There are many contributing factors that are associated with financial adversity. The most common reasons include heavy debt, divorce, sudden unemployment, illness, or home foreclosure.
In fact, the average credit card debt in North Dakota is a whopping $4,598 per person. In addition, foreclosure rates are also as staggering, one out of every 14,211 ND homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are probably struggling with other personal problems that come with dealing with debt. The fear of losing your automobile, home or your money can drain a person emotionally & physically. You have probably even considered Filing Chapter 7 or Chapter 13 Bankruptcy .
If you are thinking “Should I File Bankruptcy?” you are surprisingly not alone. Almost 1 million people file bankruptcy each year in the United States. Bankruptcy is a device provided by the US Government to help struggling Americans find relief from massive debt. You may want to consider bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy offers people the time to resolve their debt while still working with lenders in a legal capacity. It is initiated by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is settled, the filer will ‘exit’ with a fresh new start.
Throughout the bankruptcy, a trustee is appointed to oversee the deatils of the matter. His or her responsibilities differ and depend on whether the person has filed for Chapter 13 or Chapter 7 bankruptcy.
Did you know that North Dakota ranks #50 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 94 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
Individuals or couples in North Dakota, who claim bankruptcy, can choose to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Take a look at the descriptions below for more information:
The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.
Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation
A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year time frame.
In order to determine which type of bankruptcy a person will file, they will have to assess their ability to repay using the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:
- income and expenses
- household size and composition
- debt-to-income ratio
For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.
What Are Bankruptcy Exemptions?
The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
Unless otherwise noted, all law references are to the North Dakota Century Code.
- Real property, mobile home, or house trailer up to $100,000. Spouses may not double.
- Wearing apparel to $5,000; clothing; fuel and food to last 1 year; bible or other religious texts; books and schoolbooks; family pictures; church pew; burial plots; crops or grain raised on the debtor’s land, limited to 160 acres; insurance proceeds for exempt property.
- Motor vehicle up to $2,950 ($32,000 if modified for a physically disabled person); personal injury recoveries up to $15,000; wrongful death recoveries up to $15,000; health aids.
- The greater of the following: 40 times the federal minimum wage or minimum of 75% of disposable weekly earnings. Judge may approve more for a low-income debtor.
- Note: wage exemption cannot be used in bankruptcy.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- IRAS and Roth IRAs to $1,283,025.
- Disabled veterans’ benefits (does not include military retirement pay); annuities, pensions, IRAs, Keoghs, simplified employee plans up to $100,000 each. Together with the insurance exemption under this section total may not exceed $200,000. No limit however if needed for support.
- Public employees.
- Public employees deferred compensation.
- Social Security and Veteran’s disability benefits.
- Public assistance; crime victims’ compensation.
- Unemployment compensation.
- Survivor insurance and old age insurance program benefits.
- Workers’ compensation.
Tools of Trade
- Implements of trade, books, and tools to $1,500.
- Fraternal benefit society benefits; unmatured life insurance contracts except for credit life insurance.
- Life insurance proceeds payable to the decedent’s estate (not to a specific beneficiary).
- Life insurance surrender value to $8,000 per policy if the beneficiary is a relative of the insured and the policy has been in existence for more than 1 year before filing for bankruptcy. No limit if needed for support.
- Child support payments.
- $10,000 of any property in lieu of homestead.
- $7,500 of any personal property of the head of household.
- $3,750 of any personal property if unmarried with no dependents.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
You are not required by law to hire an attorney to declare bankruptcy. People are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not an easy task.
Filing Bankruptcy without an Attorney
A simple Chapter 7 case that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that may not require an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
Most of the time, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy lawyer is there to represent you and not in the interest of creditors.
An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in ND, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In North Dakota
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In North DakotaQuentin N. Burdick United States Courthouse
655 First Avenue North
North Dakota Bankruptcy Court
Additional North Dakota Resources
Foreclosure Help Program
Disability SSDI Benefits