If I file bankruptcy in Minnesota, can I keep my car?

When potential clients ask me questions about filing bankruptcy, one of their first few questions to me usually has to do with whether they can keep their car if they file bankruptcy.

In order to answer that question, I need to get more information from them:

1) What other assets do they have? This will help me figure out whether we will be using the Minnesota exemptions or the federal exemptions. I explain the difference between the two types of exemptions during an initial consultation.

2) How much is their car worth? To figure out the value of their car, I have them look up the private party (not trade-in or retail value) on the Kelley Blue Book website.

3) Do they owe money on a car loan? If yes, which bank do they owe, AND how much do they owe? The reason for this question is two-fold. First, it helps me determine how much equity (if any) they have in the car. Second, we can talk about what might happen with their car loan after they file bankruptcy.

I can’t make any promises to potential clients or to blog readers, but I can say that clients do not typically lose their car after filing bankruptcy unless they have wanted to surrender (lose/get rid of) their car. 

 

Elizabeth Rosar Chermack is a Minnesota Bankruptcy Attorney, and can represent you in your bankruptcy matter.  Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with Liz.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

Elizabeth Rosar Chermack, Attorney at Law, is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code.

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Credit scores and bankruptcy

When someone schedules an initial consultation with me to discuss their debts and what options they have to resolve their debts,  their credit score is often on their mind. People want to know how filing bankruptcy will impact their credit rating. It is difficult for me to give an exact answer. Once a client retains me to file bankruptcy, I use a service to pull their credit reports (with my client’s permission, of course!) so I can enter information about their creditors into their bankruptcy petition. That service also provides me with a report to share with my clients. The report includes an “analysis” of what the company believes my client’s credit score will be one year after filing bankruptcy. It usually shows that the client’s credit score will improve/increase one-year after filing bankruptcy. I tell my clients not to take that “analysis” too seriously, but it is interesting to see. Only time will tell, of course, whether a person’s credit score will actually improve in accordance with that company’s prediction.

Recently, Bloomberg posted an article regarding credit scores and an upcoming change in how credit scores are calculated. The main point of the article is that this change will “reduce the importance of overdue medical bills and remove blemishes on once late, paid-off accounts.” This is good news for many people. 

Elizabeth Rosar Chermack is a Minnesota Bankruptcy Attorney, and can represent you in your bankruptcy matter.  Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with Liz.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

Elizabeth Rosar Chermack, Attorney at Law, is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code.

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How can I afford to hire a bankruptcy attorney?

It’s pretty common for bankruptcy attorneys to hear the following from our potential clients:

I need to file bankruptcy. I can’t afford to pay my creditors. How can I afford to pay for a bankruptcy attorney?

Everyone’s situation is different, but here are some ways that people are able to afford to hire a bankruptcy attorney:

1) Tax refunds. From February until April it is pretty common for clients to pay to retain a bankruptcy attorney by using their tax refund.

2) Help from relatives or friends. Sometimes a client’s friend or family member will help them out by paying their fees. It is important to clarify whether they think the money being paid is a gift or a loan. If it’s a loan, you need to be very careful about when you pay it back, because you do not want the bankruptcy trustee suing your friend or relative to recover a preference

3) Payment plans. Some attorneys offer a payment plan. The client pays the fees over a few months, and then they are able to file their case. 

Bankruptcy attorneys are not permitted to accept credit card payments from someone who is filing bankruptcy. In other words, if you are going to be filing bankruptcy, you cannot use your Visa credit card to pay your bankruptcy attorney. 

Elizabeth Rosar Chermack is a Minnesota Bankruptcy Attorney, and can represent you in your bankruptcy matter.  Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with Liz.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

Elizabeth Rosar Chermack, Attorney at Law, is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code.

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Filing bankruptcy while unemployed

Like anything in life, you have to take the bad with the good. Sometimes, though, there is also some good that you can take with the bad. I have yet to meet someone who is ecstatic about being involuntarily unemployed. However, sometimes there is some “good” that comes with the “bad.”

It is not uncommon for employed people to be struggling financially and to be in debt and be unable to pay off their debts. While employed, though, those people will often continue to “tread water” and “survive” by making minimum payments towards their debts and basically hoping for the best. They may have looked into bankruptcy at one point or another and found out that their income made it difficult for them to qualify for a Chapter 7 bankruptcy due to the means test. They also may not have felt ready (or financially able) to commit to a Chapter 13 bankruptcy. So they continue to (barely) keep their heads above water.

Then tragedy (or “the bad”) strikes, and they lose their job. Maybe their company shut its doors or needed to do layoffs due to budget constraints. Suddenly it feels impossible to make even their minimum credit card payments each month. Here is where “the good with the bad” comes into play. It is generally a lot easier for people to pass the means test and qualify for Chapter 7 bankruptcy when they are unemployed – even if they are receiving unemployment. 

Of course, there are other positives and negatives to this situation. Every case (and person) is different, after all. When someone files bankruptcy, they want to be sure that they won’t find themselves in a worse financial situation shortly after filing bankruptcy. If someone doesn’t have health insurance, for example, it might be a good idea to wait to file bankruptcy until they are insured. 

Because every situation is unique, if you are considering bankruptcy, you should consult with a bankruptcy attorney.

Elizabeth Rosar Chermack is a Minnesota Bankruptcy Attorney, and can represent you in your bankruptcy matter.  Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation with Liz.

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

Elizabeth Rosar Chermack, Attorney at Law, is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code.

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Tax consequences of foreclosure in Minnesota

When someone meets with me because their home may end up being foreclosed on, one of the things that I tell them is that they should meet with an accountant – a good one – sooner than later. Last year, people were concerned about whether the Mortgage Forgiveness Debt Relief Act would be renewed. The Mortgage Forgiveness Debt Relief Act applies to federal income taxes. In 2013, again, people are concerned about whether the federal act will be renewed. Uncertainty abounds.

Unfortunately, there is one thing that we are certain about at this point in time: a foreclosure in 2013 could be very painful on your Minnesota state taxes. According to this MPR article:

If you’ve recently been in foreclosure, the state may tax you. That’s because many people technically receive income when their lender sells the house for less than is owed on the mortgage. 

 If you think that you might be in that situation, my advice to you is to contact your accountant as soon as possible. You also might want to consult with an attorney.

 

 

 

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My cliché “New Year, Fresh Start” post

It’s December, and that means family gatherings, kids being on break from school, painful commuting traffic due to snow (like today!), and… lots of Facebook posts, blog posts, and inspirational quotes about making resolutions for the upcoming new year. 

Although it’s cliché, there is something to be said for the feeling that comes – even the freedom that comes – from deciding that things are going to be different in the new year. It is common for people to put off tackling their major life decisions (in my profession the decisions I tend to hear about involve getting divorced or filing for bankruptcy) during the holiday season. Then, come January, they are ready to make those decisions and give themselves a “fresh start” for the New Year.

Not everyone will have major life-changing events occur in the next year – and that is a good thing.  Those who are sailing smoothly into 2014 can help support those who will be facing a more challenging 2014. I am not talking about financial support here , either. We can be patient with one another and try to be more understanding when someone seems like they are having a rough day. 

“Be kinder than necessary because everyone you meet is fighting some kind of battle.” 

- J.M. Barrie

My goal for the new year is to keep the above quote at the forefront of my mind. 

 

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Attachment Narrative Therapy

A couple of months ago, my daughter’s therapist said that she thought it might be useful for my daughter to do a few attachment narrative therapy sessions with me. As part of the process, I needed to write my own narrative that I would read to my daughter during the sessions. The therapist provided me with a framework, but not a lot of other details or ideas about what to write. I remembered, in the back of my mind, talking about doing something like it at the Adoption Education Classes we attended in the beginning of our adoption process. When I sat down to write my narrative, though, the first thing I did was use Google to see if I could find any examples. I found some examples that helped guide me in the process of writing my narrative. I decided that once we were done with our attachment narrative therapy, I would post a redacted version to my blog – in case there are any other parents out there using Google to find inspiration for their narrative.

I am leaving out the first and last sections of the narrative, as they are too personal to post. The narrative itself is not meant to offend or insult anyone; clearly it is very idealistic. Below is the main part of the narrative:

 

If you had been in my tummy from the beginning, things would have been different. I would have never drank as soon as I was even trying to get pregnant – I would never have had beer. I would have only had grape juice at Communion at church. During the whole pregnancy, I never would have drank. I never would have smoked. I would have had relaxing prenatal massages. I would have kept everything so peaceful and safe so the baby growing in my tummy – you –  would have felt peaceful and safe. I would have talked to that baby growing in my tummy and I would have rubbed my tummy and told that baby everyday how much I loved her and how I couldn’t wait for her to be born so I could meet her.

 

Dad and I would have been so excited to prepare your nursery. We would have painted it purple and had a zebra print comforter. Our friends and family would have thrown us baby showers and we would have had all of the things that we would need for you.

 

I would have taken prenatal vitamins and eaten healthy. I would have gone to the doctor for every possible check-up. I would have been so excited to see the ultrasound picture. I would have carried it around in my purse and I would have showed it to everyone – I would have said, “I am having a wonderful baby and I am so excited! Isn’t she beautiful?”

 

The day you were born would have been a beautiful and happy day. Dad would have been in the hospital room with me, holding my hand. And when you came out of me, Dad would have said, “It’s a girl! She’s so healthy! She’s so beautiful.” I would have cried tears of joy.

 

Once we got home from the hospital, I would have done everything I could to be the mom you needed. I would hold you all the time. Any time you would cry, I would run to make sure that you were okay. I would feed you, I would change your diapers, I would make sure that you took enough naps. I would worry about you all the time; I would always want to be doing everything I could to take the best and safest possible care of you. I would watch Arthur with you and feed you “real” food for the first time. I would have taken you to get your first haircut. I would have given you baths.  I would have dressed you in the cutest baby clothes ever.

 

Dad and I would have done everything possible to keep you safe. You would know that Dad and I loved you and that Dad and I loved each other and that we would always keep you safe.

 

Another part of the therapy process involved my daughter sewing a stuffed cat to her baby blanket so she could get in touch with her “baby self.” I got to carry the cat baby blanket around in public and pretend it was my baby. Not weird at all, right?  :-D

 

 

I am not a therapist, so I cannot go into huge amounts of detail as to “how” the attachment narrative therapy process actually works. I can tell you, though, that it was very helpful to my daughter. My daughter loves to hear me read that narrative, and she loves to daydream about having been in my “tummy.” I have watched my daughter try to bond with me a lot more since those sessions and I can feel her “attaching” more to me than she previously had. During the first session of attachment narrative therapy, though, I felt very awkward. I was really “putting myself” out there. I didn’t know if I would be laughed at, or if I would be rejected. It is similar to how I felt the first time I told my husband that I loved him – I felt nervous and “exposed.” When my daughter “warmed up” to the narrative and showed me that she felt good about it (she said it was “the best story she has ever heard”), it felt like someone telling  you that they love you for the first time – warm and dizzying. One of the best feelings that you can feel, I think.

Of course, because we live in the “real world,” things aren’t 100% perfect. The balance of our household sometimes feels a little off now, because this daughter is a lot “needier” and “clingier” now and my other daughter sometimes feels jealous. I also have to remind myself that loving someone with Reactive Attachment Disorder means that you are on a rollercoaster. The “highs” of feeling your daughter attach to you are so euphoric. However, I find myself being cautious, because the better the “highs” feel, the more the “lows” hurt. I know, though, that as my daughters’ “last mom” and their “forever mom,” I am on this “rollercoaster” for better or worse and that I need to “take in” all of the good moments to build up my spirit for the more difficult times. 

 

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How to resolve joint debts and protect yourself in a divorce

In my previous post, I discussed the unfortunate fact that your divorce decree will not change your contract with your creditors. In other words, if you and your ex-spouse were both jointly liable on a Visa credit card, the divorce decree saying that your ex-spouse is liable for the debt owed to Visa does not change the underlying contract with Visa, meaning: if your ex-spouse doesn’t pay Visa, Visa will very likely try to collect that debt from you. 

Here are some possible solutions to remove a party from a joint account:

1) New account with the same creditor. Sometimes, by talking to the creditor first, you can get them to issue a new account with just the liable (according to the divorce decree) party’s name on it. Creditors may not always be willing to do this, as it is obviously beneficial to them to have both of the joint debtors on the hook for the debt. However, some people have had success with this tactic.

2) Refinancing the debt. Find a creditor who is willing to refinance the outstanding debt into the liable (according to the divorce decree) party’s name. Be cautious in choosing this option that the payment terms (interest rate, number of monthly payments, amount of payments, etc.) are doable and that they make sense for you. It wouldn’t make sense to refinance from a 2% APR to a 12% APR if you didn’t have to, right?

3) Paying off the debt using marital assets. If the divorcing parties have enough assets to do so, the parties might choose to pay off their marital debts using their marital assets. That way neither party has to worry about the other party failing to make a payment on a joint credit account.

4) Extreme cases only: bankruptcy. Sometimes a divorcing couple will have a crippling amount of debt and at that point, it may make sense for one or both parties to file bankruptcy. In deciding whether to file an individual or joint bankruptcy and in deciding in whether to file before or after the divorce is finalized, it is important to know your spouse AND it is important to consult with both your divorce attorney and with a bankruptcy attorney.

Resolving joint debts is a common issue that comes up in a divorce. It is important to know your spouse and how reliable they are when it comes to paying their debts before agreeing to something that could negatively impact your financial future. Additionally, because some of the above options may not be available for all people, you will want to do research early on in your divorce. In other words, it doesn’t do any good to agree that each party will refinance the joint debts for which they are responsible (according to the divorce decree) into their own name if it turns out that neither party is actually able to do so due to having bad credit or due to lending practices at the time of the divorce. In order to resolve the joint debts in the way that makes the most sense and in a way that protects you, you need to know what options are available for you on each debt.

 

Elizabeth Rosar Chermack is a Minnesota Divorce and Bankruptcy Attorney, and can represent you in your case.   Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation.

 

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

 

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What happens to joint debts in a divorce?

I recently attended a CLE (also known as “lawyer school”)  called Mortgage and Divorce for Family Law Attorneys. David Jamison, from Wintrust Mortgage, was the presenter. One of the topics that was discussed was a topic that comes up often with divorcing couples: what happens to joint debts in a divorce? Often times, a divorcing couple will have several creditors to whom they owe money. For example, let’s say the divorcing couple has the following consumer debts:

- Target credit card $1,000

- Chase credit card $3,000

- Capital One credit card $4,000

In this case, the divorcing couple has $8,000 worth of consumer debt. For simplicity’s sake, let’s assume that the couple agrees that all $8,000 of that debt is “marital debt”, and let’s assume that both spouses are on each of the credit card accounts as a joint debtor.

During the divorce process, Spouse 1 agrees that they will pay the debt to Target and to Chase. Spouse 2 agrees that they will pay the debt to Capital One. Eventually (or maybe rather quickly) the divorcing couple comes to an agreement on all issues pertaining to their divorce, and they sign a Stipulation and their attorneys submit it to the CourtThe Judge signs a Judgment and Decree or a Divorce Decree (or what people often call their “divorce papers”) that orders Spouse 1 to pay Target and Chase and Spouse 2 to pay Capital One.

The question that people often ask me is: what happens to Spouse 1 if Spouse 2 does not pay? The answer is that unfortunately the Judgment and Decree  does not change the parties’ contract with the creditor. So, in this case, if Spouse 2 doesn’t make payments to Capital One, Capital One could still come after Spouse 1, even though the divorce decree says that Spouse 2 is obligated to pay. Additionally, Spouse 1′s credit score will likely be damaged by Spouse 2 not making payments to the creditor (Spouse 2′s credit score also won’t be looking good).

Spouse 1 will still have recourse. Spouse 1 can sue Spouse 2 in family court for not following the Judgment and Decree. Unfortunately, by the time that issue comes in front of a Judge, the damage may very well have already been done to Spouse 1.

In an upcoming post, I will discuss some proactive ways to prevent this from happening.

 

Elizabeth Rosar Chermack is a Minnesota Divorce and Bankruptcy Attorney, and can represent you in your case.   Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation.

 

ATTORNEY ADVERTISING MATERIAL. The content of this website is for informational purposes only and is not intended as legal advice. No attorney/client relationship is formed by use of this website. Do not submit confidential information via this site unless and until there is a signed retainer contract on file.

Posted in Bankruptcy Law, Family Law | 1 Comment

Triggers and Our First Family Portrait

Before we ever met our children, our social worker made sure that we read their child protection file. Although I will not go into great detail about the trauma that our children suffered before we met them, let’s just say that it was major trauma, and that our daughters have already lived through things that most people will never have to experience. Our social worker read their child protection file before she sent it to us. Before she sent it to me, she called me and told me that I would want to have a box of tissues at hand as  I read it. She also warned me that, based on the report, she thought that the movie Toy Story could be a possible trigger for our daughters. Ironically enough, I had bought a Buzz Lightyear nightlight from the clearance department at Target a week before.

I initially read the child protection file in my friend/colleague/mentor/part-time boss’s office. Don’t worry, I went “off the clock” to read it. It was very difficult to read. It made me sick to my stomach. It made me angry. It made me disgusted. I couldn’t believe that people (in particular the children’s biological mother) had allowed these beautiful and adorable children to be treated so poorly – and that she, herself, had treated them so poorly. I was saddened by how “the system” that was supposed to protect them had initially failed them and put them back into an unsafe situation. Anyone who has read their file (which is not many people – it’s not like we sent it out with our family’s Christmas letter or anything – but their therapists have read it) has said that our daughters are survivors and there is no doubt in their minds that our daughters have experienced trauma.

A common diagnosis for people who have experienced trauma is PTSD, or post traumatic stress disorder. Parents who have adopted children who have experienced neglect, trauma, and abuse, often talk about the “letters behind their children’s name” or the “alphabet soup of diagnoses” that our children have. Unsurprisingly, both of our children have PTSD. Through therapy and skills workers, and psychiatrists and county mental health workers, and (for one child) day treatment, we are treating our children’s “alphabet soup” which includes PTSD.

After our social worker told us to be careful about Toy Story being a trigger, I threw out the Buzz Lightyear nightlight I had bought the week before. I warned family members and friends not to mention Toy Story in their presence; after all, if my experienced social worker thought that Toy Story might be a trigger, then I thought it was important to avoid it at all costs. If only we knew then, what we know now. The thing about triggers is that they are not necessarily predictable. They are not always obvious. And, in our children’s case, Toy Story was not a trigger for them – not at all.

Proof that our daughters aren’t triggered by Toy Story – they wanted to wait forever to ride Toy Story Midway Mania at Disney World. I think we waited 2 hours or something crazy to ride that ride. We all got to wear matching 3D glasses too!

Instead, completely unpredictable things are triggers. Touching my daughter on the back of her head (I was trying to give her a reassuring pat on her back and missed) was a trigger one night and led to a meltdown, and then later on, it led to my daughter telling me a story (of abuse) from her past. Seeing hot sauce in a restaurant was a trigger. Being given bunny ears has been a trigger as it brings back a memory of one of my daughter’s bunny toys being used by a “bad guy” as an ash tray.

When our girls first found out about us, we gave them each a photo album so they could get to know their new family. In the back of the photo album, we put some pages (with room for pictures) of things we would do together in the future: Adoption Finalization Day, Adoption Finalization Celebration, and Our First Family Portrait.

The blank page in the girls’ photo albums

Our first summer as a family (last summer), we didn’t get around to taking family pictures. Then the school year happened, and all of a sudden it was summer again. Well, as we were going through our daughters’ rooms (to get them ready to paint) about a month ago, those albums made a reappearance into our lives. One daughter reminded us that we hadn’t done our “family portrait” yet. A couple of days later, one of my best friends from high school, who also happens to be a photographer, posted on Facebook that she was going to be in town and doing a limited number of portrait sessions. I decided it was time to tackle that family picture and get it done so my daughters’ photo albums would be complete.

Because my daughter had wanted family pictures to happen, and because she was the one who reminded me that we still hadn’t done them, I hadn’t spent a lot of time thinking that we might “get” to experience a meltdown as part of the family portrait experience. Silly silly me. Apparently, my daughter who has RAD and PTSD (the daughter who reminded us to do this photo session!) was very triggered by the idea of us (the adoptive family) doing family portraits. It wasn’t a horrific meltdown that we experienced, although it felt like my child took several steps backwards that night, behavior-wise. We experienced behaviors (physical aggression towards Mom & Dad)  from her that we hadn’t experienced since March and it was heartbreaking and disappointing. The bright side is that my daughter was able to verbalize her feelings of grief and loss (of her biological family) during therapy at day treatment, and with her skills worker, and with her EMDR therapist. The “not-so-bright side” is that Mom (me) is still hurting A LOT from that experience. 

Luckily, our photographer was amazing and patient and everything you could ever hope for in a family photographer, and she was able to work with us and get some wonderful family portraits that we will use to fill the blank page in our daughters’ photo albums. Thank you, Becca!

Our first family portrait – photo credit to Rebecca Jeanne Photography

 

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