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The Minnesota Bankruptcy Filing Process

 

The Initial Consultation
Reasons To Delay Filing
Preparing The Petition
Documents Your Lawyer Will Need
Final Review Before Filing
Meeting of Creditors
Debtor Education Requirement
Bankruptcy Discharge

 

The Initial Consultation

To get started the first thing to do is call me. I talk on the phone for free, and I will be glad to discuss your situation with you. The next step is to make an appointment for a consultation in my office in Minnetonka, Minnesota. Most of the time I will charge a small consultation fee for the first meeting in my office, but if you hire me to represent you I will apply the consult fee to my fee for filing the case. When you come in to the office for the first meeting, I would like you to bring my questionnaire which you can download here and fill out in pen and ink before you come. There is really no substitute for a face to face meeting. When you come in I will try to figure out for sure if you qualify for a Chapter 7 or 13, and I should be able to warn you of any problems or red flags I foresee encountering if we go ahead with the process. Assuming you decide that you want to get started, we will go over my retainer agreement - which is the contract under which you hire me to represent you - and I will give you a list of information I will need when you come in to actually start work on the case.

 

Reasons To Delay Filing

The most common reason to delay filing is the situation where today you don't qualify because your income is too high, but looking down the road we can see that this will be changing soon. The following are two more reasons, created by the recent "reform" legislation, for waiting a few weeks or even months before filing the case:

 

1.  Debts for purchases of luxury goods or services - say for a trip to Tahiti - are considered non-dischargeable. BUT, any consumer debt for goods and services owed to a single creditor in excess of $550 incurred within 90 days of filing is presumed to be for luxury items. So if you have a credit card where you have run up more than $600 of debt for the purchase of groceries or anything else within the past three months, this could be an invitation for an objection to your discharge even though it was not really any kind of a luxury purchase. If facts like this exist, filing should usually be delayed if possible.

 

2.  Cash advances in excess of $875 made within 70 days of filing are presumed non-dischargeable. When I see this sort of thing, my advice is usually that the time for filing is not right now.

 

If you have repaid a debt to a close relative, any such payments made within the year before filing can be recovered by the bankruptcy trustee. This could be a reason to delay, especially if the payments were almost a year ago but not quite.

 

Preparing The Petition

The next step is to go to work on the actual petition. Plan on at least three sessions in my office of about an hour and a half duration. There should be a more efficient way of doing it, but I haven't found it. It seems to me that if you don't take the proper time, there's a lot more risk. The petition is a document that runs about 45 pages and contains about a thousand questions, all of which must be answered carefully and truthfully. The rule here is to make full disclosure. When you sign this document, it is under penalty of perjury. I have never been comfortable doing it any other way than going through the whole thing line by line. I have top-of-the-line software for preparing the petition. This is necessary because some of the forms contain complicated calculations based on U.S. Census data or IRS data. What I do with my clients is sit down with the computer monitor turned where they can see it and start going through the questions one at at time.

 

Documents Your Lawyer Will Need

The list of what I may ask you to bring to me can vary quite a bit from case to case. Typically, however, I will be asking you to bring me at least the following:

 

1.  Pay check stubs for all employment income during the past seven months.

 

2.  Your state, federal and property tax returns for the past two calendar years.

 

3.  Statements for all of your bank accounts for the past seven months.

 

4.  Recent statements for your mortgages, home equity loans and automobile loans. 

 

5.  A list of all your debts along with a stack of your most recently received bills for each one.

 

6.  A copy of the deed to your home and copies of deeds to any other real estate you may own.

 

7.  Paperwork on any legal action which is currently pending or which ended in the past two years.

 

8.  A recent credit report for yourself. The best place to get such a report is http://www.annualcreditreport.com.

 

9.  A credit counseling certificate from a qualified agency. This counseling, however, is usually one of the last things I will ask you to do before we file; and I prefer that you let me refer you to a provider that I know and trust.

 

Final Review Before Filing

The case is begun by filing the petition with the bankruptcy court. Before I can do that, my clients must review the entire petition and tell me that it meets with their approval. Errors are often found and corrected at this time. Information is updated. Forgotten creditors are added. Then when my client gives me the final go-ahead, I fill the petition along with a few incidental accompanying documents with the court.

 

Meeting of Creditors

As we go through the process you will hear me making various references to things that will be happening at the hearing, things you will be asked at that time, what to bring and how to prepare. What I call the "hearing" is technically called the "meeting of creditors." It is also sometimes called the 341 meeting after the relevant section of the statute. It is presided over not by a judge but by a trustee. The trustee's powers are similar to those of a judge, so if you want to think of him or her as a judge that's OK. You, me and all the creditors will be sent a notice of this hearing, which you can expect to take place about one month after we file. These hearings are usually scheduled in batches of six or so at intervals of half an hour. For example, a batch of them will be scheduled for 9:30 am, and then another group of them at 10:00 am. To stay on schedule the trustee may be very abrupt and short, so don't be offended by that. Often when there is a difficult case the trustee will get really behind, and the wait can get pretty long. If that happens we can take advantage of the opportunity to watch other hearings ahead of ours, which may give us an idea of the trustee's mood and favorite questions. Although the creditors are invited, they seldom show up. If they do come they are allowed to ask questions, but in most cases this is a waste of their time.

 

Debtor Education Requirement

Before you can be discharged you have to complete a course of "debtor education" and provide me with a certificate of completion. You do this through the same agencies that provide that pre-bankruptcy counseling. Many of them offer their programs over the phone or internet. Completing this is an absolute requirement for bankruptcy discharge. The certificate is due at the court two weeks prior to discharge. If not filed before the date of the scheduled discharge, the entire case is dismissed. If this happens, you won't be allowed to file for another eight years, and you won't get back any assets that have been taken by the trustee.

 

Bankruptcy Discharge

This is our goal. After successfully completing all the steps, and any extra requirements that the trustee might add, you receive a discharge. This is a document which is usually issued about 90 days after a Chapter 7 case is filed. In Chapter 13 the discharge is issued after all the payments in the plan are made. The discharge is a court order which says that all the debts which are dischargeable are gone.

 

The case may stay open for some time after the discharge, particularly if the trustee has found some assets that need to be administered. In most simple cases, however, from my point of view when we get the discharge we are done.

 

Bankruptcy Lawyer across from RidgedaleKelly Law Office
11900 Wayzata Blvd. #116E
Minneapolis, Minnesota 55305
Phone: (952) 544-6356
Fax: (952) 525-7924
Mobile: (612) 735-3797
Email:
dave@mn-bankruptcy.com