Minnesota bankruptcy
September 21, 2014 10:27 PM Subscribe
I am thinking of filing for bankruptcy - Chapter 7, as I am unemployed since February and have no assets. I have $0 in my bank account due to a levy by the Minnesota Dept of Revenue for 2013 taxes. (I have since talked to them and am in the process of getting that straightened out.) I have zero money, and if it weren't for the generosity of a good friend would be homeless. Are there any pro bono services in Minneapolis that can help me, or would filing myself (probably) be okay, as long as I follow the filing directions carefully (the MN bankruptcy court site has a pretty good page on what forms need to be filed, etc)? I don't have $1200+ to pay a regular attorney. Any advice appreciated. I'm completely overwhelmed and now afraid that any future job opportunities may be threatened due to the potential for garnishments, etc.
Hi,
I'm an attorney who works in Bankruptcy in California. You can fill out the forms yourself, and it can turn out fine, but I don't recommend it. Things can go very wrong in a bankruptcy, very fast, and I've seen it happen to people who try to do it themselves. I also, of course, see people do it themselves no problem. You can't pay an attorney though, so your best course of action is probably a no go.
I can't tell you what's going on in Minnesota, because I'm not familiar with it, but I bet it's pretty dang similar to California, so I'm going to give you the advice I would give to someone in California.
1) Don't be tempted by going with a paralegal service, if you're going to mess things up, you'll feel better if you messed it up yourself. Also you can play the "Dumb me, sorry" card if you ever end up in front of a bankruptcy judge. That looks a lot more sympathetic than the "I tried to save $700-ish and didn't go with an attorney".
2) Figure out which bankruptcy court you'd be filing in. You can do this by checking your local bankruptcy court's website, if you can't figure it out call the bankruptcy court's clerk and ask. They'll just need your address and they'll be able to tell you.
3) Go to the local law library and get their most updated NOLO book on BK. It should help you fill out most of the bankruptcy packet. Do what you can. Especially Schedule I and J. Some stuff (Schedule C and offical form 22A) is probably going to confuse you, no problem, work on the rest of the forms and wait till you have the pro bono attorney (see below) to help you with those.
4) Once you know what court you'll be in call up and ask if they have a "pro-bono lawyer's day." The California Courts are constantly bribing us with free MCLE and other educational opportunities in exchange for us doing 2 to 4 pro-bono hours sitting in the Federal Court and answering people's questions about their bankruptcy. I'd be flabbergasted if something like that doesn't exist in Minneapolis too. That's not enough time to do your petition (and you shouldn't hog all the lawyers time anyway, there will be other people who need help), but it's plenty of time to have them help you with the three or four places in the petition they can be the most help.
I suggest you get the attorney to help you with:
a) Should I go bankrupt? This is the most important thing an attorney can help you with. I often run into clients who shouldn't go bankrupt and whose lives would be ruined by filing chapter 7, but who should go bankrupt 90 days later and everything would be hunky dory. Unfortunately, this is going to be the hardest thing for one of these pro-bono attorneys to do, because it requires really getting to know the client, what's going on in there life, what their goals are, and what events might happen to them soon. It also often requires the client to do some pretty finicky (but perfectly legal) financial maneuvers. Are the debts you have the type that can be discharged in bankruptcy (Not all taxes can be, especially recent ones, so a bankruptcy might not do a thing for you);
b) Schedule C - Property Claimed as Exempt; and
c) Official Form 22A - Statement of Current Monthly Income and Means-Test Calculations.
No attorney is going to have trouble with either of those last two forms, you however, are unlikely to get them right. You can help the attorney make sure they're able to help you effectively by making sure you do the Schedule I and Schedule J ahead of time. They're not much more complicated than a 1040 EZ, so you should be able to handle them.
5) File a motion for relief from the filing fee. It probably won't be granted, but you'll likely be given a payment schedule of $25-$50 a month instead of having to dish out the $400-ish filing fee all at once.
6) Chill a bit. You can't be garnished now since you're not working, and starting a garnishment (unless you're behind on child support or taxes and the process is already underway) will take months. So you have time to work this out.
7) Look for a pro bono tax clinic too. Many law schools have them. I worked at one in law school and helped out poor people who had IRS woes. You can find out by calling your local law schools and asking if they have one. If they don't ask if any other law schools around there do.
If your tax debt is the only debt you have I would probably not recommend you go into bankruptcy, I would instead see about doing an offer in compromise with the Taxing entity (IRS or Local State or Franchise Tax Board or whoever they are).
Tax people want to collect money. If you don't have money they will sometimes say, "Ok, can't get blood from a stone. We'll drop the charge". The process by which they decide if they're going to do this is generally called an "Offer in compromise". And, yes, sometimes the compromise is $0.00.
Good luck.
posted by bswinburn at 12:54 AM on September 22, 2014 [16 favorites]
I'm an attorney who works in Bankruptcy in California. You can fill out the forms yourself, and it can turn out fine, but I don't recommend it. Things can go very wrong in a bankruptcy, very fast, and I've seen it happen to people who try to do it themselves. I also, of course, see people do it themselves no problem. You can't pay an attorney though, so your best course of action is probably a no go.
I can't tell you what's going on in Minnesota, because I'm not familiar with it, but I bet it's pretty dang similar to California, so I'm going to give you the advice I would give to someone in California.
1) Don't be tempted by going with a paralegal service, if you're going to mess things up, you'll feel better if you messed it up yourself. Also you can play the "Dumb me, sorry" card if you ever end up in front of a bankruptcy judge. That looks a lot more sympathetic than the "I tried to save $700-ish and didn't go with an attorney".
2) Figure out which bankruptcy court you'd be filing in. You can do this by checking your local bankruptcy court's website, if you can't figure it out call the bankruptcy court's clerk and ask. They'll just need your address and they'll be able to tell you.
3) Go to the local law library and get their most updated NOLO book on BK. It should help you fill out most of the bankruptcy packet. Do what you can. Especially Schedule I and J. Some stuff (Schedule C and offical form 22A) is probably going to confuse you, no problem, work on the rest of the forms and wait till you have the pro bono attorney (see below) to help you with those.
4) Once you know what court you'll be in call up and ask if they have a "pro-bono lawyer's day." The California Courts are constantly bribing us with free MCLE and other educational opportunities in exchange for us doing 2 to 4 pro-bono hours sitting in the Federal Court and answering people's questions about their bankruptcy. I'd be flabbergasted if something like that doesn't exist in Minneapolis too. That's not enough time to do your petition (and you shouldn't hog all the lawyers time anyway, there will be other people who need help), but it's plenty of time to have them help you with the three or four places in the petition they can be the most help.
I suggest you get the attorney to help you with:
a) Should I go bankrupt? This is the most important thing an attorney can help you with. I often run into clients who shouldn't go bankrupt and whose lives would be ruined by filing chapter 7, but who should go bankrupt 90 days later and everything would be hunky dory. Unfortunately, this is going to be the hardest thing for one of these pro-bono attorneys to do, because it requires really getting to know the client, what's going on in there life, what their goals are, and what events might happen to them soon. It also often requires the client to do some pretty finicky (but perfectly legal) financial maneuvers. Are the debts you have the type that can be discharged in bankruptcy (Not all taxes can be, especially recent ones, so a bankruptcy might not do a thing for you);
b) Schedule C - Property Claimed as Exempt; and
c) Official Form 22A - Statement of Current Monthly Income and Means-Test Calculations.
No attorney is going to have trouble with either of those last two forms, you however, are unlikely to get them right. You can help the attorney make sure they're able to help you effectively by making sure you do the Schedule I and Schedule J ahead of time. They're not much more complicated than a 1040 EZ, so you should be able to handle them.
5) File a motion for relief from the filing fee. It probably won't be granted, but you'll likely be given a payment schedule of $25-$50 a month instead of having to dish out the $400-ish filing fee all at once.
6) Chill a bit. You can't be garnished now since you're not working, and starting a garnishment (unless you're behind on child support or taxes and the process is already underway) will take months. So you have time to work this out.
7) Look for a pro bono tax clinic too. Many law schools have them. I worked at one in law school and helped out poor people who had IRS woes. You can find out by calling your local law schools and asking if they have one. If they don't ask if any other law schools around there do.
If your tax debt is the only debt you have I would probably not recommend you go into bankruptcy, I would instead see about doing an offer in compromise with the Taxing entity (IRS or Local State or Franchise Tax Board or whoever they are).
Tax people want to collect money. If you don't have money they will sometimes say, "Ok, can't get blood from a stone. We'll drop the charge". The process by which they decide if they're going to do this is generally called an "Offer in compromise". And, yes, sometimes the compromise is $0.00.
Good luck.
posted by bswinburn at 12:54 AM on September 22, 2014 [16 favorites]
Here's the schedule of bankruptcy advice clinics organised by the court--there's one every other week and "should I file for bankruptcy" is part of their remit. They've also got links for finding attorneys working pro bono.
posted by hoyland at 4:34 AM on September 22, 2014
posted by hoyland at 4:34 AM on September 22, 2014
Hi, I'm a Minnesota lawyer, but I'm not your lawyer and I'm not a bankruptcy lawyer. I can't provide you with legal advice (and am not qualified to do so as I don't know bankruptcy law), but I can give some advice on how you could find legal advice.
With that out of the way, I came in to recommend the same clinic that hoyland identified. I volunteer at a different clinic run by Volunteer Lawyers Network (VLN) and I think the organization does a nice job given its limited resources. You'll only get a short visit with a bankruptcy lawyer each time you visit, but you can use subsequent visits for different purposes. Your first visit (or visits) could be to discuss whether to declare bankruptcy and later visits could be to have them help you fill out forms or check that you've filled out forms correctly.
This page also says VLN offers free Chapter 7 bankruptcy advice over the phone. I'm guessing you call the number (612-752-6677) and schedule something with them as they likely don't have bankruptcy lawyers just standing by waiting for calls. That same number is also their general intake number, so you could also ask about a tax law clinic if you need advice on that issue. In addition to whatever VLN can recommend, the University of Minnesota Law School also has a tax law clinic. Their intake number is (612) 625-5515.
posted by Area Man at 6:27 AM on September 22, 2014 [3 favorites]
With that out of the way, I came in to recommend the same clinic that hoyland identified. I volunteer at a different clinic run by Volunteer Lawyers Network (VLN) and I think the organization does a nice job given its limited resources. You'll only get a short visit with a bankruptcy lawyer each time you visit, but you can use subsequent visits for different purposes. Your first visit (or visits) could be to discuss whether to declare bankruptcy and later visits could be to have them help you fill out forms or check that you've filled out forms correctly.
This page also says VLN offers free Chapter 7 bankruptcy advice over the phone. I'm guessing you call the number (612-752-6677) and schedule something with them as they likely don't have bankruptcy lawyers just standing by waiting for calls. That same number is also their general intake number, so you could also ask about a tax law clinic if you need advice on that issue. In addition to whatever VLN can recommend, the University of Minnesota Law School also has a tax law clinic. Their intake number is (612) 625-5515.
posted by Area Man at 6:27 AM on September 22, 2014 [3 favorites]
After some further googling, I also see that the University of Minnesota has a bankruptcy clinic. Their intake number appears to be the same one as for the tax clinic mentioned above (612-625-5515). So, it appears that's the general intake number for all the U's clinics. Unlike VLN, I don't have personal experience with the U's clinics, but as a general matter you would be receiving advice from law students who are working under the supervision of their professors.
posted by Area Man at 6:53 AM on September 22, 2014 [1 favorite]
posted by Area Man at 6:53 AM on September 22, 2014 [1 favorite]
Calling the VLN is the best way to get to the University of Minnesota Law School clinic. At least it was when I was a clinic student.
Although I wasn't in the Bankruptcy Clinic, my experience with its students and supervising attorneys was always positive. I found them to be very hard-working.
posted by Handstand Devil at 4:07 PM on September 24, 2014 [1 favorite]
Although I wasn't in the Bankruptcy Clinic, my experience with its students and supervising attorneys was always positive. I found them to be very hard-working.
posted by Handstand Devil at 4:07 PM on September 24, 2014 [1 favorite]
This thread is closed to new comments.
posted by DarlingBri at 11:07 PM on September 21, 2014