Minneapolis Bankruptcy Law
Minneapolis bankruptcy laws
When you are in financial trouble and are considering filing for bankruptcy, you need the skilled bankruptcy lawyers at Sugar Creek Legal Services to help you navigate through the complex legal system. There are always changes to and new requirements for bankruptcy law in Minneapolis and nationwide.
Bankruptcy 101
The bankruptcy filing process became more complicated with the passing of The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005. It was created with the goal of preventing abusive bankruptcy filing practices. This law added several new requirements to the filing process:
- A "means test" is now required for Chapter 7 bankruptcy petitioners. The means test is a two-step process:
- 1) Comparison of the debtor's income to the median income in your home state. If your income is lower, the test ends with no presumption of abuse. You can file for Chapter 7 bankruptcy
- 2) If your income exceeds the median state income in this state, you may still qualify for a Chapter 7 bankruptcy, depending on your expenses
- A mandatory “credit counseling briefing” prior to your filing for either a Chapter 7 or a Chapter 13 bankruptcy for both debotrs and co-debtors
- The credit counseling briefing is a class on basic financial management, budget analysis, debt management strategies, and bankruptcy alternatives must be taken prior to filing
- A course must be taken before the filer of a bankruptcy can receive a discharge. This class helps you build a healthy financial future, and teaches you how to establish a good relationship with creditors
- Your bankruptcy attorney has to verify the information you provide by obtaining valuations on your property, and by analyzing your credit report, tax transcripts, and other documentation. We must also must have proof of your gross income.
Even with the extra steps of the process, bankruptcy remains an available option for those who truly need it. If you happen to get disqualified by the Chapter 7 means test, usually you can still opt to file under a Chapter 13 bankruptcy. Your bankruptcy attorney can guide you through each step of the process.
