Minneapolis Bankruptcy And Debt Relief Lawyers
Minnesota Bankruptcy Statistics
There have been over 115,000 bankruptcy filings in the state of Minnesota within the last decade. Following the 2008 financial crisis, the number of individual bankruptcy claims skyrocketed as the economy came to a standstill and unemployment numbers soared. However, the number of bankruptcy filings in Minnesota experienced a period of steady decline until 2019, at which point the number of claims increased by 1.5 percent—the first such increase in over six years.
While the proverbial jury is still out on what long-term economic figures will look like in the wake of the coronavirus pandemic, Minnesotans are already experiencing job loss and financial constraints at a rate not seen since the last recession. For those with substantial debt who suddenly find themselves without the means to repay their creditors, bankruptcy may be the best option given the current state of affairs. Continue reading to learn if pursuing individual bankruptcy makes sense for your unique financial obstacles.
What It Means To File For Individual Bankruptcy
While many people balk at the mere mention of the word “bankruptcy,” the process itself was designed to alleviate the burden of debt repayment for those experiencing unforeseen circumstances. Think of it as a chance to hit the reset button or an opportunity to wipe the slate clean with regard to insurmountable debts. Many debtors decide to file for individual bankruptcy following developments that prevent them from repaying their creditors.
These situations may include, but are not limited to:
- Home foreclosure
- Identity theft
- Medical bills
- Personal injury
- Predatory lending
- Separation or divorce
- Wage garnishment
With claims becoming more common across the state, Minnesotans should not feel bashful about considering bankruptcy as an option, especially if they have no other viable alternatives for settling their debts. On the other hand, one should seriously consider how the bankruptcy filing process and any resulting outcomes may affect a person’s future, or that of his or her loved ones.
Bankruptcy works by discharging a person’s debts, either by consolidating and restructuring the debt load, or by selling off certain nonexempt assets as a form of repayment. No matter how their debts are settled—either through asset liquidation or extended repayment—filers can anticipate a period of reduced creditworthiness following a favorable bankruptcy judgment. This means securing a mortgage and other activities dependent on a person’s credit history may become difficult. Nonetheless, a person’s credit can easily be repaired with the proper guidance.
Identifying Forgivable Debts
Determining whether bankruptcy is right for a particular person’s unique financial situation involves assessing which among his or her debts are dischargeable. While not every type of debt can be forgiven, most unsecured debts not requiring collateral backing can typically be eliminated through individual bankruptcy. Conversely, secured debts like car loans and mortgages cannot usually be eliminated, although the terms of these loan agreements may be amended.
A licensed bankruptcy attorney can outline which of a filer’s debts can be eliminated and which can be restructured. Moreover, a savvy bankruptcy attorney can identify assets like primary residences and vehicles that can be protected through exemptions. Based on the filer’s particular situation, an attorney can also recommend the appropriate chapter of individual bankruptcy, or with which the filer might have the most favorable outcome.
Chapter 7: Liquidation Bankruptcy With Protections
The process of filing for bankruptcy under Chapter 7 requires applicants to surrender unnecessary physical and financial assets to offset a portion of their debts. Examples of these items include vacation homes, exotic cars, and liquid investments. Typically, assets like a person’s primary home and vehicle are exempt as long as the court deems them essential.
Oftentimes, Chapter 7 bankruptcies result in “no-asset” cases, meaning the debtor has no high-value assets worth liquidating. In these instances, an experienced attorney can often help a debtor permanently discharge his or her debts without a debtor losing his or her personal property. This is especially common for debtors who are also experiencing job loss, or just simply find themselves overwhelmed by debt. By repossessing these peoples’ homes, vehicles, and assets, the court would only be causing further detriment—which is never the aim.
Chapter 13: Reorganization Bankruptcy For The Employed
Chapter 13, or “reorganization” bankruptcy, works by consolidating a person’s many debts into a single lump sum and extending the duration of repayment, making it easier for debtors to catch up on missed or defaulted payments. It also allows debtors to renegotiate interest rates and loan agreements on some secured debts, so that more of a person’s money goes toward a loan’s principal balance. Chapter 13 bankruptcy is most commonly filed by debtors with a steady source of income.
After filing a petition with the bankruptcy court, debtors will be assigned a court-appointed trustee who will assess their finances and debt obligations before recommending approval of a payment arrangement that best serves the needs of both the debtor and his or her creditors. Ordinarily, debtors are given a period of three to five years to repay as much of their debt as possible, after which remaining debt balances are typically forgiven by the court.
A Good Attorney Can Make All The Difference
Individuals considering filing for bankruptcy need to first consult with a trusted bankruptcy lawyer. An attorney can make a world of difference in the outcome of a case, as they have the training to catch common mistakes and the ability to present a person’s case in the best possible light. Lawyers also have the power to stop collection calls, prevent asset liquidation, and halt home foreclosures. For the best possible outcomes, debtors should have representation.
Nicolet Law Office: A Compassionate Approach
The attorneys at Nicolet Law Office have proudly served bankruptcy clients in the greater Minneapolis-Saint Paul area since 2007. We pride ourselves on providing top-notch legal care with compassion. We understand your struggles and have helped countless people like you find relief. Rest assured that no matter what financial issues you struggle with, we will be behind you every step of the way and will remain available to answer your questions long after your case is settled.
Contact A Bankruptcy Attorney In Minneapolis Today
If you are experiencing financial hardship and are considering filing for individual bankruptcy, allow one of the knowledgeable attorneys at Nicolet Law Office to review your case. Our firm proudly offers prospective clients free initial consultations, providing individuals a risk-free opportunity to learn more about the legal options available to them.
To get started with your free initial consultation, call our Minneapolis office at 715-377-2141, or use our secure contact form to reach an attorney via private message. We are happy to consult you in-person, over the phone, or through video conferencing. Don’t delay—our attorneys are standing by to review your case today.