Minneapolis, St. Paul Bankruptcy Lawyers at Lord & Faris Law Firm

Is Bankruptcy Right For You?

As a result of the current state of our US National economy, more and more people are considering a Chapter 7 bankruptcy as one of the options to help weather the storm. With the national unemployment rate presently hovering around 10% as of June 2011, compared to 7.00% in August of 2009, you are not alone in your struggles to keep your home running smoothly. When people find themselves unemployed, it has a rippling effect. Businesses will suffer at the drop in productivity, and because they have a larger selection of whom to hire, they will be able to pay less for the same openings than they would under different circumstances. When times are hard, it affects everyone.

There are basically 2 types of consumer bankruptcies- Chapter 13, and Chapter 7. Chapter 7 is the most common, and filed by those who have either lost their job, been through a recent divorce or simply find themselves with more unsecured debt than they can afford to pay. However, walking away from your responsibility is not always the answer. There are strict guidelines for those who are considering a Chapter 7 bankruptcy, and not everyone qualifies.

For instance, if you are struggling, but your income is still enough to create a reasonable budget, you may not fit into the formula prescribed by the Federal Bankruptcy Rules. Within one-hundred and eighty days before you file for Chapter 7, you must, by law, take a counseling session from an approved counseling agency, that will explain all the options available to those who are financially strapped. Proof of this counseling must be attached to the bankruptcy filing in order for you to be considered a viable candidate. If your income is significantly above the official poverty level, the court will consider alternative actions.

Bankruptcies should be filed in the Federal District where the individual lives; or where his business resides, and filed with the Office of Clerk in Federal Bankruptcy Court. Filings can be either joint, or individual, but either way only 1 application will be needed; and only 1 filing fee will be required. Whether to include a spouse will require legal analysis of all the facts before proceeding.

Some of the non-dischargeable assets would include:

• Child support
• Alimony
• Fines and some taxes
• Loans that were taken out with false information
• Student loans
• Mortgages

If you can come up with a proper budget, your home and your car may remain with you if you are current on those payments. The bankruptcy will simply give you some room to get back on your feet. Either way, it takes dedication and a commitment to altering your financial lifestyle, and the advice of professionals that have been there and done that before if you are going to emerge with the tools to get a new start. Once filed and accepted, you will not be able to file another bankruptcy for at least 8 years, and you will not be able to add any other debts to the discharge once submitted.

Before you suffer through another stressful day, or take and drastic steps towards correcting your situation, let us help you get the facts so that you can make a rational decision.

“We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.”