Bankruptcy in North Dakota
If you're struggling with debt and considering bankruptcy, don't go it alone. A mistake could cost you thousands or tens of thousands of dollars. After all, North Dakota native, Lawrence Welk, needed the Lennon Sisters; and, native, Angie Dickinson, needed Hollywood. It's okay if you need help as well.
In fact, if you are in financial distress, you are already not alone. For example, about 1.5 million bankruptcies were filed in the U.S. and 1,234 bankruptcies were filed in North Dakota in 2011.
This article is for you. We'll nutshell how North Dakota bankruptcy laws are unique and protect your property, the difference between Chapter 7 and 13 bankruptcies, how to select a bankruptcy lawyer, and how to prepare to work with your lawyer.
How North Dakota Bankruptcy Law is Unique
Because the procedure for filing bankruptcy is based upon federal law, it's the same from state to state. However, the amount of assets you can protect and still get bankruptcy relief varies from state to state.
This means that North Dakota bankruptcy exemptions are unique. Exemptions describe the property you can keep.
For example, you can keep your:
- $100,000 of equity in your home.
- Motor vehicle up to $2,950.*
- Clothes up to $5,000.*
- Personal property and crops and grain. The amount depends upon the exemptions claimed.*
*These exemptions are doubled for married persons, filing bankruptcy jointly.
Your Choices in Filing Bankruptcy in North Dakota: Chapter 7 or Chapter 13
1,234 North Dakota residents filed bankruptcy in 2011. Of those, 89% filed under Chapter 7. The remaining 11% filed under Chapter 13. Relief under both chapters end creditor harassment and offer you a fresh start.
Chapter 7 filers must pass the "means test" based upon income (and expenses, if income doesn't automatically provide qualification).
- You automatically pass the means test if your income is less than the state median income.
- For example, in North Dakota, an individual can make up to $44,309 and a family of four can have an income of up to $81,840.
- If you don't automatically qualify, consult with a bankruptcy attorney.
- Many North Dakota filers prefer Chapter 7 because credit card and medical bills are wiped out, meaning that they never have to be paid back. The entire process takes 6 months.
- Conversely, although some debts are discharged during Chapter 13, many are reorganized and repaid during a 3 to 5 year payment plan.
Ask your bankruptcy attorney which chapter of bankruptcy is right for you. Why? Just because you qualify for Chapter 7 doesn't mean it's the best fit.
How to Choose a Bankruptcy Attorney
To find attorneys, ask for referrals from:
- Friends and family
- Professional advisors
- Local bar association
- Internet search for "Find a North Dakota Bankruptcy Attorney"
Then, focus on those attorneys who:
- Are licensed in North Dakota
- Focus their practice on bankruptcy law
- Have experience
- Will get to know you during a no obligation consultation
From those attorneys, choose the attorney whom you trust and will feel comfortable asking questions as your bankruptcy case progresses.
How to Prepare to Work with a Bankruptcy Attorney
Pull together your financial documents including monthly bills and expenses, debts, assets, tax returns, contracts, and repayments made over the last year. In addition, write down any questions and ask them during your consultation.
Both North Dakota and federal bankruptcy laws and your bankruptcy attorney are available to help you. You are not alone.