy discharges, verify the balance on any liens you may have. Know how much you owe and continue making payments on time if you wish to keep the secured property. If you fail to do so, your creditors may enforce the lien.
• Set aside money for an emergency fund. It is important to have enough money saved in case situations arise such as a job loss, car repairs, medical expenses, or other emergencies. Experts recommend having enough money saved to cover at least three months of expenses.
• Create a realistic budget. Refrain from buying things that you can't afford, or need -- Especially when it comes to using credit. Try to use cash for your purchases when possible. Don't succumb to the high interest credit card offers that you'll be getting in the mail after your bankruptcy, because there will be plenty of offers.

Setting yourself up for success after bankruptcy is important so that you don't fall into old bad habits. For more information on bankruptcy and life after, contact Minnesota Bankruptcy Attorney Gregory Wald today at 1-866-747-1130.

Common Bankruptcy Myths

Everyone will know that I filed for bankruptcy...
While filing for bankruptcy is a matter of public record, people generally won't find this information unless they are looking for it.

All of my debts will be wiped out in Chapter 7 bankruptcy...
Sadly, not every debt is able to be discharged. Non-dischargeable debts include, but are not limited to: child support, some types of taxes, student loans (unless there is "undue hardship"), and debts incurred fraudulently.

I will lose everything that I have...
There are exemptions put into place to protect parts of your life. Exemptions are laws that specify amounts and types of property that you can keep from creditors. Some of the most common exemptions are for your car, clothing, your house, household goods, and money in qualified retirement plans. The majority of people who file bankruptcy don't lose anything.

I'll never have good credit again... 
You can begin to rebuild your credit simply by paying the bills on time. You can also apply for a secured credit card. The best way to build good credit is to use only 10 percent of your available credit. Keeping your debt to income ration low is best.

I will have to file bankruptcy with my spouse...
It's not always necessary for spouses to file bankruptcy together, but it could be in your best interest. If you and your spouse share many of the debts, it's better to file together. However, if only one spouse is responsible for most of the debt, it may be better for just that spouse to file. Your bankruptcy attorney will help you determine this.

I don't want to include all of my creditors in my bankruptcy...
When filing for bankruptcy, all creditors must be listed. However, you can pay any creditor you wish after you file bankruptcy, even though you may not be legally required to do so. For instance, you can continue to make payments on a car loan or a mortgage in order to keep the car or the house.

I can only file bankruptcy once...
While there are limitations, you may file more than once. Chapter 7 bankruptcy can be filed once every 8 years. Chapter 13 bankruptcy can be filed every 2 years. If you filed Chapter 7 bankruptcy the first time and would like to file for chapter 13 next, 4 years must pass between filings. If you filed Chapter 13 first and want to file Chapter 7 next, 6 years must pass between filings.

I can max out all of my credit cards before I file for bankruptcy...
This would be considered fraudulent and may jeopardize your dischargeability. It's best to stop using your credit cards if you think that you may need to file bankruptcy.

I have to have a certain amount of debt before I can file...
There is no minimum amount of debt a person must have to file for bankruptcy. If the debt is beyond your ability to repay, you can file for bankruptcy if it's the best choice for your financial situation.

You should always consult and work with an experienced attorney when filing for bankruptcy. If you have any questions surrounding these common myths regarding filing for bankruptcy, contact Minnesota bankruptcy attorney Gregory Wald at (952) 921-5802.

Bankruptcy The Second Time Around

If you have already filed for bankruptcy and you find yourself struggling with debt again, you may be eligible to file for bankruptcy a second time -- if certain criteria are met.

There are two main types of bankruptcy, Chapter 7 and Chapter 13. You are able to file more than once under each type of bankruptcy, however federal laws set into place in 2005 have made it more difficult. While there is no limit to how often you can refile, filing too closely together can be a waste of time if you would like your debt discharged.

If you initially filed for Chapter 7 bankruptcy (which eliminates most debt) in 2005 you will be eligible to file Chapter 7 again in 2013. Part of the criteria is that you wait at least 8 years between filing. However, if your second filing is for Chapter 13 (which restructures debt), you only have to wait 4 years rather than 8. The time periods between filings are measured from filing date to filing date and not the date your debt was discharged.

If your first filing was Chapter 13, you only have to wait 2 years before filing for Chapter 13 again. If you plan on your second filing being Chapter 7 this time, then 6 years must pass between filings.

There are exceptions to these time periods. If you are considering filing bankruptcy for the second time, contact Minnesota Bankruptcy Attorney Gregory Wald for more information.