The majority of individuals filing bankruptcy in North Dakota opt for Chapter 7 straight bankruptcy, in order to get a fresh start. Others want to retain their homes, family cars, small businesses, and other assets. Therefore, Chapter 13 offers the opportunity for payment restructuring and the chance to change financial fortunes, without losing any possessions.
Personal Bankruptcy in North Dakota
All states follow the U.S. Bankruptcy Code, Title 11, which allows North Dakota residents to file under Chapter 13 or Chapter 7 bankruptcy.
Chapter 7 Bankruptcy
To avoid those who take advantage of the court, a debtor is required to take a means test, to determine eligibility for Chapter 7 debt reliefs. Then, if any applicable assets can be resold to satisfy some of the debt, a trustee will take care of that process. Then, any other debts that are not mandated by law to be paid will be expunged. The debtor in effect gets a financial fresh start. The average income for single residents in North Dakota is $38,226, a two-person family is $53,389, and a three-person household is $67,644.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is for North Dakota residents that feel obligated to pay their bills and want to retain their assets. However, economical challenges require a little help to restructure payments to a more affordable amount. Creditors are consulted regarding the minimum amount needed to resolve the debt. Then, all applicable bills are calculated. A plan is mandated to pay off the debt within the next 3-5 years. So, as long as the debtor keeps all payments current, assets are retained. However, an individual can have no more than $1,010,650 in secured debts and $336,900 in unsecured debts, in order to qualify for Chapter 13 debt relief. (See more on Filing Chapter 13 in North Dakota).
Filing Bankruptcy during Foreclosure
For debtors that know foreclosure is around the corner, it is time to consult a bankruptcy lawyer regarding options available, in order to retain the property-if possible. Filing bankruptcy after foreclosure has been initiated usually only delays the inevitable. The lien holder can ask the court to lift the stay on the property, for resale purposes.
North Dakota Bankruptcy Exemptions
In North Dakota, there is a list of assets that are exempt from bankruptcy, if requested of the court. The following chart includes some of the items a debtor can keep:
Type of Asset(s)
Details on Applicable Exemption(s)
A house, trailer, mobile home, or real property up to $80,000
Fraternal and society benefits, life insurance proceeds for estate-not beneficiary, surrender value of life insurance policy up to $100,000, Keoghs, IRAs, ERISA, disabled vet benefits not exceeding $200,000
Business partnership property
Disabled vets-but not military retirement, ERISA and keoghs not to exceed $200,000, public employees
Bible and Books worth $100, church pew and burial plots, crops and grain grown on 160 acres, food and fuel for a year, old vehicle worth no more than $1200, $7500 cash-instead of homestead, $7500 each for personal injury or death compensation
Compensation for crime victims, workmen’s, and unemployment, Social Security, AFDC, and Vietnam vets compensation
At least 75% of unpaid wages
North Dakota Bankruptcy Court Filing Options
Use a Bankruptcy Lawyer
To ensure all legal issues related to bankruptcy are properly addressed, the service of a bankruptcy lawyer is necessary. With the high level of stress, paperwork, and consideration of details like exempt assets to consider, the debtor will greatly benefit from proper legal counsel. The legal and financial ramifications of self-representation are more often detrimental to the debtor’s case.
Use a Filing Service
Unfortunately, a filing service does not necessarily comply with the letter of law. In addition, no one is available to answer questions in court or provide legal advice. As a result, the court can throw the case out, and charge the debtor with fraud, if financial mistakes are in question.
File “Pro Se”
For the debtor that cannot afford legal representation, the case is filed pro se. However, unless the debtor has an extensive understanding of North Dakota bankruptcy law, the action is strongly discouraged. For the most favorable outcome, it is better to borrow the lawyer’s fees, and go to court with legal counsel.
Courts and North Dakota Bankruptcy Trustee Information
North Dakota District Court Main Office
476 Federal Bldg and
United States Courthouse
220 East Rosser Avenue
Bismarck, ND 58501