Student Loans in Bankruptcy

In order to eliminate student loans in bankruptcy, it is necessary to sue the lender and prove that it would be an "undue hardship" to be required to repay the loan.  The courts have interpreted this requirement stringently, making it difficult for most borrowers to eliminate their student loans in bankruptcy.  

In March 2015, President Obama directed the US Department of Education and other federal agencies to develop clear standards as to when a person would be considered to have an undue hardship.  This would be beneficial, because people who met such standards could file their lawsuit and not have to worry that it would be opposed.  This would significantly decrease the cost of bringing a lawsuit to prove undue hardship and many deserving people could then eliminate their debts through bankruptcy.  Unfortunately, the US Department of Education forgot who they are working for and instead gave the green light to student loan lenders to aggressively fight student loan hardship discharges.  I urge everyone to let their Congressmen and Senators know how they feel about this.

What’s New About Getting a Mortgage After Bankruptcy

The waiting period for obtaining an FHA or VA mortgage is two years after you receive your Chapter 7 bankruptcy discharge.  It normally takes about three months to get your discharge after we file your bankruptcy petition with the court.  However, there is a new rule that allows you to obtain an FHA or VA mortgage as little as 12 months after you receive your discharge, if you can show that the bankruptcy was caused by extenuating circumstances beyond your control and if you have since exhibited a documented ability to manage your financial affairs in a responsible manner.  

For Chapter 13 bankruptcy, it is possible to obtain an FHA mortgage after you have made one year of timely payments under your bankruptcy payment plan.  You must also have permission to enter into the mortgage loan from the bankruptcy court.

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. 

Can a Person Filing Bankruptcy Exclude Debts They Want to Pay?

I am often asked whether a person filing bankruptcy can exclude debts that they want to pay.  When you file a bankruptcy petition, you must give the court a complete list of your debts.  You are not allowed to leave anything off.  However, it is possible to repay debts that you have listed in your bankruptcy.  You might not be required to repay the debt, but you still can pay it voluntarily if you wish.  For instance, if you have a car loan or home mortgage, you can continue to pay these debts in order to keep your home or car.  If you have a debt to a relative, you can repay them what ever is left owing to them after you complete your bankruptcy case.   Occasionally, a creditor might request that you sign a "reaffirmation agreement".  A reaffirmation agreement is an agreement that you will not discharge (eliminate) a debt in your bankruptcy case and that you will be legally bound to pay it. Your attorney can help you decide if a reaffirmation agreement is a good idea.

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.

How To Handle Enormous Debt Load Right After Receiving Your College Degree.

More than ever, young adults are being saddled with an enormous amount of debt right after they earn their college degree. They spend the rest of their twenties giving a sizable portion back to the University who just won a bowl game and is hardly hurting for cash. Meanwhile, you're a twenty something lawyer who passed the Bar exam, works for a prestigious firm, yet you eat Ramen and take the bus and duck your landlord at the end of the month. That's no way to enter the workforce--straddled with debt.


More young adults are filing for bankruptcy than ever. There is a stigma and almost a shame that comes with it, but there needn't be. Think of bankruptcy less a retreat and more a reset. Yes, it will reflect on your credit report and yes it will complicate your financial future at least for the next seven years. "So why would I want that?" You ask...
Here's the alternative. Continue on eking it out. Giving most of your pay to your wealthy college who's degree you might not even be using! Take the bus. Go broke trying to impress clients by paying for your meals only to find your wages have been garnished and your card doesn't work.
You can expect that for much longer than seven years if you don't file for bankruptcy. You don't want to have to play that game where you act like: "it's the banks fault" in front of potential clients. You know good and well there was a fifty-fifty chance your card would work, which is why you only ordered salad and water. You cringed when the potential clients ordered swordfish and champagne. And then came the coup de grâce? Potential client #1 liked the swordfish so much he wants a second to go. For his dog! Your mental cash register just exploded. You know what's coming. Epic embarrassment. You see it on the waiter as his or her demeanor has now changed. They have your card in their hand and a single, short, stubby receipt. We all know what that is. The rejection letter of debit machines. Just like when you got into college. Thin envelope meant: "Sorry! Try again!". Thick envelope meant :"Pack your bags".
Don't get another thin envelope or short receipt. Get your affairs in order. What you handle today will greatly behoove you tomorrow. We will get creditors off your back and allow you to entertain those potential clients without fear of embarrassment.

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

The Problems That Occur When Filing Bankruptcy Without An Attorney

WHAT HAPPENS AFTER I FILE FOR BANKRUPTCY?

Filing for bankruptcy can be a daunting and emotionally draining experience. Going it alone will only make the task even more monumental. It doesn't have to be so bleak though. Sometimes in life we need a reboot, if you will. Many of great financiers, moguls, and millionaires alike have filed for bankruptcy. As well have average salary earners, college students, contract holders et al. The point is, at one time or another many of us have been "in over our heads".

Once you file the petition there are a number of documents you must submit to the court and your Trustee within specific time frames. Failure to comply may cause your case to be dismissed. Unfortunately, if you file without an attorney, there is no one who will tell you what has to be filed and when. Which is why whenever dealing with anything above parking ticket a lawyer is your best course of action.

The Bankruptcy Court sends out a notice of your bankruptcy filing to all of the creditors listed in your schedules. This notice advises the creditors that you have filed for protection, which chapter you filed and advises them that an "automatic stay" is in effect, preventing creditors from pursuing any further efforts to collect the debt. This would include staying a foreclosure sale, wage garnishment, and even a civil court proceeding or trial. Criminal cases are not stayed, nor are child support hearings.

For more information regarding bankruptcy, chapters, filing, or simply answering any questions you may have, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.

Failing To Complete A Credit Counseling Course Can Ruin Your Bankruptcy Case

Did you know that failing to complete credit counseling can ruin your case? In both Chapter 7 and Chapter 13 bankruptcy, credit counseling is required. One course must be completed within 180 days before your case is filed and another must be completed before the case can be discharged.

As a rule of thumb, it's best to have the second course completed prior to the meeting of creditors. This is approximately one month after filing. If this course is not completed, it is possible to have your discharge refused.

You can find a list U.S. Trustee approved credit counseling agencies here: http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm

There are some exemptions from this requirement limited to people who are mentally ill, disabled, or on military duty in an active combat zone.

For more information regarding credit counseling courses, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802.

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

Once Bankruptcy Is Filed, The Trustee Will Look Into The Past 90 Days Of Spending To See If You Attempted To Defraud The System

Tis the season for giving... and racking up debt. If you're planning on filing bankruptcy after the holidays you'll want to avoid these common mistakes, it could seriously jeopardize your bankruptcy.

We all get into the holiday spirit of gift giving while failing to think of ourselves. Draining your checking account, without setting any funds aside is a huge mistake. Bankruptcy fees must be paid for in cash, not a credit card, so it's imperative that money is set aside to give you the fresh start your finances so desperately need.

Do not go on a shopping spree compliments of your credit card before filing for bankruptcy. If it looks like you were "loading up" on credit cards without intending to repay them, you might have to repay at least a portion of the funds that you borrrowed.

Never give away your assets as gifts this holiday season, or ever if you're planning on filing for bankruptcy. If you give a gift to a relative that is worth $200 or more, the trustee of your bankruptcy case may demand the return of the gift so that it can be sold and the funds distributed to creditors. In some cases, charitable contributions can also be reversed. Giving away significant assets to avoid losing them in bankruptcy is considered fraudulent. Your debts might not be eliminated in bankruptcy if you attempt this.

For answers to questions regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com to set up a consultation.

Receive Bankruptcy Protection Protection From Creditors

We offer immediate protection from creditors upon filing your bankruptcy petition. When we file a bankruptcy petition with the court, it creates a blanket court order called an "automatic stay" against creditor collection efforts. All collection efforts will cease. We stop harassing calls from collection agencies. We can stop repossession of your car and in some cases we can obtain the return of repossessed vehicles. We can stop foreclosure to give you time to get caught up on payments. Stop the worry and the stress now.

For more information regarding bankruptcy protection, contact Bloomington Bankruptcy Attorney Gregory J. Wald at 952-921-5802.

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.

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.

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.

Student Loans and Bankruptcy

In today’s society many students are faced with the uncertainty of landing a job right after graduation--in addition to that, students are weighed down by student loan debt. There is an option if you find yourself having difficulty paying back your student loan. Chapter 13, also known as “The Wage Earner’s Plan,” develops a plan for you to pay back debt over a period of time.

Most Bankruptcy courts rely on a test called “The Brunner Test,” in order to determine whether a student loan is dischargeable in bankruptcy. However, in Minnesota the less restrictive "totality of the circumstances" test is used. The way the courts evaluate the loan’s dischargeability comes down to whether you have shown “an undue hardship.” The “totality of the circumstances” test requires that the debtor not be able to maintain the minimal standard of living if forced to repay the loans. The court can look at all relevant considerations, including:

(1) your past and present financial resources, and those that you can reasonably rely on for the future;


(2) your reasonably necessary living expenses for you and the your dependents; and

(3) “any other relevant facts and circumstances surrounding each particular bankruptcy case

It helps to get a hardship discharge if you have tried to make payments on the student loans. If you or your children have chronic medical problems or mental health problems, this will be taken into consideration.

Once you file for bankruptcy, you are automatically protected against creditors. They can’t collect from you until the courts give them permission to do so.

There is an idea that higher education leads to financial success, however most people will feel the economic strain for years to come.

After filing for Chapter 13 bankruptcy, you will have a plan for repayment. Usually repayment is based on current and future income. A Chapter 13 plan is for 3 to 5 years. For help with a Chapter 13 bankruptcy plan, consult Minnesota Bankruptcy Attorney Gregory J. Wald.