Craig W. Andresen is a consumer bankruptcy lawyer in Bloomington, Minnesota, with 22 years’ experience in consumer and small business bankruptcy cases. He is the Minnesota chair of the National Association of Consumer Bankruptcy Attorneys, and is a member of the Minnesota State Bar Association’s Bankruptcy Section. Mr. Andresen lectures often on the topic of consumer bankruptcy at local and national legal seminars.

 

Author: Craig Andresen, Minneapolis, MN, Bankruptcy Attorney

14 Jan Mortgage Foreclosures in Minnesota: How Does It Work?

In Minnesota, a home mortgage can be foreclosed by sheriff's advertisement sale or by court action. Unless there a title defect to cure by means of a court order, almost all Minnesota mortgage foreclosures are done by advertisement. Foreclosing by advertisement is simpler, quicker and less expensive for the mortgage bank than doing it by court action. Laws governing the foreclosure of home mortgages vary from state to state, and the information contained in this article applies to Minnesota mortgage foreclosures only. A mortgage can be foreclosed any time you are behind on payments, but lenders commonly wait until you are four to five months behind, or sometimes more. If you can get completely caught up on payments, do it before the lender forecloses. It will save you from having to pay attorney fees for the foreclosure.
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13 Jan Can I Be Paying Someone Else’s Car Payment, And Still File Bankruptcy?

If your credit rating has been less than perfect due to financial difficulties, it's possible you are driving a motor vehicle that was obtained for your use by a friend or relative. If so, it's likely the vehicle is in someone else's name, and also the vehicle loan probably is in that person's name as well. However, you are driving the vehicle every day and making the payments with your own money. You probably are reimbursing that person for the insurance as well, unless you have your own insurance. If you file chapter 7 or 13, will this be a problem? Although normally a trustee can recover debt payments you have made to a close friend or relative in the one year before you file bankruptcy, the "new value exception" should help in this situation. The new value exception says that a trustee cannot pursue a party you have been repaying before you file bankruptcy, if that party has been providing you with something of equal value after receiving the payments from you. Here, you have been paying a debt payment for a vehicle owned by another, on a monthly basis, but that person has been allowing you to use the vehicle, with the accompanying wear and tear, and with you benefitting from the use of the vehicle, every month. That's the new value, the use of the vehicle.
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12 Jan Will My Ex-Spouse Have to Pay the Debts Discharged in My Bankruptcy?

If you file bankruptcy, you might be concerned about listing debts included in your divorce decree. Perhaps the divorce decree assigned certain debts to you, and you are worried that the creditors might ask your ex-spouse to pay the debts if you do not. While this is a valid concern, remember that you do not have a choice about which debts to list and which debts not to list, because you always are required to list every debt you have, even if it is contingent or disputed. If you are concerned about making sure your ex-spouse does not have to pay a debt included in your bankruptcy, you can always pay it later, after your bankruptcy is finished. In fact, it's possible your ex-spouse might even petition the bankruptcy court for an order that you continue the payments, to hold your ex-spouse harmless. However, there's something that's often overlooked, which might get you off the hook unexpectedly for the debt you think your ex-spouse might be liable for.
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10 Dec Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 8

Form B22, which is your bankruptcy case "means test," is used by the U.S. Trustee to see if you can afford a chapter 13 repayment bankruptcy case. If so, this usually excludes you from doing a chapter 7. The means test also can be used to establish what level of repayment your chapter 13 plan should provide to your creditors. This means you and your lawyer cannot afford to make any mistakes on Form B22, for example, by missing any expenses which ought to included on the form. Health care expenses is a category of expense for which your lawyer will never be able to provide a correct figure, unless you take the time to give her an accurate figure for all your monthly health care expenses. On the health care expenses line of Form B22, the instructions say you should include all health care expenses not reimbursed by insurance, and that you should exclude health insurance payments, which are allowed on a different line of the form. The term "health care expenses" is not defined in the form or elsewhere. This presents the question of what is an allowed health care expense.
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09 Dec Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 7

What happens if your bankruptcy "means test" results in your lawyer telling you that you cannot file a chapter 7? Or that your chapter 13 monthly payment must be an amount that is too much for you to pay? You need to start understanding the means test, contained in Form B22, if you plan on fixing that kind of problem. Even small monthly expenses will add up and skew your means test result if you or your lawyer forget to include them. Worse, some expenses could be omitted due to confusing or incorrect language chosen by the judges' committee that drafted Form B22. Life insurance is a means test category which is especially subject to confusion.
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03 Dec Means Test: Don’t Give Up, Even If You Think You Flunked It, Part 6

The "means test," or Form B22, is a financial report analyzing your income and expenses which must be filed as part of a consumer bankruptcy case. You usually have to pass the means test to file a chapter 7. The means test can also have a major impact on how much your chapter 13 payment must be. A particularly frustrating aspect of the means test is the line which allows an expense for "mandatory payroll deductions." The instructions for this line of Form B22 read as follows:
Enter the total average monthly payroll deductions that are required for your employment, such as mandatory retirement account contributions, union dues, and uniform costs. Do not include discretionary amounts, such as non-mandatory 401(k) contributions.

For chapter 7 cases, there is no further guidance. For chapter 13 cases, another line asks for any retirement account contributions, and also payments for retirement account loans. This is because the text of the bankruptcy law allows, in chapter 13, a deduction from income beyond what the IRS standards allow. In chapter 13 cases, there is not much debate over what is an allowable deduction on this part of the means test due to this additional language allowing retirement loans and normal retirement account contributions to be deducted.

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