Today’s Ask Your Government

Dear readers,

A Griggs County reader wrote me the following:

We really like this new addition to The Forum, with all the good questions and better answers. Excellent information. Thank you.

My question is about bankruptcy law and conditions concerning chapters 7, 11 and 13 and what we don’t see in the paper. More details please on where a person files for (bankruptcy), how often can be declared, what can or cannot be taken, returned or excluded from one and more. Thanks.” 

Thanks for writing! I talked to the Attorney General’s Office and their advice is to visit with a private attorney. I received similar advice from Aaron Birst, executive director of the North Dakota State’s Attorneys Association.

However, they did refer me to general information at www.uscourts.gov or, more specifically, the bankruptcy section. Here is some information straight from the site:

“Most cases are filed under the three main chapters of the Bankruptcy Code – Chapter 7, Chapter 11 and Chapter 13. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court.

“Some bankruptcy cases are filed to allow a debtor to reorganize and establish a plan to repay creditors, while other cases involve liquidation of the debtor’s property.

“Chapter 13 … is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a plan to repay creditors over time – usually three to five years.

“Chapter 11 … ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization.

“Chapter 7 … contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets.”

(On a related note here, I went to FindLaw.com, which lists property that a debtor usually has to give up and what property can usually be kept under Chapter 7 bankruptcy. For example, a second car or truck may not make the cut, but one can keep necessary clothing.

You can find those lists here. Like everyone else, the website advises talking to an attorney about this matter.)

Returning to bankruptcy information on www.uscourts.gov:

“The court will deny a discharge in a later chapter 7 case if the debtor received a discharge under chapter 7 or chapter 11 in a case filed within eight years.

“The court will also deny a chapter 7 discharge if the debtor previously received a discharge in a chapter 12 or chapter 13 case filed within six years … unless (1) the debtor paid all “allowed unsecured” claims in the earlier case in full, or (2) the debtor made payments under the plan in the earlier case totaling at least 70 percent of the allowed unsecured claims and the debtor’s plan was proposed in good faith and the payments represented the debtor’s best effort.

“A debtor is ineligible for discharge under chapter 13 if he or she received a prior discharge in a chapter 7, 11 or 12 case filed four years before the current case or in a chapter 13 case filed two years before the current case.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

E-mail politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, N.D. 58505.

Please include your name, town and a phone number to reach you for verification.

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