A reaffirmation is an official way to “reobligate” yourself on the loan. This involves the lender sending us a reaffirmation contract to be signed by you.
What Are the Top Misconceptions About Bankruptcy in Minnesota?
The first misconception is that the bankruptcy laws are setup somehow to punish people for filing for bankruptcy. The belief is that the system Congress has set up works, where they will wipe out your debt or part of your debts, but in exchange you are going to lose all of your assets, including possibly losing your home and your job. And your credit will be destroyed. This is one hundred percent absolutely not true. The fact of the matter is this; the bankruptcy code is setup to give a person a fresh start. A fresh start is removing the over burdensome debt, allowing you to get back on your feet, allowing you to support yourself, your family, and hopefully contribute back to society.Congress really does not have any interest in taking your possessions, kicking you out of your home, and putting you on the street. If Congress did such a thing than you would become a burden on the state welfare system and there really is no point in doing such a thing. Bankruptcy is intended to be a safety net for people that need help.
The second big misconception out there is that the only people who file for bankruptcy are somehow reckless spenders, or irresponsible with money. That basically they are in that situation because they put themselves in that position, as if it is their own fault.
I have been practicing law since 2008, and have met with many different kinds of people. The great majority of those people are people who have carried debt for a while, and have made their payments, but then one of three things typically happens. Someone loses a job or their hours are cut, an unforeseen medical expense, or divorce. You will notice those three things are not personal characteristics. Those are external factors that can happen to anyone, no matter their financial situation. If financially and are able to make things work, but things are tight, and then one of those three things happens to you, you are put in an undesirable position to keep up financially. There is not enough income to address your necessary monthly expenses and to keep up with all payments.
There are several options available, but at the end of the day, if you do not have the income to meet your expenses, and also address the debt, then really, that is what bankruptcy is for. It is a safety net that could keep you from hitting rock bottom. You can get that fresh start, get back on your feet and move forward. Bankruptcy has changed over the years, but not too much.
If people stand back and look at the picture and the data from bankruptcy filings over the decades, what you really see is filings relatively low and then an economic downturn or recession hits, and the filings begin to spike. If you look at the data, and you realize after an economic downturn, people do not just decide let us be reckless spenders and run up our credit cards and then go file for bankruptcy. It is because people are losing their jobs mainly.
They cannot afford to pay all their bills, and they are faced with difficult decisions. They decide bankruptcy is the best way for them to get back to where they were. If you stand back and look at it and think about it, it is pretty clear to see that. The opinions about bankruptcy have changed a bit in our culture, but a lot of people still hold onto those myths. If you believe in these myths and these assumptions that bankruptcy is set up to basically ruin your life, you’ll never look into what it can really do for your financial future.
Do People Generally Procrastinate When It Comes To Filing For Bankruptcy?
People do procrastinate when it comes to bankruptcy. Bankruptcy is the last option, and it should be. It is a pretty difficult choice to make, and most people put off talking to anyone about it or looking into it until all other options have been exhausted. If you have other options available to you, by all means look into them, but you should honestly look at what bankruptcy will do for you early on, and decide if it is something you might want to do or need to do. Some other options that are out there involve pulling money out of retirement accounts, and other various things that you might not need to do. It could be counter-productive if you do not process them properly. When you file for bankruptcy, you must be aware of the bankruptcy laws in place.
At a minimum, keep all of your options open. But if you are facing a financial hardship, do not just automatically scratch bankruptcy off the list. Talk to somebody. My firm offers free consultations, pick up the phone, take thirty minutes out of your day and sit down with us and we can give you the lay of the land. We will discuss your case and apply your circumstances to the way the bankruptcy laws work so that you have a clear picture of what that would be. If you simply search online for articles, you may be reading about bankruptcy cases or rules that don’t apply in Minnesota. By meeting with a bankruptcy lawyer, you will get detailed advice about how your case would proceed and what you can expect for a bankruptcy in Minnesota.
You must file bankruptcy in the state where you reside. Filing bankruptcy in Minnesota is not necessarily the same as filing bankruptcy in Texas or Florida. In looking at articles from internet resources, you might be using information that might not apply to you. It makes sense to sit down with a Minnesota bankruptcy lawyer to make sure that you have information that is accurate and reliable for your circumstances.
For more information on Misconceptions about Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling today.
Chapter 13 is essentially a payment plan that you organize through the court system. Think of it as a consolidation loan with teeth.
There are 2 things you must do after your case is filed: (1) attend the meeting of creditors (aka the 341 hearing); and (2) complete a debtor’s education course via phone within 75 days from the date your case was filed. The 341 hearing is sometimes referred to as the meeting of creditors because your creditors can attend the meeting and ask you questions about the information contained in your petition.