A common question your Eden Prairie MN Bankruptcy Law Firm is asked all the time is do I have to have a minimum amount of debt in order to qualify to file a bankruptcy in Minnesota? The phrase it’s all relative is quite appropriate in answering this question. To a millionaire, 10k is pocket change. To a person making $8.00 per hour, 10k might as well be a million dollars. If I had to guess what the average size of a person’s debt is who comes in to see us a bout possibly filing a bankruptcy case, I would guess it averages roughly $20,000.00. That doesn’t seem like a lot of money if you are making 100k per year but again consider what 20k worth of debt looks like if you pay check every two weeks is only $512.00!? The reality is this; the debt is too much if you are stressing about how you are you to make minimum monthly payments on the debt. Easy enough right? I mean, if you pay your reasonable and necessary monthly bills and have zero left over, making even the minimum payments is not going to work, something has to give and its time to call your Eden Prairie MN Bankruptcy Law Firm.
Years ago I filed a bankruptcy for a gentleman who only had 5k in debt! You naturally would ask why in the world Wes, would you file a bankruptcy for a person with only 5k in debt and your question would be a solid question. His name was Jerry, and Jerry came in to see me and told me this story: Jerry was disabled and his only source of income came from social security disability. His monthly income from social security was only $664.00 per month. Years before Jerry was disabled he had incurred 3k in credit card debt. He incurred credit card debt while he was working at a job and making $13.00 an hour full time.
When Jerry was injured on the job, he was forced out of his job and his only source of income became social security disability. When your making $13.00 an hour, 3k in credit card debt is not that big of a deal. But, when Jerry’s income dropped, he could not afford to make the payments on the credit card debt any longer. By the time he came in to see me, his 3k in credit card debt became a little over 5k in credit card debt.
I don’t have to tell you that when you earn $664.00 a month in income you have absolutely no excess income to contribute to credit card debt, at all. Do you think the credit card company would understand this and leave Jerry alone?
No, they would not. So, they sued Jerry and obtained a judgment against Jerry for over 5k with fees and costs. Jerry’s social security income was directly deposited into his checking account, the one he used to pay his monthly bills.
With the credit card company having a judgment against Jerry, they were now free to exercise their rights and try to collect from Jerry. But, how you ask? Jerry has only social security income and most people know creditors can’t take Jerry’s social security money right? While that is true, that creditors may not take a person’s social security income, that does not mean the creditor still can’t serve Jerry’s bank with a bank levy, freezing his account. You say, big deal, they still can’t take Jerry’s social security money right?
While that is true, here is what also is true. A bank levy is a process. Without notice to Jerry, the credit card company has the right to place a levy against his account. Once the account is frozen, Jerry has the right to contest the levy by stating that the funds in the account are exempt (protected from creditors). This assumes Jerry understands the levy forms and the levy process. If Jerry does not understand the forms and process, the bank will be instructed to turn the money over to the credit card company.
If, on the other hand, Jerry does contest the levy and apply an exemption to his social security money, the bank has the right to contest Jerry’s alleged exemption of the funds. See where this is going? It is not unusual for Jerry’s account to be frozen for weeks on end. Can Jerry live weeks on end without accessing the paltry $664.00 in his account to pay his bills and buy some food? Absolutely not.
For Jerry, a creditor freezing his account would be akin to darn near starvation for Jerry. Besides, his phones were ringing off the hook and he worried about what they said to him on the phone. The credit card company scared him. They told Jerry all sorts of bad things were going to happen to him if he didn’t pay them immediately.
When Jerry came in to see the Bankruptcy Attorneys in Eden Prairie, MN we sat down with him and listened to Jerry’s entire story. What at first appeared to me to be a case where maybe sending a letter to the creditor for Jerry quickly turned in to how can we resolve this problem for Jerry so his health doesn’t suffer any further from this. He said he couldn’t sleep at night and he constantly worried about the next thing the creditor was going to do to him.
I asked Jerry if he minded if Kain & Scott, P.A. in Eden Prairie filed a bankruptcy case for him pro bono (we would file the bankruptcy case for free). He thought about it, and I could tell he was getting a little emotional about it. He said that would be great. We filed a bankruptcy case for Jerry, asked the court to waive the file fee because of Jerry’s low income, which the bankruptcy court did, and now Jerry has his life back- free from this credit card company who constantly badgered him.
Now, Jerry no longer has to worry if the credit card company will freeze his accounts and what will he do if they do freeze his accounts. He can now focus on Jerry, his health, and his life. I am proud of Jerry for having the courage to face this debt problem and deal with his anxiety about filing a bankruptcy. After all, for most people 5k is peanuts for debt. But Jerry was not most people. He is Jerry and Jerry’s story is different than the rest of our stories.
What is your story?
If debt is causing you to worry, seek professional help from your Bankruptcy Attorneys in Eden Prairie, MN as soon as you can. At Kain & Scott is the nicest bankruptcy law firm in Minnesota guaranteed or 100% off your fees! As you can see from Jerry’s story, even a modest amount of debt is overwhelming depending upon your situation. If you ask Jerry, if you ask all of our current and former clients, they would all, in unison, tell you one thing: they waited too long to file bankruptcy and get their life back. Don’t be that person, don’t have regrets, meet with a kind and helpful professional today and get your life back, you will be glad you did.
Jerry still calls me to this day. He is doing well and I am happy for him. He still calls us because we build relationships with our clients, relationships that last for a lifetime. When our client’s receive their discharge, they receive a FREE ADVICE FOR LIFE CARD. They can call us for free once a month and speak to an attorney for 15 minutes- at no charge. This includes any topic by the way- while we don’t practice in any other area besides bankruptcy law, we can steer you in the right direction.
