BANKRUPTCY LAW FIRM

LAWSUITS

Welcome to the Schreiber Law Office home page.  If you are a Minnesota resident experiencing problems with debt and considering bankruptcy, help is only a phone call away.  This office deals exclusively with consumer bankruptcy cases.

Evening and weekend appointments available

Chapter 7        Chapter 13         Future Credit         Disclaimer

STOP COLLECTION BY CREDITORS

One common concern is whether someone will lose any of their assets if they file bankruptcy. The Bankruptcy Code allows individuals to keep enough of their property to be able to obtain a fresh start after their case is filed. In most cases, this means individuals are able to keep all their property. [Home]

Chapter 7

A Chapter 7 bankruptcy, the more common of the two, is often referred to as a "straight bankruptcy." In this type of case, individuals are generally able to discharge their unsecured debts, which are debts without collateral. Secure debts such as a mortgage or car payment must continue to be made if the person desires to keep the property. Also, a Chapter 7 bankruptcy does not prohibit individuals from repaying discharged debts to friends or family members if they choose to do so. [Home]

Not all debts are discharged in a Chapter 7 bankruptcy. The most common debts that are "nondischargeable" include:

-Debts for spousal maintenance and child support
-Certain debts incurred through a divorce
-Most student loans
-Certain taxes owed to the IRS or State of Minnesota
-Debts for injury caused while driving under the influence of alcohol

Also, if a substantial amount of purchases are made on a credit card right before a Chapter 7 case is filed, it is possible that the creditor may bring an action to declare that credit card debt nondischargeable on the basis of fraud.

If you have a substantial amount of debt in any of these categories, the better alternative may be to file a Chapter 13 bankruptcy and make payment on these debts over the course of up to 5 years.[Home]

Chapter 13

A Chapter 13 "reorganization" bankruptcy is quite similar to a debt consolidation, with the exception that the payment in a Chapter 13 is usually much lower than the repayment in a non-bankruptcy consolidation. In a Chapter 13, individuals make a payment to the Chapter 13 Trustee, who in turn distributes the money to creditors according to the Chapter 13 plan. In most Chapter 13 cases, it is not required that the unsecured debts be paid in full. However, secured debts (such as mortgage arrears and car payments) and priority debts (such as taxes and child support) must be paid in full. The maximum length of a Chapter 13 plan is 5 years, and with a few exceptions, unsecured debts remaining after 5 years are discharged.

A Chapter 13 bankruptcy works well for people who are behind on secured debts. Chapter 13 allows for the deficiencies on these debts to be paid back at an affordable rate. The same theory applies to people who owe money for child support and taxes. These debts can be paid over the course of up to 5 years through Chapter 13, and government agencies such as the IRS and State of Minnesota are prevented from garnishing wages. Repayment is on your terms, not theirs. [Home]

Future Credit

Bankruptcies stay on credit records for 10 years. While having a bankruptcy on your credit record is not a positive mark, filing for bankruptcy does not make it impossible to obtain future credit. Simply look in the newspaper at the classified ads for car loans that say "Bad Credit, No Problem" and "Bankruptcy, No Problem." While it is still possible to get future credit after filing for bankruptcy, the downside is that individuals are charged with higher interest rates and/or higher downpayments. The general rule is the farther in the past your case was filed, the easier it is to obtain credit.

If a person who files for bankruptcy has previously defaulted on debts, their credit history is poor before their case is filed. In those situations, a bankruptcy’s impact on a credit rating is less severe. Surprisingly, some people’s credit is actually improved by a bankruptcy because the bankruptcy wipes a person’s credit slate clean. Some creditors look at recent bankruptcy filers as less of a credit risk because they do not have an obligation to their previous debts, and therefore have more money available to pay new creditors. [Home]

Disclaimer

This web site is intended for general information purposes only and is not meant to substitute for individual legal counsel on any specific problem. Due to the complicated nature of bankruptcy laws, the best way to understand how bankruptcy applies to your situation is to consult an attorney. [Home]

This office is a debt relief agency and helps people file for relief under the Bankruptcy Code