What is bankruptcy and will it wipe out all of my debts?

Bankruptcy is the legal process in which a judge and court trustee examine a person or business’ assets and liabilities who are insolvent and decide whether to discharge their debts, which makes them no longer legally required to pay them. There are certain debts that might not be discharged in bankruptcy, such as tax liens, student loans, back child support, and debts obtained through fraud.

What are the main differences between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 bankruptcy discharges debts while Chapter 13 reorganizes them, meaning that with Chapter 13, people make ongoing payments for several years according to a plan. Chapter 7 bankruptcy filers do not make ongoing debt payments. Businesses cannot file under Chapter 13. Chapter 7 bankruptcy is for people with limited incomes and people who do not pass the means test cannot file this type of bankruptcy.

Which bankruptcy option will allow me to keep my property?

Chapter 13 does not liquidate assets like Chapter 7 does so you can keep all your property with a Chapter 13 filing. If you file for Chapter 7, some of your property may be exempt and will not be taken. Exempt property may include a portion of equity in your home, pensions, motor vehicles (up to a certain value), tools for your profession, reasonably necessary clothing, furnishings and household goods, household appliances and jewelry.

Can I choose which type of bankruptcy to file? How do I choose the right one?

You may be eligible for more than one type of bankruptcy. In this case, you can select the form that is best suited to your situation. Which type of bankruptcy you should file will depend on a variety of factors, including what type of debt you have, what type of relief you need, if you are interested in keeping certain property and what exemptions you qualify for. An experienced bankruptcy lawyer like Sam Calvert can discuss your options and make a recommendation based on your particular situation.

What happens if I do not disclose all of my assets when I file for bankruptcy?

It is important that you disclose all of your assets to your bankruptcy lawyer and in your bankruptcy petition. Failing to disclose assets can result in serious consequences, including a dismissal of your case, a refusal to discharge debt, liquidation of the asset and charges of bankruptcy fraud.

Subd. 26.Health savings accounts; medical savings accounts.

By Sam Calvert, Attorney At Law | Nov 20, 2019

In 2018 the Minnesota legislature added an exemption to state law to protect health savings accounts (“HSA”) and medical savings accounts (MSA) up to $25,000.00 from creditors, other than divorce court/child support orders.

The new law, effective August 1, 2018 says that the following is exempt:

(a) All money held in a health savings account, as defined in the Internal Revenue Code of 1986, section 223(d), as amended, up to a present value of $25,000.

(b) All money held in a medical savings account, as defined in the Internal Revenue Code of 1986, section 220(d)(1), as amended, up to a present value of $25,000.

Judge Michael Ridgway recently issued an opinion that summarizes how to "avoid" judgment liens in bankruptcy. The case is In re Mus, case number 17-42895.

By Sam Calvert, Attorney At Law | Nov 19, 2019

A little background: Most real estate in Greater Minnesota is "abstract property". In Hennepin and Ramsey much of the land is "Registered property", a/k/a "Torrens property". For this post I will ignore Torrens property. When a judgment is entered and docketed in District Court, the judgment becomes a lien on all abstract property in that county. The lien does not "attach" to property which is homestead property under state law; however, there is no way to determine if a piece of land is homestead or non-homestead. So, practically, a judgment is an apparent lien on any real estate you may…

IS BANKRUPTCY A BAD THING?

By Sam Calvert, Attorney At Law | Dec 27, 2018

You will often hear that “bankruptcy is bad”, or that “bankruptcy is a forever mistake”. It is likely that the people who say bankruptcy is bad don’t understand the process. Each bankruptcy case is a little different, and people chose bankruptcy for many different reasons, most of which are beyond their control. Certainly, filing bankruptcy is not something to take lightly, but Congress created the bankruptcy law to help people get a fresh start on their finances. Medical bills are often cited as causing a large percentage of bankruptcies. For many people, unexpectedly losing a job puts them into a financial tailspin.…