Bankruptcy FAQs

Bird, Jacobsen & Stevens represents clients in the area of bankruptcy in order to assist them in debt relief and obtaining a fresh start. We practice bankruptcy law in the state of Minnesota and assist our clients in seeking protection of their assets under the bankruptcy code. Understanding the basics of bankruptcy and the process involved can assist our clients greatly.

View general information regarding bankruptcy:

What is bankruptcy?

Bankruptcy is a legal proceeding in which a person who cannot pay his or her bills can get a fresh start by discharging debts. The filing of a bankruptcy immediately stops most of your creditors from taking any legal action against you while you are in your bankruptcy case.

What bankruptcy can do for you

  • Eliminate the legal obligation to pay most or all of your debts including credit card and medical debt
  • Obtain a fresh financial start
  • Stop wage garnishment, debt collection efforts and similar creditor actions to collect a debt
  • Stop foreclosure on your house and allow you the opportunity to catch up on missed payments

What bankruptcy will not eliminate

  • Money owed for child support or alimony
  • Debts not listed on your bankruptcy petition
  • Student loans
  • Mortgages and other liens not paid in the bankruptcy case
  • Most tax obligations

Pre-filing and pre-discharge education courses

In order to be eligible to file a bankruptcy you must receive a Certificate of Counseling from an approved counseling agency prior to the filing of your case. The certificate is valid for 180 days and must be filed with the court along with your petition.

After the filing of your bankruptcy petition, you must receive a Certificate of Debtor Education from an approved counseling agency and have it filed with the court. In order for you to get a discharge of your debts, the certificate must be filed with the court prior to your discharge date.

What chapter of bankruptcy is right for you

Chapter 7 is a liquidation of your debt. It is generally the quickest and easiest form of bankruptcy. It is available to individual, married couples, corporations and partnerships. Most Chapter 7 cases are "no-asset" cases. This means that all of your assets are protected by the appropriate exemption and there is nothing left over for the trustee to take or sell.

Chapter 13 is a repayment plan of your debts over a 3-5 year span. Rather than eliminating your debts immediately, this option will allow you to reorganize your debt. The proposed payment plan must provide for the payment of all priority claims, such as taxes, in full.

The chapter of bankruptcy that you qualify for is based on a six-month average of your total household income and the size of your household. Basically, if you are above the median income, you qualify for a Chapter 13 and if you are below the median income, you qualify for a Chapter 7.

Accurate advice from a qualified bankruptcy attorney will help you understand your financial situation better. We offer a no fee/no obligation consultation so you can make an informed decision about your financial future. Please contact us today.