A Bankruptcy And Debt Relief Law Firm In Hibbing, Minnesota
Bankruptcy By The Numbers
Bankruptcy is a legal process whereby an individual or company struggling to repay debts petitions to have those debts discharged. The proceeding usually begins with a request filed to a bankruptcy judge who will assign a caseworker, or “trustee,” to assess the validity of your claim. If a person’s bankruptcy claim is accepted by the court, and the terms of the agreement honored by the debtor, all remaining debts will be eliminated or discharged.
Common reasons for filing for bankruptcy include:
- Home foreclosure
- Inability to pay bills
- Mounting medical bills
- Substantial credit card debt
- Wage garnishment
While there are many commonalities among bankruptcy filers, each person’s individual circumstances are unique—with each case requiring careful consideration. Outcomes vary widely with similar types of cases because of the number of variables at play. And because no two peoples’ financial histories are the same, there is unfortunately no “playbook” to which debtors can refer.
The bankruptcy process was designed to offer relief to those struggling to repay their debts, but that relief comes at a cost. Debtors should seriously consider the impact bankruptcy could have on their lives and that of those around them. A trusted bankruptcy attorney can help guide you toward the right decision for you and your family, providing you invaluable insights along the way.
Dischargeable Debts V. Non-Forgivable Debts
When someone seeks to discharge debts through bankruptcy, he or she should take note that not all types of debt can be eliminated. Unsecured consumer debts like credit card balances, medical bills, and personal loans can oftentimes be discharged. On the other hand, debts to government agencies like student loans and back taxes, as well as child support payments and alimony, are examples of non-forgivable debts.
A seasoned bankruptcy attorney can help you discern which of your debt obligations may be eliminated through bankruptcy. Furthermore, he or she should be able to recommend an appropriate “chapter” of bankruptcy for your unique financial situation. Individuals have the option of filing under Chapter 7 or Chapter 13 of the bankruptcy code.
Chapter 7 Essentials
Chapter 7 bankruptcy works by discharging debts in exchange for the debtor agreeing to surrender certain non-exempt assets—things like investments, second homes, and valuables—to offset a portion of the balance owed. In a word, a person’s superfluous assets are liquidated in order to pay back his or her creditors. This is why Chapter 7 is often referred to as “liquidation” bankruptcy.
Many people think filing under Chapter 7 means they will lose everything—their house, their car. However, a seasoned attorney can help protect a person’s cherished assets and simultaneously put an end to debt collection harassment. Oftentimes, debtors are surprised to discover that they can still do things like apply for credit cards and refinance car loans following a bankruptcy ruling.
Common reasons for filing under Chapter 7:
- Inability to keep up with monthly bills
- Large amounts of unsecured debt
- Debt collection harassment
- Home foreclosure
Many of those who pursue Chapter 7 bankruptcy are often disappointed to learn their claims have been denied due to a failure to meet strict income eligibility requirements. As a rule of thumb, a debtor must be unable to pay off least 25 percent of his or her total debt load within five years in order to qualify. If a debtor makes too much money or has alternative means to settling a debt or debts, he or she may find Chapter 13 to be a more viable alternative.
Chapter 13 Basics
In contrast to the above-mentioned liquidation scenario, Chapter 13 bankruptcy involves consolidating and restructuring a person’s debt into a more manageable repayment plan. For this reason, Chapter 13 is commonly referred to as “reorganization” bankruptcy.
Instead of selling off a debtor’s assets in order to repay creditors, a court-appointed trustee will examine the debtor’s finances and develop a customized repayment plan whereby all debts are combined into a single lump sum which can be paid down over the course of three to five years. Once the terms of the agreement have been satisfied, any remaining unpaid debts will be discharged or eliminated.
Plus, this arrangement has the added benefit of leveraging only a person’s disposable income, meaning he or she will still be able to pay essential bills, provide for his or her families, and retain possession of valuable assets like homes and vehicles.
The Nicolet Experience
Since 2007, Nicolet Law Office, S.C., has staked its reputation on providing exceptional service and trusted guidance to bankruptcy clients experiencing financial hardship. Our team of compassionate, local attorneys is here to offer you and your family peace of mind during these uncertain times.
What our attorneys can do for you:
- Eliminate wage garnishment
- Halt vehicle repossession
- Prevent debt collection harassment
- Stop home foreclosure
Before you submit your bankruptcy claim, it is imperative that you fully understand the options available to you, and how the bankruptcy process will impact you and your loved ones. Consider consulting with experienced bankruptcy attorney today. He or she can help you make sense of this complicated filing process and empower you to make the most informed decisions possible.
Nicolet Law Office, S.C. In Hibbing, Minnesota
In Hibbing, Nicolet Law Office, S.C. is conveniently located at: 302 E Howard Street, Suite 123. Our offices expanded into Hibbing so that we could share our model of trusted, tailored, and affordable legal representation with the residents of Saint Louis County and eastern Minnesota at large. The people we serve aren’t just our clients—they are our neighbors. We pride ourselves on providing trusted service with a neighborly touch. Drop us a line or drop in to see us sometime—we would love to hear from you.
Reach A Compassionate Bankruptcy Attorney Today
If you or a loved one is struggling with debt and don’t know where to turn, consider visiting with a trusted attorney from Nicolet Law Office. At our firm, initial consultations are always free of charge, and are happy to meet you in-person, via telephone, or through teleconferencing.