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 Is an Adversary Proceeding in Minnesota?
Once your case is filed, your creditors have the opportunity to object to you getting rid of (aka “discharging”) their debt. The creditor must have sufficient legal grounds to make this objection. Under the bankruptcy code section 523, a creditor can object to the discharge of its debt on the grounds that you did not intend to repay the debt. For any debt that you incurred within 70 days before the date you file for bankruptcy you are deemed by law not to have intended to repay the debt. Mike will advise you if you are at risk of having an adversary proceeding filed during your free consultation. Adversary proceedings are not common, but they do occur. If one of your lenders threatens an adversary proceeding, your options are as follows:
The creditor will likely file the lawsuit they are threatening and if you do not respond, the court will find in their favor by default and the debt owed to the lender will survive your bankruptcy (i.e., you will continue to be liable for it after the bankruptcy is over)
Attempt to Settle
Either with a lump sum or payment plan. We have had success negotiating 50% payment of the debt as settlement.
Dispute the Validity of Their Claim
Which likely would result in litigation. Litigation is lengthy, time-consuming, and beyond the flat fee bankruptcy retainer for every attorney practicing law. You might choose this option if you felt that the creditor is completely wrong that you incurred the debt without the intent to pay.
Again, adversaries are few and far between. But that is because most people consult an experienced bankruptcy attorney that can advise them the appropriate steps to take prior to filing their case to minimize the risk of an adversary proceeding. Call Mike to set up a free consultation.
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.