By: Wesley W. Scott
Many Minnesotans are not aware that the government offers a legally binding debt consolidation plan of their own – it’s called a Chapter 13 Bankruptcy.
What is a Chapter 13 Bankruptcy? It’s a government sponsored debt consolidation plan where you make payments back to your creditors, based on what you can afford and at the end of a fixed period of time (a minimum of 3-5 years max) whoever does not get paid off gets wiped out, tax free, forever!
In Chapter 13 Bankruptcy, I have to pay everyone back right? WRONG! Here’s an example to illustrate how Chapter 13 Bankruptcy works. Let’s assume Susan has 100k in credit card debt. She works at a job that pays her 60k a year. Susan meets with an experienced attorney who does a thoughtful analysis of her income and expenses with Susan present. After looking at Susan’s budget it is determined she could afford to pay $200.00 per month for 36 months (she is under the median income because she has a son who is 5 years old that lives with her).
Susan will pay $200.00 a month to a chapter 13 trustee who disburses this money to her creditors based upon the plan we set up. Basically, most creditors in the same class get paid pro rata (based on the size of their claim). However, at the end of 36 months, Susan will have only paid $7,200.00 not near enough to pay her 100k in credit card debt in full. What happens to the balance owed? $92,800.00 gets wiped out, tax free, forever!
Now that is a plan worth getting excited about. While Susan is in the chapter 13 bankruptcy, no creditor can call, write, or sue her or do anything to collect on those debts. After the discharge is received, the unpaid creditors are barred from collecting from her, for life!
The first step is a big one but then it gets easier. If it is decided that doing a Chapter 13 Bankruptcy makes sense for you, our MN Bankruptcy Attorney will instruct you to stop paying unsecured debt and will tell you what secured debts to pay and not to pay.
Remember when I said that you and our Bankruptcy Attorney will determine your payment amount? This is where that happens. The review and sign appointment is designed to flesh out your assets and debts and to make sure your budget is correct and the payment is something you can afford to pay.
Most of the time, these appointments last 2 hours. Time well spent in constructing a solution to a problems that has nagged you for a long time.
The Chapter 13 Bankruptcy 341 Meeting is focused on your budget. Are your income and expenses correct? Can you afford to pay more? Can you afford to pay what you propose to pay? Your attorney is with you at this meeting. You have been well prepared and you feel confident.
The confirmation hearing is where the bankruptcy court approves your plan. Attendance at this hearing is rarely required. The vast majority of plans get approved without anyone attending this hearing. We tell our clients, don’t even put it on your calendar.
Once your Chapter 13 plan is approved, you have a legally binding plan. The debtor and all the creditors are bound to comply with the terms of the plan.
Once the terms of your plan have been satisfied, you get a discharge. Once you have been discharged, any remaining debt gets wiped out, tax free, forever! You hear what I am clucking big chicken? This is amazing stuff.
Chapter 13 Bankruptcy is the very reason I feel terrible for any Minnesotan suffering from overwhelming debt who is laboring through a traditional debt consolidation plan. The chapter 13 plan is far superior to any traditional debt consolidation plan on the market.
What is really upsetting is to see people suffer in a debt consolidation plan for years only to end up in a Chapter 13 Bankruptcy anyway. I think about all of the time, money, and misery that could have been saved. I am not a big believer in suffering needlessly.
If you have any questions about Chapter 13 Bankruptcy or just would like to know more please contact one of our numerous Minnesota locations near you , we’d be happy to help.
Compare the advantages and disadvantages of bankruptcy.
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- Sue L.
“I went to google to check out some attorney's in the Mpls area and the first office that came up was Kain & Scott. I checked out their website and I was sold on them right away! I was very impressed with what I read about them and the people who worked for them.”
“If you, or somebody you know, is considering filing for bankruptcy, do yourself a favor, don't bother contacting just any law firm. Contact Kain & Scott! They will make you feel more relaxed and less stressed than you've felt in a LONG time! THEY HAVE YOUR BEST INTEREST because THEY CARE ABOUT YOU. Call them or email them. You will NOT be sorry.”
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- Miranda M.
“These are very kind and helpful people who take the stigma out of bankruptcy and treated me like I wanted to be treated. They understand good people sometimes have hard times. Wes Scott and his team are so nice! Stephanie Buerger has been a savior and responds to my email or phone call questions the same day. It feels like small town service with big city talent and reputation!”
- John S.
“They live up to their motto of being the friendliest lawyers around. The welcome receptionist comes around to greet you and leads you to a private room furnished with snacks and drinks. There is a massage chair in the room and your name is on a sign welcoming you personally to the private space.”
- Brother S.
“There are no better bankruptcy attorneys in MN - from the initial conversation to working with Veronica on payments, there are no finer people to help you get your life on track. Bankruptcy can be a terrifying thing, but Kain and Scott absolutely have your back.”
- Andrew K.
“After doing a bunch of internet research for Bankruptcy Attorneys, Kain & Scott PA overshadowed all others I had looked at. If you are not sure what to do, which option is best or who to choose, please call Kain & Scott. They will listen to your situation and tell you what your best option would be. Again call Kain & Scott, you will be glad you did! I know I am!!”
- Tammy E.
“I am not one to ever right a review, but with how wonderful Kain & Scott are I just have to let other people know. I would most definitely recommend them to my family, friends, or a colleague who is looking at filing bankruptcy.”
- Jessica A.
“Kain and Scott is the BEST!! Margaret H. helped me out a great deal when I was going through my hardship! I really love the fact that all the staff including Lindsay B. was kind enough to answer some personal questions that I had along the way. I wouldn't choose another company to work with! Thank you everyone who made my journey as a BREEZE! Now I would like to include Stephanie V. Buerger for congratulating me on my journey stepping forward to a debt free life! Stephanie Googins has done a great job providing me with additional information after the bankruptcy proc”ess!
- Gina S.
“I highly recommend this firm as well as recommending bankruptcy! Times have changed and it's not a big deal like it may have once been or how old people talk about it. It's truly a new beginning. This has made my life so much simpler. Exactly what I needed heading into a divorce. I can't thank these guys enough!! ”
- Mandy B.
“The process was so easy, this firm does all of the work for you and really works for you. They are great in responding to any questions you may have. I would recommend this firm to anyone who is struggling with debt. They are also very cost effective, and will work with you for payment arrangements. We couldn't be more satisfied! Debt free finally!”
- Katie B.
“All I can say is wow! From the moment I walked in the door I felt welcome and better right away! Everyone one treated me like me like my story actually mattered! I worked with Misty Myers and she was such an amazing person to work with! She made things so easy and just took charge right away with trying to help! I highly recommend Kain and Scott! I couldn't be happier with how I was treated!”
- Dustin S
“Even from the first conversation I had on the phone regarding their services, I knew I was going to choose them. I made an appointment for the following week and was welcomed with no judgement. The whole process was fast and efficient. I worked personally with Misty, Samantha, and Callie but everyone there was extremely helpful when I had questions. There was little to no paperwork and they did most of the work for me. My only regret was not filing sooner!”
- Megan W.
“The staff at Kain & Scott were amazing! They make you feel very comfortable from the first time you step in the door. Everything is well organized and they respond quickly to any questions you have. Shout out to Wes, Calli, Megan, Sarah, and Lindsey you all were great in helping me get my life back. Keep up the good work!!”
- Toby A.
“I have to say I have had the greatest experience filing bankruptcy with Kain&Scott. Kelsey B Quarburg and Jesse A Horoshak were two of the most professional attorneys I have ever worked with. Jesse showed up at my 341 meeting totally prepared. Other attorneys along with their clients weren't. Jesse and I weren’t called up first, so I had the privilege of seeing how this meeting would work. The first two clients and attorneys weren’t prepared at all, they were told by the federal trustees,that they were missing paperwork and information. It took these two clients and attorneys 20 minutes each to get through the process. Jesse had 1 client he was representing before me. The process was flawless, 5 minutes and the process was complete. My meeting took 5 minutes. It proved to me choosing the best law firm matters. Kelsey B Quarburg is the best. She was very professional yet she was also human. She would respond to my emails at odd times of the day and night. She kept me informed every step of the way. Thank you both. Thank you Callie for making sure my paperwork was forwarded and up to date. What a team. Thank you all so much for a job well done ,and I mean this from the bottom of my heart. Once again thank you all,for giving my life back. GOD BLESS YOU ALL ”
- Maurice W.
“Stellar customer service and you have the “how can I help you” staff! You made my future easier to handle and I have so much more confidence especially with your staff behind me. I appreciate all your help and time you spend helping me address my credit. ”
- Nancy N.
“I am very fortunate to have found Kain & Scott. They made my experience fast, friendly and trustworthy. Thank you to Megan R. for being flexible with payment arrangements and really understanding what other people may be going through and how to do what is best for them. 😊 Thank you to Stephanie Buerger as well,for being very welcoming and easy to work with during my initial info gathering. Thank you gals for making my experience a low stress to the point “filer friendly” experience. ”
- Scott K.