Award-Winning Minnesota Bankruptcy Lawyers
Thousands of honest, hardworking Minnesotans find themselves unable to meet their financial obligations each year. Fortunately, for some people struggling to make payments for credit cards, personal loans, or medical bills, bankruptcy provides an option to reorganize or eliminate at least some of what they owe.
At Nicolet Law Office, our bankruptcy attorneys are dedicated to helping those in debt improve their situation and regain solid financial footing. With over 100 years of combined legal experience, we have served clients facing home foreclosure, wage garnishment, separation or divorce, and substantial credit card debt. We know that a lot goes into the decision to file for bankruptcy, so we will work tirelessly to guide you to financial recovery.
Approachable Minnesota Bankruptcy Attorneys
For many years, people have talked about bankruptcy as if it represents rock bottom. Those who talk about bankruptcy in this way often have one thing in common—they don’t know what bankruptcy actually is. The reality is that bankruptcy is designed to offer a fresh start to those who fall into financial hardship in the wake of unforeseen circumstances.
Whether someone lived beyond their means, suffered a personal injury, or recently went through a divorce, the experienced attorneys at Nicolet Law Office are prepared to help our clients:
- Stop creditor harassment
- Prevent wage garnishment
- Protect vehicles
- Defend homes
- Eliminate unsecured debt
While we recognize that bankruptcy does have some consequences—such as depressing a debtor’s credit score—its consequences are not permanent. Moreover, they are often outweighed by the relief that bankruptcy can provide. As long as individuals continue to make financially responsible decisions before and after filing, they can reach a point where it will be as though they never filed for bankruptcy at all.
Bankruptcy Chapters Explained
There are four paths available to individuals filing bankruptcy: Chapters 7, 11, 12, and 13. While Chapter 7 and Chapter 13 are the most common types of bankruptcy filed by individuals, Chapters 11 and 12 can serve as a lifeline for those who qualify.
Chapter 7: Also known as “liquidation” or “straight” bankruptcy, Chapter 7 is the most common type of bankruptcy filed by individuals. Filing under Chapter 7 allows debtors to discharge most, if not all, of their debt in as little as three months. In 2019, approximately 62 percent of bankruptcy petitions were filed under Chapter 7.
Chapter 11: Though typically filed by corporations, individuals with substantial debts and assets may also qualify for Chapter 11 bankruptcy. Chapter 11 is most frequently used by individuals whose debts exceed the limits set for Chapter 13 bankruptcy, which are determined based on the consumer price index.
Chapter 12: Designed to support family farmers and fishermen, Chapter 12 is limited to an individual or married couple with a farming or commercial fishing operation. Chapter 12 bankruptcy provides debtors the opportunity to create a three-to-five-year plan for repaying their debts.
Chapter 13: If someone does not qualify for Chapter 7, they may be able to consolidate and reorganize their debt under Chapter 13. Also known as “wage earner” bankruptcy, Chapter 13 provides individuals with steady income the opportunity to develop an extended repayment plan.
If you are considering bankruptcy, an experienced attorney can help you evaluate your options and choose one that best suits your circumstances.
The Chapter 7 “Means Test” Made Simple
While it may be the most common individual bankruptcy filing, Chapter 7 isn’t right for every situation. For example, those with especially high incomes and significant assets simply are not eligible for this type of bankruptcy. The “means test,” which was established by Congress in 2005, is a formula used to determine whether an individual’s income, expenses, and family size qualify them for debt relief under Chapter 7.
The first part of the means test involves comparing a debtor’s income to their state’s median income for a similarly sized household. If the debtor’s income is less than the median, they automatically qualify for Chapter 7. If an individual’s income is greater than the median, however, he or she must complete the next phase of the test.
For the second step of the means test, the debtor will evaluate their financial situation to determine their disposable income. If that amount is considered too low to afford debt payments, the debtor passes the means test and may be eligible for Chapter 7. Individuals who do not pass the means test may still be eligible to file under Chapter 13.
At Nicolet Law Office, we’ve seen that the means test can be a headache for those in financial distress. We are committed to helping our clients decide which type of bankruptcy is right for their situation, so that they can continue on their path toward financial stability.
Common Bankruptcy Myths and Misconceptions
Although many people associate bankruptcy with failure, this presumption could not be further from the truth. In fact, most of the reasons behind our clients’ bankruptcy filings include factors outside of their control. Designed to alleviate the burden of debt repayment for individuals who may be experiencing unforeseen circumstances, we like to think of bankruptcy as the first step toward building a stronger financial future.
Many of our clients wonder whether they will lose their property if they choose to file bankruptcy. Thankfully, this is not the case, and those considering bankruptcy can rest assured that most of their essential property will be safe from repossession or liquidation. Even those who file under Chapter 7 (“liquidation” bankruptcy) can keep exempted property, including a primary home, retirement savings, and a functioning car.
Another common concern is that someone filing bankruptcy cannot afford to hire a bankruptcy attorney. At Nicolet Law Office, we have staked our reputation on providing high-quality, affordable legal representation to clients in all financial situations. Initial consultations are free, and we also offer flexible payment plans and flat fees.
Additionally, our experience has shown us how invaluable a skilled attorney is to those navigating the bankruptcy process. When someone trusts us with their case, we can help them evaluate their unique situation and determine which option best suits their circumstances. Furthermore, we will work tirelessly to help all of our bankruptcy clients protect their assets while eliminating their debt.
Contact a Compassionate Bankruptcy Attorney Today
Large medical or credit card bills, repossessions, foreclosures, and debt collection harassment will not go away without you taking appropriate action. Contact us today so we can help get you started on the path to financial freedom. We offer free initial consultations, payment plans, and flat-fee bankruptcies.