Bankruptcy Frequently Asked Questions
Your Top Rated Local® Edina Bankruptcy Law Firm
Are you considering filing for bankruptcy? Or interested in learning more about debt relief? The team at MLG Legal can help. Our experienced bankruptcy and debt relief attorneys are on your side. We are dedicated to providing our clients with quality legal representation and advice so that you can make the best decision for your individual situation.
Here, you’ll find a list of some of the most commonly asked questions we hear from clients and potential clients about debt relief and bankruptcy. Read on to learn more and if you have any more questions or would like to discuss your debt relief options, schedule a consultation with MLG Legal today.
Bankruptcy Basics FAQs
Bankruptcy is a legal process which allows individuals or businesses to seek relief from some or all of their debts that they are unable to repay. Bankruptcy can discharge certain types of debts. This allows the person or business filing to move forward with a clean slate without being held back by old debts. Filing for bankruptcy also helps to stop collection calls, repossessions, foreclosures, and other collection activity.
There are several different types of bankruptcy including Chapter 7, Chapter 11, and Chapter 13. If you are considering bankruptcy, our Edina attorneys can help you to decide which type of bankruptcy is right for you or your business.
There are several types of bankruptcy, the most popular types being: Chapter 7, Chapter 11, and Chapter 13.
Chapter 7 bankruptcy is also known as liquidation bankruptcy. It is usually used as a type of consumer bankruptcy and requires the individual filing to meet certain income and asset requirements.
Chapter 11 bankruptcy is also known as reorganizational bankruptcy. It is commonly utilized by businesses because it allows them to continue operations while they file for bankruptcy. Chapter 11 requires the business to restructure their debt. It also allows the business to be sold during the bankruptcy process free and clear of all claims, liens, and other potential liability.
Chapter 13 bankruptcy is often utilized by individuals. When a person does not meet the income and asset requirements to file for a Chapter 7, they often consider Chapter 13. This type of bankruptcy requires the individual to repay some of their debts over a 3–5 year period. Once the repayment period is over, the rest of their unsecured debt is eliminated tax-free.
While it is possible to file for bankruptcy without a lawyer, we don’t recommend attempting this. Bankruptcy is a legal process and it is in your best interest to have an experienced and knowledgeable bankruptcy attorney by your side.
At MLG Legal, our lawyers can help you decide if bankruptcy is right for you, and if so, which type will help you to achieve the desired results. We highly recommended speaking to a bankruptcy attorney before filing any paperwork.
Bankruptcy can help you move forward in a positive direction without being held back by old debt. However, bankruptcy isn’t always the right choice for everyone. There are other debt relief solutions available to you such as refinancing and loan modifications. The bankruptcy attorneys at MLG Legal can help you determine if bankruptcy is the right path for you, or if another debt relief option may be preferable.
Bankruptcy Process FAQs
The cost of your bankruptcy depends on three factors.
- Do you own a business?
- Do you own “extra” assets that may not be protected in the bankruptcy?
- What type of bankruptcy are you filing?
The easiest way to learn how much it will cost you to file is by contacting our Edina bankruptcy law firm and discussing these details.
Chapter 7 bankruptcy is what most people prefer to file. It is the most affordable option and also the fastest. However, not everyone qualifies for a chapter 7. There are two main hurdles you have to get over. First, there is an income limit to qualify. Second, there is also a limit on the value of your assets. Exceeding either will require you to file for a chapter 13 bankruptcy.
Chapter 13 bankruptcy is for people who exceed the income or assets limits of a chapter 7 filing, or for those who want to save a specific asset such as a home, car, or something else.
Chapter 7 and chapter 13 bankruptcy filings follow similar paths. MLG Legal discusses your options, collects documents from you, files with the court, and attends a mandatory court appearance about one month after the filing.
From this point, the paths change.
With a chapter 7 bankruptcy, you wait about two months after the court appearance to receive the court order that clears away your debt.
With a chapter 13 bankruptcy, in the first month, you begin making regular monthly payments toward your debt. The length of these repayments takes between three to five years depending on your situation.
Working directly with an experienced bankruptcy attorney is the best way to plan for and move forward with a bankruptcy filing. Your attorney will require documents such as pay stubs, vehicle title(s), tax returns, and others. You will also need to take an online credit counseling course. Reach out now and MLG Legal will get you started.
Personal Bankruptcy FAQs
Maybe. If you want to keep your house and can afford to make regular monthly mortgage payments after filing for bankruptcy, then YES, you can keep the house. Remember, you must continue to pay taxes, insurance, utilities, upkeep, etc. Be sure to factor all of this into your monthly costs.
Sometimes people also own additional homes or properties such as a cabin, hunting land, timeshare, retirement home, burial plots, etc. If your name is listed as the owner of more than one property, you will need to carefully examine your bankruptcy options with an experienced attorney.
Maybe. If you want to keep your car and can afford to make the regular monthly car loan payments after you file for bankruptcy, then YES, you can keep your car.
Sometimes people own additional vehicles or collector cars — either fully owned or still requiring loan payments. Protecting these assets requires careful consultation with an experienced bankruptcy attorney.
It depends. If you are financially engaged with a person, then yes they will know that you are filing for bankruptcy. Otherwise, not necessarily. A not-named person in the filing would have to scour the legal notices in specific county newspapers that publish the notices. Or, they would need to have access to the bankruptcy court’s online filing system. It is rare for anyone other than an attorney to have access to the online system.
If you do owe money to your neighbors, family members, or others, they will need to be listed on your bankruptcy filing and notified.
If you are a co-debtor with a business partner, family member, or other people, they will need to be listed on your bankruptcy filing and notified.
If you do co-own property with someone, they will need to be listed on your bankruptcy filing and notified.
MLG Legal can file your bankruptcy case rapidly. We move at the speed of our clients and their situation. Some people need a fast bankruptcy filing due to pressing court dates, lurking debt collectors, upcoming sheriff’s sales, etc. Others want to take time to explore debt relief options. Both situations are understandable, acceptable and workable.
Business Bankruptcy FAQs
Perhaps. If you intend to begin a new business down the road, you should address this with an experienced bankruptcy attorney before you begin to file.
The type of bankruptcy that you file, Chapter 7 or Chapter 11, will determine how it will affect your business. Chapter 11 bankruptcy is commonly used for partnerships and corporations who wish to continue operating. You may even be able to secure financing that allows you to continue operations. During a Chapter 11 bankruptcy, you are able to restructure your debt in a way that will allow you to pay back your creditors. If you choose to sell your business during the bankruptcy process, you may be able to do so clear and free of all liens, claims, and other liability.
After you’ve filed for a Chapter 11 bankruptcy, your business will be required to continue to make payments on the debt that has been restructured. Your repayment period will last from 3–5 years. You will also be responsible to make payments on any financing that you obtained during the bankruptcy process separately from this repayment plan.
There are two types of bankruptcy that a business can file: Chapter 7 and Chapter 11.
Chapter 7 bankruptcy, or liquidation bankruptcy, is sometimes ideal for those whose business is a sole proprietorship and the business does not own any substantial assets.
Chapter 11 bankruptcy, or reorganization bankruptcy, is more common for larger businesses. This allows the business to continue operations as they restructure their debt in a way that makes it possible to pay it off.
If you are unsure of which type of bankruptcy is best for your business, the team at MLG Legal can help. Contact our experienced debt relief and bankruptcy attorneys today to schedule a consultation to learn more.
This depends on which type of bankruptcy your business is filing for. If you are filing a Chapter 7 bankruptcy, it is unlikely that you will be able to keep your business operating.
If you would like to keep your business open, a Chapter 11 bankruptcy may be the better path. This type of bankruptcy allows you to restructure your debt while remaining in operation.
Credit After Bankruptcy FAQs
Yes, you will get credit cards again. Most clients are surprised to receive dozens of credit card offers right after they file for bankruptcy. These companies want you to sign up for their cards because you have already filed for bankruptcy and therefore can’t file again for several years. This means any debt you acquire with a new card cannot be removed for multiple years. Also, you technically have no other debt because the majority of it was cleared away in bankruptcy.
Be warned, these cards typically offer horrible interest rates and high fees. Ideally, you should wait to apply for a credit card until better offers arrive — typically about two to three months.
In terms of vehicle loans, most clients qualify for decent terms about nine months to one year after filing.
In terms of home loans, most clients qualify for standard home financing about three years after filing for bankruptcy.
Initially after filing for bankruptcy, your credit score will go down, but then it will go up. The amount your credit score goes down can vary, but most people see a drop of 75–100 points. Down the road, people commonly see an increase in their credit score. This is due to the fact that they can’t file for bankruptcy again for a number of years and are, therefore, obligated to pay off new debts.
Bankruptcy will vary from person to person and business to business. As a general rule, debts that are not discharged can include child support, alimony, taxes, student loans, fines owed to the government, and others.
If you are unsure of which of your debts are eligible for discharge through a bankruptcy filing, the bankruptcy attorneys at MLG Legal can help. Schedule a consultation with us today.
How to Avoid Bankruptcy FAQs
For some, bankruptcy can be the only option. However, for others, there may be other debt relief solutions. While we can’t give you a one-size-fits-all answer here, if you believe that you have debt relief options available to you that will allow you to avoid filing for bankruptcy, you should explore those first with the help of an experienced debt relief attorney.
While bankruptcy may be the right path for some, it isn’t the right option for everyone. The sooner you speak to an attorney, the more likely it will be that a debt relief solution is available to you. You can schedule a consultation with the bankruptcy and debt relief attorneys at MLG Legal where we can discuss all of your options.
There are both positive and negative effects that happen when you file for bankruptcy. When you file, creditors will stop contacting you and repossessions and foreclosures will come to a halt. The process of filing for bankruptcy will allow you to either liquidate, repay, or reorganize your debt so that you can find a positive path forward and leave your financial troubles in the past.
However, filing for bankruptcy may also mean that you could lose some property and assets. This, of course, depends on which type of bankruptcy you file, as well as your individual situation.
Your bankruptcy will also go on your credit report. This will affect your interest rates for some time into the future, as well as your eligibility for some loans.
Overall, bankruptcy has some positive effects and some negative. It’s essential to consider how filing will affect you in the short-term and long-term before making a decision.
The answer to this will depend largely on your individual situation. What a debt relief lawyer can do is discuss your options.
At MLG Legal, our debt relief attorneys will take the time to thoroughly understand your situation and your goals so that we can make the best recommendation for your specific circumstance. If debt relief options are a plausible solution for you, we will be happy to guide you through the process, and if bankruptcy is your best option, we are here to help with that as well.
If you are having financial difficulties and would like to avoid bankruptcy, you’ll want to look into other debt relief solutions. These options can include one or a combination of the following:
- Debt settlement
- Debt consolidation
- Interest Rate Negotiation
- Loan and Mortgage Modification
- Lease negotiations
Debt Relief FAQs
This is another question that does not have a one-size-fits-all answer. Your situation will dictate which solution is best for you.
However, one piece of advice we can give you here is that if you are aware that you are struggling financially, the sooner you speak to a debt relief attorney, the better. The earlier that we can assess your situation, the more likely it is that you have more than just one option open to you. While we do work with clients in all stages of the bankruptcy or debt relief process, a successful outcome is more likely for clients who include us sooner rather than later.
There are different types of debt relief solutions that address varying types of debt. For instance, a mortgage modification would address your mortgage, while debt consolidation may be ideal for handling credit card debt.
At MLG Legal, we have years of experience under our belts handling debt relief. We know the ins and outs of every type of debt relief solution and have extensive experience in negotiating with creditors. When you hire our law team to be on your side, we’ll know exactly how to address each type of debt and creditors will know that you mean business.
Debt relief solutions such as loan modification, lease negotiations, and refinancing may help some clients avoid bankruptcy. The idea with debt relief is to address the problem before bankruptcy becomes your only option.
Debt relief solutions are there to help you avoid a larger financial plight which can only be solved by filing for bankruptcy. To learn whether or not debt relief can help you avoid bankruptcy, schedule a consultation with MLG Legal today.
For those who are having financial difficulties but are not ready to file for bankruptcy, there are several debt relief solutions that may help you to get your finances back on track.
Debt relief solutions can include:
- Loan modification
- Mortgage modification
- Lease negotiations
- Debt settlement
- Debt consolidation
MLG Legal – Your Edina Bankruptcy Lawyer
Are you considering filing for bankruptcy or interested in learning more about which types of debt relief solutions may be available to you? The team of debt relief and bankruptcy attorneys at MLG Legal can help. We take the time to get to know each of our clients and your individual situation. This allows us to create a plan that is unique for you. Whether that includes lease negotiations, refinancing, or filing for bankruptcy, you can rest assured that you’ll have an experienced and knowledgeable lawyer on your side every step of the way. Contact our team of Edina attorneys today to get started with a consultation.