Do I make too much money to file for Chapter 7 bankruptcy? The primary factor to determine chapter 7 eligibility is your income compared to the state's median income (the "means test."). If you make below the median income listed below, you "pass" the means test, and are much more likely to be eligible for a chapter 7 bankruptcy. If you make above the median income, you still may be able to qualify for chapter 7, depending on what your expenses are. The current income numbers for Minnesota residents are: (Updated April 1, 2023) HOUSEHOLD SIZE HOUSEHOLD ANNUAL INCOME 1. $71,643 2. $90,946 3. $114,267 4* $141,324 *For each additional household member, add $9,900 Do I make too much money to file for Chapter 13 bankruptcy? No. There are no income guidelines for chapter 13 eligibility. Will I lose any of my assets if I file for Bankruptcy? The Bankruptcy Code allows individuals to keep enough of their property to be able to obtain a fresh start after their case is filed. In most cases, this means individuals are able to keep all their property. For example, if you own a house, Minnesota law allows you to keep up to $450,000 in equity for a homestead. Will I have to pay tax on the debts that were discharged in bankruptcy? That is a great question, and the answer is NO! Unlike other types of debt forgiveness, debts discharged in bankruptcy are excluded from gross income for tax purposes. This is federal law, no matter what state you live in. See 11 U.S.C. 108(a)(1)(A) (discahrge of debts in a title 11 case). Also, the current version of Form 1099-C states on the reverse side that debts cancelled in bankruptcy are not included in your income. What if I filed for bankruptcy before, can I file now and discharge my debts? You can file another bankruptcy, but to get a discharge you need to make sure enough time has passed since the previous one. These rules apply only if you received a discharge of debts in the previous bankruptcy. If your previous bankruptcy did not end in a discharge, you probably don’t need to wait: -If you are considering filing a chapter 7 now and have a prior chapter 7, you have to wait 8 years from when the previous chapter 7 was filed. -If you are considering filing a chapter 7 now and have a prior chapter 13, you generally have to wait 6 years from when the previous chapter 13 was filed, but there are a few exceptions where you can file sooner. -If you are considering filing a chapter 13 now and have a prior chapter 7, you have to wait 4 years from when the previous chapter 7 was filed. -If you are considering filing a chapter 13 now and have a prior chapter 13, you have to wait 2 years from when the previous chapter 13 was filed. If a creditor has a judgment, can I still discharge that debt in bankruptcy? Yes (unless the judgment is for child support, spousal maintenance, taxes or a student loan). A judgment creditor’s debt is discharged along with your other debt. This office also handles the removal of the judgment from your record. Is there a credit counseling requirement in order to file for Bankruptcy? Yes, If you decide to file bankruptcy, the law requires that a credit counseling briefing must be done either in person, online or over the phone. There are some exceptions to this requirement, but the exception is limited to narrow circumstances. The credit counseling briefing must be administered by an agency approved by the Bankruptcy Court. It generally takes about an hour and costs about $20-25 depending on the credit counseling agency selected. If you are considering bankruptcy, it is best to meet with an attorney before doing the credit counseling to make sure bankruptcy is your best option before spending the time and money on the credit counseling.

Do I make too much money to file for Chapter 7 bankruptcy? The primary factor to determine chapter 7 eligibility is your income compared to the state's median income (the "means test."). If you make below the median income listed below, you "pass" the means test, and are much more likely to be eligible for a chapter 7 bankruptcy. If you make above the median income, you still may be able to qualify for chapter 7, depending on what your expenses are. The current income numbers for Minnesota residents are: (Updated April 1, 2023) HOUSEHOLD SIZE HOUSEHOLD ANNUAL INCOME 1. $71,643 2. $90,946 3. $114,267 4* $141,324 *For each additional household member, add $9,900 Do I make too much money to file for Chapter 13 bankruptcy? No. There are no income guidelines for chapter 13 eligibility. Will I lose any of my assets if I file for bankruptcy? The Bankruptcy Code allows individuals to keep enough of their property to be able to obtain a fresh start after their case is filed. In most cases, this means individuals are able to keep all their property. For example, if you own a house, Minnesota law allows you to keep up to $450,000 in equity for a homestead.

Will I have to pay tax on the debts that were discharged in bankruptcy? That is a great question, and the answer is NO! Unlike other types of debt forgiveness, debts discharged in bankruptcy are excluded from gross income for tax purposes. This is federal law, no matter what state you live in. See 11 U.S.C. 108(a)(1)(A) (discahrge of debts in a title 11 case). Also, the current version of Form 1099-C states on the reverse side that debts cancelled in bankruptcy are not included in your income. What if I filed for bankruptcy before, can I file now and discharge my debts? You can file another bankruptcy, but to get a discharge you need to make sure enough time has passed since the previous one. These rules apply only if you received a discharge of debts in the previous bankruptcy. If your previous bankruptcy did not end in a discharge, you probably don’t need to wait: -If you are considering filing a chapter 7 now and have a prior chapter 7, you have to wait 8 years from when the previous chapter 7 was filed. -If you are considering filing a chapter 7 now and have a prior chapter 13, you generally have to wait 6 years from when the previous chapter 13 was filed, but there are a few exceptions where you can file sooner. -If you are considering filing a chapter 13 now and have a prior chapter 7, you have to wait 4 years from when the previous chapter 7 was filed. -If you are considering filing a chapter 13 now and have a prior chapter 13, you have to wait 2 years from when the previous chapter 13 was filed. If a creditor has a judgment, can I still discharge that debt in bankruptcy? Yes (unless the judgment is for child support, spousal maintenance, taxes or a student loan). A judgment creditor’s debt is discharged along with your other debt. This office also handles the removal of the judgment from your record. Is there a credit counseling requirement in order to file for Bankruptcy? Yes, If you decide to file bankruptcy, the law requires that a credit counseling briefing must be done either in person, online or over the phone. There are some exceptions to this requirement, but the exception is limited to narrow circumstances. The credit counseling briefing must be administered by an agency approved by the Bankruptcy Court. It generally takes about an hour and costs about $20-25 depending on the credit counseling agency selected. If you are considering bankruptcy, it is best to meet with an attorney before doing the credit counseling to make sure bankruptcy is your best option before spending the time and money on the credit counseling.