The 5 Main Reasons Minnesotan's File Chapter 7 or 13 Bankruptcy

Posted by Wesley Scott on June 1, 2017 at 1:52 PM
Wesley Scott

Why File Chapter 7 or 13 Bankruptcy In MinnesotaLet’s be clear, there are numerous causes of bankruptcy. Many times, there is no single reason that pushes someone to push the reset button on their life. We have been practicing bankruptcy law in Minnesota since 1972, we have seen a thing or two about what causes people to need to push the reset button and get their lives back.

Think of filing a Chapter 7 Bankruptcy in Minnesota like taking aspirin to get rid of a headache. If the aspirin gets rid of the headache, you take it. Same thing with overwhelming debt. If a bankruptcy solves the problem, you do it!

But, what if you wanted to know the 5 most common causes of a Chapter 7 and Chapter 13 Bankruptcy, here they are!


Do you think people start businesses hoping they will fail? Not even remotely close. People start businesses hoping they will succeed and produce profits. Unfortunately, for the vast majority of businesses that start, most of them fail within a short period of time. The dream turns into a nightmare with overwhelming debt as the parting gift.

I feel bad for people who give it a try and it fails. Do you know how many business men and women first fail before they succeed? Walt Disney filed bankruptcy before he made it big! But, when these businesses fail, they often leave lease obligations, unsecured debt, and bank loans in their wake. How is one to start over when you are burdened with this kind of debt?

As a policy, we want people trying to start businesses because when they succeed it is good for the economy. When they succeed they employ people who then use the money earned to buy goods which are made from people who earned a paycheck to make them and so on. When they don’t succeed, bankruptcy is a tool to right the ship and start over.


How many of us have suffered from an income drop over the years? Most of us that’s who. Think about it. If you are married and now divorced, you have an income drop. If you working overtime for 10 years and now it’s gone, you have suffered and income drop. If you were earning $20.00 and hour and you lost your job, but you found a job making $11.00 and hour, that is an income drop.

Sustaining your expenses with an income drop is really painful. Sometimes, the debt is simply too much to bear, and pushing the reset button on your life is what the doctor ordered.


I remember in college, going all four years, without health insurance. I couldn’t afford it. If I would have suffered even a mild medical emergency, I would have filed bankruptcy. Even if you have medical coverage, the coverage these days is horse crap. Large deductibles and co-pays along with maximum out of pocket expenses can put a wealthy person in the poor house. It shouldn’t be this way but it is.

The medical coverage today is worse than it’s ever been. And it’s not like you can help a medical problem can you? Good grief, how can you fight your genetic make up or an accident? Do people really enjoy being sick and needing health care? Of course not. And then when you get home, the bills are enough to send anyone into cardiac arrest. If you were not sick before, you will be now!


Can you imagine a world in which the first person you met you stayed with your whole life? YUK! Relationship breakups are a fact a life. Not everyone stays together. If you are living in Eagan, and you go through a divorce, even with a modest amount of credit card debt, you likely will be facing a bankruptcy.

If the credit card debt and unsecured loans don’t choke the horse, maybe your lawyer bills will. Getting a divorce cause you an income drop, duplicate housing expenses, and a host of other expenses. Even if you were once making lots of money and enjoying a great lifestyle, relationship break ups can change all of that in a hurry. Life is humbling.


How many of us have made bad financial decisions? Uhm- all of us. If you deny making bad financial decisions you are either dead or lying. I can name a number of financial moves I have made that were really dumb! I can think of many financial decisions I have made that could have resulted in a bankruptcy filing.

People come to us feeling bad and embarrassed but you shouldn’t. Anyone of us could be in the same situation. Why? Because we are human and we all make mistakes! This is not anything that is profound but people feel like they are the only ones when they are going through something like this. Trust me, you are not alone.


Some of our guests come to us with one cause that forced them into a bankruptcy. Many of our guests have 1 or more of these reasons that, taken together, have formed the storm that caused them to hit the reset button and file chapter 7 or chapter 13 bankruptcy. Whatever the reason that caused the bankruptcy, when the time is right, or when you are ready, reach out to Minnesota’s 24/7 Bankruptcy Help Line at On this site you will find all of the Minnesota bankruptcy information you will need to make an informed decision.

I am a tire kicker by nature. I like information. At we have many hundreds of articles and frequently asked and answered questions plus a lot of videos to make your learning experience more soothing and comforting.

Also, we have a chat box on our website that is manned during the day by one of our assistants. They can often answer many of your questions and put you at ease. Our team is paid and given reviews based on how well they are kind, helpful, professional, and provide exceptional customer service to you. Is this helpful to you? We think so.

Topics: MN Bankruptcy