#minnesota

Jun 9, 2014
2 min

Bankruptcy Options if You Are Behind on Condo / Townhome Assessments

Behind on your monthly HOAs, late fees or special assessments owed to your homeowner’s association? Under Minnesota statute, most defaulted amounts due to a homeowner’s association create an automatic lien against the individual unit, which means that these amounts remain secured against the condo or townhome even after bankruptcy. Because of this statutory lien, the association can collect against a defaulting owner either by way of initiating a lawsuit for personal liabilit

Lynn Wartchow

May 20, 2014
2 min

Chapter 13

Converting from Chapter 13 to Chapter 7: What’s Involved and Why Would You Convert?

Life inevitably changes and things happen that may cause a chapter 13 debtor to no longer need or afford their original chapter 13 plan. A job loss, other reduction of income or unanticipated increase in expenses can all be reasons for a debtor to lose their ability to continue making the chapter 13 plan payments. If the chapter 13 payments become unfeasible and, assuming the debtor qualifies, a chapter 13 case can be converted to chapter 7 for an immediate discharge. Typical

Lynn Wartchow

Oct 31, 2013
2 min

Foreclosure

How to Postpone the Sheriff’s Sale: Minnesota Statutory Postponement of Foreclosure Sale

In Minnesota, homeowners can apply for a postponement of the sheriff’s sale scheduled in a foreclosure process. So long as the foreclosure process is the standard “foreclosure by advertisement” (i.e., the most common Minnesota foreclosure process for residential homestead property), the sheriff’s sale is at least several weeks away, and the documents are properly completed and recorded in the correct offices, a sheriff’s sale will be automatically postponed by five months. Th

Lynn Wartchow

Aug 27, 2013
2 min

Homeowners/Condo Associations

Condo, Townhome and HOA Association Liens in Minnesota

In Minnesota, if you have unpaid condominium or townhome association assessments—which are often called “HOAs”—these unpaid amounts operate automatically as a lien on the property under Minnesota Statute § 515B.3-116(a), which is part of the Minnesota Common Interest Ownership Act. What a condo or townhome association lien typically means for the homeowner is that you cannot get out of paying past due HOA assessments while you own the property. Further, it means that the prop

Lynn Wartchow

Feb 15, 2013
3 min

Chapter 13

What Happens after the 341 Meeting of Creditors is Over?

The answer to this depends on whether you have filed Chapter 7 or Chapter 13 bankruptcy. (Chapter 11 individual debtors also are required to attend a Meeting of Creditors). At a minimum and for all Chapter 7 and Chapter 13 cases, the debtor must take the second financial management course and file the certificate with the Bankruptcy Court. The Notice of the Meeting of Creditors will give a specific deadline for filing the certificate in a chapter 7 case (the certificate can b

Lynn Wartchow

Jan 2, 2013
2 min

Chapter 13

How Are Non-Dischargeable Debts Treated in a Chapter 13 Bankruptcy?

Non-dischargeable debts are those few categories of personal liabilities which can never be discharged in either form of Chapter 7 or Chapter 13 bankruptcy. Non-dischargeable debts include most individual income taxes, many business-related taxes such as withholding tax and other trust fund taxes, domestic support obligations, spousal support/alimony and child support, debts related to fraud or fiduciary embezzlement, educational and student loans, unlisted debts and other le

Lynn Wartchow

Dec 12, 2012
2 min

Chapter 13

Will My Assets Be Protected in Bankruptcy? What Are the Bankruptcy Exemptions?

Most people who file for bankruptcy are able to protect most if not all of their assets, including cash bank accounts, household goods and furnishings, 401(k) plans and IRAs (as well as other types of retirement accounts), cars and vehicles, their homestead and more. Assets are protected in a bankruptcy by way of exemptions, meaning that an asset is protected when it is ‘exempt from the bankruptcy estate’. When an asset is exempt, it is outside of the reach of both creditors

Lynn Wartchow

Nov 15, 2012
3 min

Chapter 11 Reorganization

Managing the Business During Chapter 11: Reporting and Other Requirements

When a business files Chapter 11, it becomes a “debtor-in-possession” of its own affairs as a fiduciary to the bankruptcy estate. What this means is that management of the business during the Chapter 11 case will remain under the control of its prepetition management and principals, subject to certain duties to report and maintain the business in a manner consistent with the procedural rules of Chapter 11 business reorganization bankruptcy. While these mostly financial and ad

Lynn Wartchow

Sep 19, 2012
2 min

Chapter 13

What is the Median Income in Minnesota and How Does is Factor into Chapter 7 Bankruptcy?

Qualification for Chapter 7 bankruptcy is largely determined by comparing one’s household income to the median income for their state. Essentially, if your gross annual household income exceeds the Minnesota median income for your family size you may not qualify for Chapter 7 and may be required to file Chapter 13 instead. Therefore, the Minnesota median income is a significant factor in determining whether you may qualify for Chapter 7 bankruptcy or if you may be instead ste

Lynn Wartchow

Sep 4, 2012
2 min

Chapter 11 Reorganization

What is Individual Chapter 11 Bankruptcy and Why Would I File an Individual Chapter 11?

The vast majority of individuals who file bankruptcy chose to do so under either Chapter 7 or Chapter 13, which are the most common forms of consumer bankruptcy. However, there are certain individuals that may instead take advantage of the greater flexibility that Chapter 11 can provide, especially when the individual has considerable and/or income-producing assets to protect and distinctive objectives to attain in bankruptcy. (For other detailed discussions on chapter 11 pro

Lynn Wartchow

Aug 15, 2012
2 min

Chapter 13

What are the Debt Limits for Chapter 13 Bankruptcy?

Click here to see the current Chapter 13 Debt Limits effective April 1, 2016 and valid through 2019. As of the date of this post, the debt limits for Chapter 13 bankruptcy are $1,081,400 in secured debt plus $360,475 in unsecured debt (see the 2014 debt limits here). These limits include only debts that are not disputed, non-contingent and liquidated. This means that amounts which are not yet decided (for example, a potential award of attorney fees in a pending lawsuit) may n

Lynn Wartchow

Aug 6, 2012
3 min

Chapter 13

What Should I Expect at the 341 Bankruptcy Meeting of Creditors?

If you have done basic research into the bankruptcy process, you will know that about one month after filing a bankruptcy petition and schedules there will be a mandatory hearing called the “341 Meeting of Creditors”, which is named after the section of the Bankruptcy Code that requires the hearing. Clients often ask what to expect at the Meeting of Creditors, what they should bring to the Meeting of Creditors and what creditors will be present at the Meeting of Creditors. Fo

Lynn Wartchow

Jul 24, 2012
3 min

Chapter 13

Foreclosure in Minnesota: Know the Process, Timeline and How Bankruptcy Can Help

Home foreclosures in Minnesota are common and arguably are even on the rise despite an improving real estate market. In April 2012, the Star Tribune reported that while foreclosures were slightly down during the first quarter of 2012, signs still point to an 11 percent increase in Minnesotans facing foreclosure, adding that one in 312 Minnesota homeowners have received some sort of notice of foreclosure. Home foreclosure in Minnesota happens via one of two legal proceedings:

Lynn Wartchow

Jul 10, 2012
2 min

Chapter 7

What is the “Means Test” and Why Does it Matter in Bankruptcy?

The “Means Test” was one of the major and most controversial additions to consumer bankruptcy law that occurred as part of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”). Part of the congressional intent of BAPCPA was to limit a person’s ability to obtain Chapter 7 relief and instead direct them into filing Chapter 13. While there are many reasons why some consumer debtors actually prefer to file Chapter 13 bankruptcy, Chapter 7 is still widely av

Lynn Wartchow

Jun 21, 2012
2 min

Chapter 13

What is the “Credit Counseling” Requirement to File Bankruptcy?

A credit counseling course must be completed before an individual can file bankruptcy. This course basically goes through your budget and educates on how to prioritize certain expenses, save money and manage a household budget. While every individual who files for Chapter 7, Chapter 13 or even Chapter 11 bankruptcy is required to complete this credit counseling course before filing bankruptcy, this class is relatively simple and some even find it useful. What you should know

Lynn Wartchow

May 9, 2012
3 min

Chapter 13

Bankruptcy and Divorce: What Should Come First?

Divorce is often a precursor to bankruptcy, for either one or both of the divorcing spouses find themselves in need of discharging debts in the face of earning only a single income once again. The difficult question is determining what should come first: the bankruptcy or the divorce. The answer of course depends on a multitude of circumstances including whether the spouses can cooperate and agree to a joint (and amicable) bankruptcy filing before the divorce is finalized, ho

Lynn Wartchow

Apr 30, 2012
3 min

Chapter 13

Chapter 7 vs. Chapter 13 Bankruptcy: A Primer

Most often the people that come to me for help in bankruptcy do not initially know the difference between Chapter 7 and Chapter 13 bankruptcy, which Chapter may be better for them or even which form of bankruptcy protection they qualify for. The similarities between these two Chapters are fairly straightforward: both are forms of consumer bankruptcy protection that can discharge debts such as credit cards, medical liabilities, home mortgage deficiencies, personal guarantees a

Lynn Wartchow

Apr 10, 2012
2 min

Foreclosure

When Will I Owe a “Deficiency” after Foreclosure in Minnesota? It Depends.

Under some circumstances after foreclosure, a deficiency may still be owed on a foreclosed property. A deficiency or “deficiency judgment” is obtained by some lenders (a.k.a. “mortgagees”) after a foreclosure on real estate where the sales price of the property does not cover the balance due on the mortgage plus related any fees and costs. The amount of the deficiency is usually the difference between the total amount due on the note including expenses and costs and the amoun

Lynn Wartchow

Apr 6, 2012
2 min

Chapter 11 Reorganization

Defined: The Bankruptcy “Trustee” and the “United States Trustee”

The terms “trustee” and “United States Trustee” sound similar and often encompass similar objectives, however the role of the trustee in bankruptcy proceeding is distinctly different than that of the United States Trustee. The “United States Trustee” (also called the U.S. Trustee or “UST”) is essentially a federal office within the U.S. Department of Justice that oversees the administration of all bankruptcy cases in a certain district. Here in the district of Minnesota as in

Lynn Wartchow

Mar 9, 2012
3 min

Debt Collection

Received a Form 1099-C on Foreclosed Home? You May Qualify for the Mortgage Forgiveness Exclusion to

If you receive a Form 1099-C reporting ‘debt cancellation’ income after a home foreclosure, you may qualify for the Mortgage Forgiveness exclusion. As if the distress of home foreclosure isn’t enough, homeowners may receive a Form 1099-C from their former mortgage lender reporting the deficiency owed as income to the homeowner. The income reported on the Form 1099-C is what’s referred to as “Cancellation of Debt Income” or “Discharge of Indebtedness Income”, both of which gen