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.

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.

Understanding The Benefits Of Bankruptcy.

Many people are afraid of bankruptcy. The very word sends shivers down their spine. It’s the financial world’s scarlet “a”. That’s a general misconception held by many. Filing for bankruptcy is often times a beneficial experience when one is saddled with insurmountable death. People worry about it showing up on their credit report--and it will, but it is still better than nothing. Bankruptcy, with all of it’s taboo, is in fact doing something.




Having good credit after bankruptcy is possible, you could even obtain a good credit score within several years of your bankruptcy case being discharged. The first step is receiving the notification from the courts that all of your debt has been discharged. This form will be titled “Discharge of Debtor.” Keep this form in a safe place because you may need to show this to creditors as proof your debts are gone.




Review your credit reports and score closely and clear up any errors. Request your credit report from each of the three major credit agencies. Make sure that all of your debts are listed as “discharged.” and contact 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

Tax Debt Relief And Bankruptcy

If you have an income tax debt, and are filing for bankruptcy, that may be eligible for discharge under Chapter 7 or Chapter 13 of the Bankruptcy Code.

The difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy is that Chapter 7 allows for a full discharge of permitted debts while 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.

The criteria for income tax debt to be discharged are:

• All tax debt must be from income taxes 
• The tax debt must be part of a tax return that was due at least three years prior to the taxpayer filing for bankruptcy. The due date includes any extensions. 
• The tax return has to have been filed at least two before the taxpayer files for bankruptcy. This date starts when the return was actually filed. 
• The tax assessment that the IRS sent you has to be at least 240 days old. 
• The tax return cannot be fraudulent. 
• The taxpayer cannot be guilty of tax evasion. 

Some of the tax debt that is not dischargeable is for taxes for which no returns have been filed. While the IRS routinely assesses taxes on un-filed returns, these tax liabilities cannot be discharged until the taxpayer files a return for the year in question. The return must be filed by the taxpayer. A commissioner-filed return does not qualify.

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.

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

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.

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