Understanding the Predischarge Debtor Education Requirement for Bankruptcy in Luverne, MN

Whether you file for liquidation or debt reorganization bankruptcy, it’s likely that one or more of your debts will be discharged in the process. Discharging debts in Chapter 7 serves to simultaneously relieve debtors of unmanageable financial hardship and allow fair treatment of creditors despite a lack of full repayment. In a Chapter 13 case, certain debts can be discharged through a repayment plan. Foreseeing which debts will be discharged can be difficult, and organizing your case without the help of a professional may change that outcome. Behm Law Group, Ltd. offers legal advice and assistance if you choose to file for bankruptcy in Luverne, MN.

In addition to the many requirements involved in bankruptcy cases, filers who will have debts discharged must undergo predischarge debtor education before the bankruptcy process can be completed and before the bankruptcy court can issue a discharge order.

Predischarge Education

The predischarge debtor education requirement was established with the purpose of advising those who’ve fallen into debt and filed for bankruptcy on how to better manage their finances. This course is different from the credit counseling requirement which debtors must undergo prior to filing a bankruptcy petition. Instead, debtors must go through a predischarge education course after their petition is filed but before they’re granted a discharge on any debts.

The financial management education course must be provided by a court-approved agency within a forty-five day period after the meeting of the creditors. The course lasts around two hours and covers materials that teach debtors how to improve their financial situation after bankruptcy. Topics include effective budgeting practices, handling taxes sensibly, and other court-required material.

You’ll certify your fulfillment of the predischarge debtor education requirement with bankruptcy Form 423, and if you file a joint bankruptcy petition, you and your spouse must both take the course. Additionally, the agencies that provide the necessary predischarge debtor education course don’t have to follow the same non-profit regulations as credit counseling providers. This means you may have to pay a fee to take the required course.

If you’re contemplating filing for bankruptcy, it’s important to consider fees for requirements like predischarge debtor education and other milestones in your case before you begin. Behm Law Group, Ltd. offers assistance at every step whether you file for Chapter 7 or Chapter 13 bankruptcy in Luverne, MN. Contact us at (507) 387-7200 today for more information.

 

Exempted Properties and Debts Involved with Chapter 7 Liquidation Bankruptcy in Mankato, MN

Chapter 7 bankruptcy is the most common form of bankruptcy used to address issues of bankruptcy for individuals and businesses. Almost all cases of Chapter 7 bankruptcy involve converting all of the debtor’s assets into a cash value—otherwise known as liquidity. Because Chapter 7 functions to turn a debtor’s property and assets into cash used to repay creditors, it is commonly referred to as liquidation bankruptcy. At Behm Law Group, Ltd., we offer professional guidance and legal protection in all cases of Chapter 7 liquidation bankruptcy in Mankato, MN.

Chapter 7 is often the best choice for individuals filing for bankruptcy because it provides an efficiently-governed breakdown of assets. This gives the debtor a debt-free new start while also allowing for several properties exemptions. This means that the federal court allows the debtor to withhold necessities of life—such as housing and transportation—from the bankruptcy process.

The common assets that are exempt from the Chapter 7 bankruptcy liquidation process are considered basic needs for the debtor, in terms of survival and ability to function as a contributing member of society. In the state of Minnesota, these debts include, but are not limited to:

  • Homestead
  • Household car or other means of transportation
  • Pension or retirement benefits
  • Personal property (such as clothing, appliances, furniture, food, wedding rings, and tools of trade)
  • Insurance benefits
  • Assistance and other benefits
  • Wages

While the promise of these exemptions of property from the bankruptcy process are comforting, keep in mind that Chapter 7 bankruptcy doesn’t allow for the liquidation of several kinds of common debts. Not every debt is forgiven, and there are many cases where filing for bankruptcy is not ideal. Chapter 7 does not involve the following:

  • Student loan debts
  • Debts from fraud
  • DUI and DWI debts
  • Child support debts
  • Tax debts
Chapter 7 bankruptcy is not an answer for all debt situations, but if you choose to acknowledge the exemptions for the process and file for liquidation bankruptcy, our attorneys can guide you every step of the way. We do everything in our power to make filing for bankruptcy into a beneficial situation, giving you an opportunity to start fresh.

For more information about your options with liquidation bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200, or via email at stephen@mankatobankruptcy.com today.