The decision to file bankruptcy is a very important step. It can give a person an opportunity for a fresh start. It is important, however, to remember that along with the many advantages of filing a bankruptcy come responsibilities including following all legal requirements. Even after the bankruptcy is concluded, a debtor should use the opportunity afforded to him or her for a new beginning by making responsible decisions in handling income, budgeting expenses, and the use of credit. Properly used, a bankruptcy can be a very effective tool to provide debt relief and give a person a fresh start. The proper use of a bankruptcy requires a person to know and follow all of his or her legal obligations.
Financial Disclosures in Bankruptcy
A debtor seeking the protection of bankruptcy is required to provide full, accurate and verifiable information regarding all of his or her property, income, legitimate expenses and liabilities. The debtor is also required to provide detailed information on all financial transactions in the years prior to filing the bankruptcy. Full and honest disclosure of financial information to the bankruptcy court is required. The failure of a debtor to honestly provide all required information could result in a bankruptcy being dismissed or even sanctions for violation of the bankruptcy laws.
Requirement for Debtor Counseling and Education
A debtor seeking the protection of bankruptcy should expect to be required to fulfill pre-filing counseling and post-filing debtor education. The debtor will need to file certificates of completion of these requirements with the bankruptcy court.
Attendance at Bankruptcy Related Meetings and/or Hearings
The consumer seeking the protection of the bankruptcy court must attend all required hearings. The debtor(s) must provide to the trustee appointed to oversee his or her case verification of identity as well as income and account information and any other information the interim trustee may request from the debtor. A debtor needs to understand he or she must fully cooperate with the bankruptcy court in all respects including providing full and accurate information in a timely manner to the trustee.
Non-dischargeable Debts
While bankruptcy may provide overall debt relief it may not discharge all financial obligations. In general there are certain types of debt that are not discharged in bankruptcy and that the debtor should expect to have to pay. It is very helpful for debtor to meet with a knowledgeable Minnesota bankruptcy attorney to go over all of his or her debts and discuss which of these may not be dischargeable in a bankruptcy. In general, student loans, money that has been borrowed based upon fraud, many types of tax debts, criminal fines, child support, spousal maintenance and alimony are non-dischargeable. This is not an exhaustive list of all non-dischargeable debts. There may also be specific considerations that may be required or advisable in handling certain of these types of debts. For example, student loans are generally non-dischargeable. If payment of the student loans would create an undue hardship, a discharge of such debt may be allowed. It should be kept in mind that such hardship discharges are rare and not likely to be allowed except under extremely unusual circumstances. Generally, an exception to what is normally a non-dischargeable debt is not given under prevailing law. Each bankruptcy must be carefully assessed so it is important for a debtor wanting to proceed with a bankruptcy to go over his or her whole financial situation and assess all debts that would be dischargeable and what would not be dischargeable. Having a skilled bankruptcy attorney go over the debtor's entire financial situation and provide a list of those debts that will likely be non-dischargeable can be very helpful. Bankruptcy may be a very useful instrument in allowing a person to be able to better cope with his or her financial situation when properly used by a debtor.
