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If you're thinking about filing for bankruptcy, you're probably wondering if you can keep your house, car, or any other item that you are making payments on, such as a boat, ATV, computer, etc.  The short answer is yes, but you have to get caught up (if you are behind) and keep making your regular payments on time and when due.  If you are leasing (renting) property, you have to get caught up and keep making your payments.

What I just said -- that you have to get caught up if you are behind and keep making regular payments -- applies to both Chapter 7 and Chapter 13 bankruptcy.  This article applies mainly to Chapter 7 bankruptcy, and not Chapter 13.  To learn more about your options for bankruptcy, please read my previous blog posts on the subject.  Here is a link:    
http://www.balandlaw.com/3/category/bankruptcy/1.html.

When you file for bankruptcy, the bankruptcy trustee (the person who is in charge of administering your bankruptcy) will take all of your property and sell it to pay your creditors, or the people you owe money to.  There are three basic ways to keep your property out of the hands of the bankruptcy trustee:

(1.) EXEMPT: Property that is exempt does not go to the bankruptcy trustee and does not become part of what is called your bankruptcy estate.  Your bankruptcy estate is all of the property that is not exempt and available to the bankruptcy trustee to pay your creditors.  The law provides that some property is automatically exempt,and does not become part of your bankruptcy estate.  You can decide whether to use the exemptions provided by federal law or state law.  For most people. federal exemptions are more appropriate, although there are good reasons to choose state exemptions.

Regardless of whether you choose the state or federal exemptions, you get to keep the clothes on your back, your "household goods and furnishings" (like your furniture, radio, television, etc.) up to a certain value, and a car (again up to a certain value).  These are only examples, and there are many more exemptions available.  For a full list, see 11 U.S.C. 522 and Minn. Stat. 550.37.

(2.) REAFFIRM: If you owe money and are making payments on a loan that is secured by an item of property, such as a car or house that the creditor (the person to whom you owe money), you can generally keep that property if it is exempt and you reaffirm the debt and agree to keep making your payments when they come due.  This happens most often when you are making payments on a car loan or mortgage, and want to keep the car or house.  So you reaffirm the debt, and promise to keep making payments on it in order to keep the property.

To reaffirm a debt, you sign a document called a Reaffirmation Agreement that is usually prepared by the creditor.  Every Reaffirmation Agreement must be approved by a judge, unless it involves real property.  Approval is not automatic, and a judge does not have to sign off on a Reaffirmation Agreement.

Sometimes, a judge does not approve a Reaffirmation Agreement, especially if you are trying to reaffirm a debt on something that is not practical, such as a boat, recreational vehicle, ATV (all-terrain vehicle).  Usually, if a Reaffirmation Agreement is not approved, the judge thinks it makes more sense for you to give up the property than keep it and keep making payments.  In such a case, I generally recommend contacting the creditor to see if the creditor will let you keep the property if you continue to make your payments.

(3.) BUY BACK: As a bankruptcy attorney, I try to find as many exemptions as possible to keep your property out of the hands of the bankruptcy trustee.  If, for whatever reason, a certain item of your property goes to the bankruptcy trustee, you can buy that property from the trustee and get the property back by paying the value of the property to the trustee.  For example, if you have a nonexempt item of personal property that goes to the trustee, you can pay the value of that property to the trustee to get the property back.

Baland Law Office, P.L.L.C. represents consumer debtors and small businesses in both Chapter 7 and Chapter 13 bankruptcy proceedings.  Please call (763) 450-9494 to schedule an appointment to discuss your situation today and find out whether declaring bankruptcy is the right option for you!

DISCLAIMER: Baland Law Office, P.L.L.C. is a debt-relief agency, and Timothy H. Baland, Esq. is a debt-relief agent.  We help people like you to obtain bankruptcy relief.

WARNING: The information contained in this article does not constitute legal advice and may not be applicable to your situation.  Reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  This blog post may constitute attorney advertising.  Further, Tim is licensed only in Minnesota state and federal courts, and the information that is provided here is applicable only to those jurisdictions.  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.


 
 
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Sometimes, an employer will give you a choice between resigning and being fired.  I don't envy anybody who has made the hard choice to resign or be fired.  If you have made that choice, you may be wondering if you are eligible for unemployment benefits.

Should you apply for unemployment benefits if you were forced to resign?  The short answer is yes, but you should be prepared to appeal if (and when) your application is denied.  For more information on unemployment appeals, see my earlier blog post on the subject.  Here is a link to the article: http://www.balandlaw.com/3/category/unemployment/1.html

The so-called "choice" to resign or be fired is really not much of a choice.  I bet that most workers would prefer not to have a termination on their employment record, and who can blame them?  However, this preference may make you ineligible for unemployment benefits.

The general rule is that you are eligible for unemployment benefits if you were discharged, unless you were discharged for employment misconduct, which is a violation of the standards of behavior that an employer has the right to reasonably expect.  Minn. Stat. 268.095, subd. 4.  However, if you quit employment, you are not eligible for unemployment benefits unless you had good reason to quit caused by the employer.  Minn. Stat. 268.095, subd. 1.

Minn. Stat. 268.095, subd. 3 defines a "good reason to quit caused by the employer" as a reason: "(1) that is directly related to the employment and for which the employer is responsible; (2) that is adverse to the worker; and (3) that would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment."  However, a "good reason to quit caused by the employer" does not exist if the reasons for the quit were caused by the employee's own employment misconduct.  Id.

The question is whether being forced to resign is a "good reason to quit caused by the employer."  The answer is that it depends.  The question of whether a termination is voluntary or involuntary is determined “not by the immediate cause or motive for the act but by whether the employee directly or indirectly exercised a free-will choice and control as to the performance or non-performance of the act.” Anson v. Fisher Amusement Corp., 254 Minn. 93, 98, 93 N.W.2d 815, 819 (1958); Wing-Piu Chan v. Pagoda, Inc., 342 N.W.2d 174, 175 (Minn.Ct.App.1984)

In other words, if you freely and voluntarily quit your job, UIMN is unlikely to determine that you had "a good reason to quit caused by the employer."  In determining whether a quit was voluntary, UIMN will look at the circumstances in which you quit.  If you were forced to resign because you committed employment misconduct by violating a standard of behavior that your employer had the right to reasonably expect, then you probably did not have a "good reason to quit because 

"[w]hen an employee, in the face of allegations of misconduct, chooses to leave his employment rather than exercise his right to have the allegations determined, such action supports a finding that the employee voluntarily left his job without good cause."

Ramirez v. Metro Waste Control Comm'n, 340 N.W.2d 355 (Minn.Ct.App.1983),

On the other hand, if you were forced to resign for reasons other than employment misconduct, then you may have a "good reason to quit."  The answer -- and outcome -- really depend on the facts of the situation.

Your best bet is to meet with an attorney who handles unemployment appeals to see if you have a "good reason to quit caused by the employer."  To that end, I represent both applicants and employers in unemployment appeals.  Please call (763) 450-9494 today to set up an appointment to discuss your situation.

WARNING: The information contained in this blog post does not constitute legal advice and may not be applicable to your situation.  Reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  Also, Tim is licensed only in state and federal courts in Minnesota.  As such, any information provided in this blog post pertains only to those jurisdictions.  Further, you should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.






 



 
 
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The short answer is yes, a small business can file for bankruptcy protection in the same way that a person can.  A small business can file either Chapter 7, Chapter 11, or Chapter 13 bankruptcy, depending on whether

(1.) the business is an incorporated legal entity (such as a corporation or limited liability company)

(2.) you want to continue operating the business after the bankruptcy

(3.) you are personally liable for corporate debts; and

(4.) the amount and nature of the business' debts.

Chapter 7 erases most debt right away, but ends the business.  In other words, the business ceases to exist as a legal entity, and all of its assets are sold and the proceeds distributed to creditors.  Chapter 13 is not available to incorporated entities, but may be available to sole proprietors and qualifying partnerships.  Chapter 13 puts you on a payment plan for a number of years.

With both Chapter 7 and Chapter 13, the business has to stop operating when the bankruptcy is filed.  Filing Chapter 11 allows a business to continue operating and restructure debt, but is usually too cost-prohibitive, time-intensive, and uncertain to be a viable option for small business.  Because Chapter 7 and Chapter 13 are more realistic options for small business, I'm not going to go into further detail about Chapter 11.   For more information on the different types of bankruptcy, please see my earlier article on bankruptcy in this blog.

Business owners sometimes sign personal guarantees for business debt.  This means that the business owner individually and personally promises to pay business debt in the event that the business does not.  In such a case, the owner may wish to consider filing for bankruptcy as well because, if the business gets rid of the debt by filing for bankruptcy, the creditor will try to collect payment from the business owner.

Baland Law Office, P.L.L.C. represents business debtors and business owners in both Chapter 7 and Chapter 13 bankruptcy proceedings.  If I think Chapter 11 is a better option for you, I will refer you to an attorney who specializes in Chapter 11.  Please call (763) 450-9494 to schedule an appointment to discuss your situation today and find out whether declaring bankruptcy is the right option for you!

DISCLAIMER: Baland Law Office, P.L.L.C. is a debt-relief agency, and Timothy H. Baland, Esq. is a debt-relief agent.  We help people like you to obtain bankruptcy relief.

WARNING: The information contained in this article does not constitute legal advice and may not be applicable to your situation.  Reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  Tim is licensed in Minnesota stat  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.