When you think of bankruptcy, what do you think? For most of us, the term ‘bankruptcy’ comes with negative connotations. Words such as ‘the end,’ ‘disaster’ and ‘failure’ comes to mind. However, in reality, bankruptcy is actually the complete opposite.

First of all, bankruptcy should be seen as a new beginning and as a fresh start rather than an end. Secondly, bankruptcy can actually be seen as a blessing rather than a disaster as it provides you with a solution to a huge problem. However, this is only the case when it is done properly. And, finally, bankruptcy should not be seen as a failure but as acceptance of the past. Filing for bankruptcy proves that you have the courage to move on and get out from under this debt with your head held high. Below are some tips to overcoming the social fear and stigma that surrounds bankruptcy.

Keep it Confidential

Although many people are completely open when it comes to your financial situation, most debtors will keep their bankruptcy a secret. If you want to discuss your bankruptcy case at the next neighborhood dinner, this is completely up to you but keep in mind that it is a personal matter. The only opinions that should matter on your bankruptcy case are yours and those of your Minnesota bankruptcy attorney.

Research the Facts about Bankruptcy

You may be surprised to know that bankruptcy is actually extremely common. In 2008 there were over 15,000 bankruptcy filings in Minnesota. So far in 2009, there have been over 10,000 filings in the first and second quarter alone. The American Bankruptcy Institute has suggested that one in ten American households have filed for bankruptcy. These statistics suggest that bankruptcy is not as uncommon as you may have thought, and, furthermore, that it is a valid solution to your problem with debt.

Understand the Process

Another way to come to terms with bankruptcy is to understand what you are up against. The bankruptcy process is actually not as confusing as most people think. With the help from an experienced Minneapolis bankruptcy lawyer, you will be able to file for bankruptcy and discharge your debts within a couple of months. There is paperwork involved but this is not something that you should feel overwhelmed by.

See the End Result in Filing for Bankruptcy

Finally, when it comes to handling bankruptcy, you need to see the end result. Many people who are considering filing for bankruptcy only focus on the negative feelings of right now. If you are struggling with debt and contemplating bankruptcy, then you are probably feeling a whirlwind of emotions including guilt, shame, anger, fear, despair, frustration, confused, exhaustion, etc. However, once you have met with a MN bankruptcy lawyer, stopped the creditors and actually filed for bankruptcy, you will feel your first flutters of excitement for the future and financial freedom. Instead of looking at the negatives that surround today, look to the positives of the future. This is what bankruptcy is all about- providing you with a new beginning and a brighter future for your family.

There comes a time in many families’ lives that the overwhelming debt becomes more than just a problem- it becomes a burden. If your debt is starting to overrule your life, then it might be time to consider the option of bankruptcy. Bankruptcy is not just for large companies that are gone in over their head, nor is it for problem people who went a little shop crazy. Bankruptcy is a solution for anyone who has, for one reason or another, found themselves struggling with debt. You could have lost your job; you could be in danger of losing your home; you could be suffering from a serious illness; you could have just been divorced. Whatever the reason, filing for bankruptcy can provide you with a new beginning and a new outlook on life.

However, before you file for bankruptcy, there are five things you must do at home first. This will help prepare you for the bankruptcy process and ensure that you are ready for the journey ahead.

Contact a Minnesota Bankruptcy Lawyer

First and foremost, you will need to seek professional assistance. You cannot (and should not) go through the bankruptcy process alone. An experienced MN bankruptcy lawyer can help you through the paperwork and the process. Furthermore, a Minneapolis bankruptcy lawyer can assess your situation and help you understand what the best option is. Look for a MN bankruptcy attorney that offers a free initial consultation.

Choose the Type of Bankruptcy

There are four different types of bankruptcy. For the individual, there is the Chapter 7 “liquidation” option or the Chapter 13 “reorganization” option. For the business, whether it is a corporation or a sole proprietor, there is the Chapter 7 “liquidation” option or the Chapter 11 “reorganization” option. There is also Chapter 12 bankruptcy but this is usually reserved for farmers and fishermen. Your Minnesota bankruptcy lawyer will be able to help you out with this decision.

Understand the Types of Debts

It’s important to note that not all debts will be wiped out through the bankruptcy process. Unsecured debts, such as your credit card bills, utility bills, medical bills and some loans will be discharged but secured debts most likely will not. You should be able to keep your home and other property if it falls under the exemption law. If you are unsure if your assets fall under exemption, speak to your MN bankruptcy attorney about it. Student loans, child support and spousal payments will also not be discharged.

Determine Joint or Single Filing

Finally, you and your spouse will need to decide whether it is in your best interest to file a joint bankruptcy claim or a single filing claim in your name only. There are several pros and cons to either case but the right answer can only be determined through a personal assessment of your situation. Under the Minnesota exemption law, filing for joint bankruptcy will mean that the exemptions are doubled in order to accommodate both members of the bankruptcy case. To determine if this is the best option in your case, contact a MN bankruptcy lawyer today.

If you are considering filing for bankruptcy, you obviously have some questions. We all do. Below you will find the answers to some of the most common questions surrounding bankruptcy. Keep in mind that, although these questions will offer some insight into the option of bankruptcy, it’s best that you speak to an experience Minnesota bankruptcy attorney regarding your particular situation.

What is needed from me in a bankruptcy case? – There are six main items you will need when it comes to your bankruptcy case:

1) Seven months worth of pay slips
2) A certificate of credit counseling
3) Most recent tax file return
4) A filed out client worksheet which will include your information and the information of your creditors
5) A list of your expenses, assets, liabilities and property
6) A form of identification such as a driver’s license or a passport

How will filing for bankruptcy affect my credit? – This is one of the most common questions involving bankruptcy cases. The truth is there is no set law that will determine how bankruptcy will impact your credit rating. However, bankruptcy will not affect your eligibility for student loans, and, after 18 months, bankruptcy will not impact your eligibility for a home mortgage. Most people who have filed for bankruptcy report that future creditors are not too concerned with their past bankruptcy record as long as they have a stable income now.

Can I keep my home and car? – in most bankruptcy cases in Minnesota, the debtor will be able to keep their car and home under the exemption laws that are put in place at both the state and federal level. However, you will need to discuss your personal situation with a MN bankruptcy lawyer.

What are my bankruptcy options? – an individual has three different options when it comes to bankruptcy – Chapter 7, or liquidation bankruptcy; Chapter 13, or re-organization bankruptcy; or Chapter 11, or reorganization bankruptcy for those with unsecured debts higher than $330,000. Businesses will have two options for bankruptcy – Chapter 7 bankruptcy; or Chapter 11 bankruptcy. It’s best to discuss these options with your Minneapolis bankruptcy lawyer to determine which the right option for you is.

What debts will be discharged? – In most Chapter 7 and Chapter 13 bankruptcy cases, any unsecured debt will be discharged. This typically includes credit card debts, medical bills, utility bills and some bank loans. However, student loans, spousal and child support will not be discharged and, in most instances, your secured debts will also remain your responsibility.

How long will the process take? – The process of bankruptcy will generally take a few months. However, as soon as you file for bankruptcy and put in the documentation, the bankruptcy court will issue the creditors to stop harassing you. In this way, the process will start to take effect immediately. You can expect to attend the meeting of creditors 30-60 days after filing for bankruptcy and you will receive a notice of discharge within 90 days. A MN bankruptcy lawyer can help you determine the exact time frame on your bankruptcy case.

How long will Bankruptcy remain on my credit report? – Bankruptcy will remain on your credit report for seven to ten years.