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Sam Calvert


Bankruptcy can be challenging for anyone, no matter the circumstances. There are a series of requirements and tasks that people have to get through. They have to make sure that they have all the necessary documents and paperwork. If they do not, they have to work on creating or compiling it. Additionally, there are several legal requirements that they have to get through, especially if there are clients or other investors. The rules vary in terms of the number of people involved, based on whether you file as an individual, business or large company. Bankruptcy for an individual and a company is not the same but does follow a similar framework, so it makes sense to talk to an expert to learn your next steps.

One of the challenges when filing for bankruptcy is that no one sees it coming, so they do not expect it. Additionally, most people do not know anything about the process, so they have no idea about the changes they should make to get through it. The most relevant requirement is to have a lawyer who worked on some of these cases in the past. They should be from the industry and know the ins and outs of the trade. Finally, they should be proactive about the process because there are deadlines for some of the requirements, and companies have to make sure they have their documents submitted at the right time.

With so much uncertainty about the process, we thought we should assist people and companies with their understanding of when and why they should file for bankruptcy. We put together a list of the most common mistakes they make when working on the process. The idea is to avoid them so they can get through without having any additional struggles. 

1. Waiting too long to file for bankruptcy

People cash in their retirement savings, borrow from relatives, and put a second mortgage on their home before they just accept the fact. They use this money to continue to pay credit cards in a desperate attempt to stay afloat. Eventually, they drain their retirement accounts, run out of relatives to borrow from, run through all the money from their second mortgage. Then they realize that their situation is hopeless, and then they come to see me. If they had come earlier, they could have kept their retirement account, wouldn’t owe their relatives money and would have a better position in their home.

2. Paying friends just before filing for bankruptcy

There is nothing illegal, immoral, or fattening in paying a relative. BUT, the bankruptcy law says that if you pay an “insider” (a relative or friend) as much as $600 within a year before you file bankruptcy in a consumer case, the trustee can go back to the person you paid and get the money back from that person. The trustee doesn’t care who you pay AFTER you file your case, so pay people like your mom that $1000 AFTER filing your case, never before!

3. Listing only some of your creditors

Many people think that bankruptcy is just for credit cards, but bankruptcy will discharge all sorts of debt. You can discharge all costs and back utility bills, unpaid rent, debts to your chiropractor, cell phone charges and other similar expenses when you file for bankruptcy. You cannot discharge a few specific bits of your debts, which is why we talk about your bills.

4. Believing that bankruptcy will ruin your credit forever

Bankruptcy will be on your credit report for up to ten years, but I see people getting perfectly routine home loans and other credit within a few years after filing for bankruptcy. It would be wiser to admit to bankruptcy and move forward from there. We notice many people and companies delay the process thinking that they would get through when they have well past the point of return. Connect with the right team of people to get through and receive the advice you need.

If you are looking for a bankruptcy attorney or a lawyer in St. Cloud, Minnesota, you should get in touch with Sam Calvert, Attorney at Law. I am open to representing people in financial distress and individual or small businesses. I am a Real Property Specialist, certified by the Real Property Section of the Minnesota State Bar Association. It would be beneficial to work with a lawyer who would hold your hand through the process so you do not have to worry about much else.

I offer a wide range of services, and you can click here if you want to get a better understanding of the ones that might benefit you. If you want to get in touch with me or think I can assist with a requirement or want a better understanding of the work that I handle, please click here.  

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