Bankruptcy law covers the various rules and procedures that individuals and/or entities are required to comply with when filing for bankruptcy. Bankruptcy law also provides specific guidelines for each chapter of bankruptcy, contains regulations on property exemptions, and dictates if debts can be discharged, may only be reduced, or are non-dischargeable.
Some important bankruptcy laws that manage various aspects of bankruptcy cases and/or filings include the following:
- Article I, Section 8 of the Constitution of the United States;
- The U.S. Bankruptcy Code of 1978 and its amendments;
- The Federal Rules of Bankruptcy Procedure; and
- The local rules for each federal bankruptcy court.
In addition to having to follow all of these complicated laws and procedures, deciding whether to file for bankruptcy is not the easiest of decisions. It requires assessing all of your property and assets, as well as determining whether you are even eligible to file for bankruptcy. Those filing for bankruptcy will also need to take into account the possible implications. Thus, if you are considering filing for bankruptcy, you should speak to a bankruptcy lawyer first.
Where Do I File Bankruptcy in North Dakota?
Persons filing for bankruptcy in North Dakota will need to submit their documents to the U.S. Bankruptcy Court for the District of North Dakota. Specifically, this court is located in downtown Fargo, North Dakota, and is situated in the Quentin N. Burdick U.S. Courthouse.
An individual may file for bankruptcy by completing the proper forms and filing them with the court clerk. Alternatively, an individual may also hire a local bankruptcy attorney to file the paperwork on their behalf.
What’s the Difference Between Business and Personal Bankruptcy?
There are several differences between business and personal bankruptcy. For example, personal bankruptcy is typically reserved for individuals who either cannot repay or are currently struggling to pay off their existing debts. Personal bankruptcy, which is sometimes referred to as consumer bankruptcy, also usually involves filing a petition for Chapter 7 or Chapter 13 bankruptcy.
In contrast, business entities, such as corporations, will file a petition for either Chapter 7 or Chapter 11 bankruptcy if they are involved in a business bankruptcy case. While this is the same Chapter 7 bankruptcy petition that is used for individuals, the end results will not be the same for a business that is declaring Chapter 7 bankruptcy.
For instance, when an individual files for Chapter 7 bankruptcy, it means that they will likely be forced to sell off all their assets to pay down their debts until there is nothing of value left to sell. The bankruptcy court will then be permitted to discharge any remaining debts. On the other hand, when a business entity files for Chapter 7 bankruptcy, its debts will not be discharged like an individual, but rather it will lead to the dissolution of that business.
Businesses often tend to file for Chapter 11 bankruptcy, as opposed to Chapter 7 or Chapter 13. Although individuals can file for Chapter 11 bankruptcy as well, it is usually much more expensive and complicated than filing for Chapter 7 or Chapter 13 bankruptcy. The reason why businesses file for Chapter 11 is so that they will have more time to pay off creditors.
Additionally, when businesses file for Chapter 11 bankruptcy, it usually leads to restructuring the indebted business and creating a bankruptcy reorganization plan. This is a better alternative for businesses than having to sell or dissolve the entire business and starting over again from scratch once they have the funds to open a new business.
Another difference between business and personal bankruptcy is that individuals will need to perform the means test to determine whether they should file for Chapter 7 or Chapter 13 bankruptcy. A business will not need to perform the means test to file for Chapter 11 bankruptcy.
Lastly, businesses can negotiate with creditors to cancel or pause their contracts. An individual will not be allowed to terminate certain contracts under federal bankruptcy laws, such as contracts for student loan debt.
Will I Have to Go to a North Dakota Court to File Bankruptcy?
Whether a debtor will need to physically travel to a bankruptcy court located in North Dakota or not, will largely be contingent on the chapter of bankruptcy that a debtor is filing for and the local rules of a bankruptcy court in a particular county. At present, North Dakota only has one federal bankruptcy court in the entire state.
Generally speaking, debtors filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy will normally not have to appear in court simply to file paperwork. They may hire an attorney to file a bankruptcy petition on their behalf.
A debtor will need to appear in court, however, if there is a dispute over a debt or if an objection is filed against their paperwork. It is also mandatory for a debtor to appear in court to attend the 341 meetings of the creditors. This meeting is scheduled after a debtor files a petition for Chapter 7 bankruptcy.
Additionally, those filing for Chapter 13 bankruptcy will need to appear in court to attend their plan confirmation hearing. This hearing is required because it is where the debtor will have their Chapter 13 repayment plan approved by a judge who presides over cases in bankruptcy court.
What Types of Papers Do I Need to Prepare for a North Dakota Bankruptcy Filing?
The types of papers that an individual will need to prepare for a North Dakota bankruptcy filing will primarily depend on the chapter of bankruptcy they intend to file. For instance, the forms needed to file for Chapter 7 bankruptcy as an individual debtor, will differ from the forms required for businesses to file for Chapter 11 bankruptcy.
Some examples of documents that a debtor may need to obtain in order to prepare for a bankruptcy filing in North Dakota include:
- For individuals, proof that they attended credit counseling within 180 days before they filed for bankruptcy (usually in the form of a certificate issued by the credit counseling agency conducting the program).
- A voluntary bankruptcy petition that corresponds with the correct chapter of bankruptcy, as well accurately provides whether the debtor is filing as an individual or as a married couple with a joint petition.
- A list of all property, assets, debts, creditors owed, property exemptions, and/or other liabilities. It should be noted that each one of these categories may require different forms.
- A summary of monthly or recurring expenses, the debtor’s income, and any relevant financial statements.
- A draft of a debt repayment plan if filing for certain chapters of bankruptcy.
- Forms regarding waivers of filing fees or to pay filing fees in installments (if applicable).
- Debtors should also be prepared to pay the following filing fees:
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- $338.00 for Chapter 7 bankruptcy,
- $1738.00 for Chapter 11 bankruptcy,
- $313.00 for Chapter 13 bankruptcy, and
- So forth. The filing fee schedules for the remaining chapters of bankruptcy can be found on the U.S. Bankruptcy Court website for the District of North Dakota.
What Are Some other Legal Considerations When Filing for Bankruptcy in North Dakota?
There are a few other legal considerations that one should take into account when filing for bankruptcy in North Dakota. For instance, each state has its own rules regarding certain types of property and/or assets that may be exempt in bankruptcy cases. These rules are known as bankruptcy or property exemptions, and if applicable, they may help protect a debtor’s property from being seized by creditors.
So, for example, residents who file for bankruptcy in North Dakota will be able to claim up to $5,000 in clothing under the state’s personal property exemption. This means that a North Dakota resident can protect up to $5,000 of their own or their family members’ apparel from being taken and sold by creditors in order to pay down their debts.
Clothing is not the only type of property that may qualify for an exemption in North Dakota. Thus, a debtor may want to consult a bankruptcy lawyer who practices in North Dakota to learn more about state property exemptions and whether there are any that they can apply towards their own property to prevent it from being seized and sold.
In addition, some other factors that an individual who is filing for bankruptcy in North Dakota may want to think about beforehand include:
- Whether they are filing for bankruptcy as an individual or with their spouse as a joint married couple. Oftentimes, persons who file for joint bankruptcy can receive larger exemptions. However, there are caveats to filing as a joint couple as well, which a bankruptcy lawyer will be able to offer further guidance on.
- The chapter of bankruptcy they intend to file a petition for (e.g., Chapter 7, Chapter 11, Chapter 13, etc.).
- If it is a business that is in danger of going bankrupt for failing to pay off their debts, whether it is only the business that needs to file for bankruptcy or if the owner is also required to file separately, but for personal bankruptcy instead.
- Finally, given the serious ramifications of declaring bankruptcy, the process should only be used as a last resort. Thus, a debtor should make sure that there are truly no other options available and that they have exhausted every means to settle or pay down their debts.
Should I Hire a North Dakota Bankruptcy Lawyer for Assistance?
Filing for bankruptcy generally requires having a strong grasp of the overall bankruptcy process as well as both federal and state-related bankruptcy regulations. You will also need to know which chapter of bankruptcy to file for, whether there are any special procedural rules for the type of bankruptcy you want to declare, and if there are any property exemptions in North Dakota that you can apply to protect some of your property or assets from being seized.
The bankruptcy statutes in North Dakota are particularly complex; especially, when it comes to property exemptions. Unlike other jurisdictions, North Dakota does not allow individuals to choose between its own property exemptions or the ones provided under the federal bankruptcy statute. Instead, North Dakota has created its own list of exemptions, which can be quite difficult to interpret without the help of a legal expert.
Therefore, if you need assistance with filing for bankruptcy in North Dakota or have any questions regarding the bankruptcy process in general, then you should strongly consider hiring a North Dakota bankruptcy lawyer for further legal advice. A lawyer who has experience in handling bankruptcy cases in North Dakota will be able to answer any questions you may have about the bankruptcy process.
Your lawyer can also explain the differences between the various chapters of bankruptcy and will be able to advise you on which chapter of bankruptcy may be best suited to you based on your unique financial circumstances. In addition, your lawyer can perform legal research to determine whether there are any properties or assets that may be exempted under state law, and if so, can make sure that you properly claim those exemptions.
Finally, if you wish to have a legal representative present at either your bankruptcy hearing or during your 341 meeting of the creditors, your lawyer will be able to provide representation at these proceedings as well. Your lawyer can also assist you in negotiating terms with your creditors before your debts become overwhelming, meaning that you may not even need to file for bankruptcy if you resolve your debt issues in time.
