North Dakota Bankruptcy Laws
The exemptions that Chapter 7 clients can take advantage of protect a number of types of property from liquidation. While both federal and state exemptions exist, North Dakota allows clients to claim only state exemptions, such as:
Homestead |
Up to $100,000 |
Personal Property |
Clothing; 1 year of food and fuel; burial plots; crops or grain raised on the debtor’s land; motor vehicles up to $2,950; personal injury or wrongful death recoveries up to $15,000; health aids; $3,750 in property for those single with no dependents and who don’t claim crops or grain |
Wages |
40 times the federal minimum wage or minimum of 75% of disposable weekly earnings, whichever is greater |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; disabled veterans’ benefits; simplified employee plans up to $100,000 each; total of pensions and insurance benefits cannot exceed $200,000 (no limit on that which is needed for support) |
Public Benefits |
Social Security; veterans’ benefits; public assistance; crime victims’ compensation; unemployment; survivor insurance and old age insurance benefits; worker’s comp |
Tools of the Trade |
Up to $1,500 of implements of trade, tools, and books |
Insurance |
Fraternal society benefits; some types of life insurance policies or proceeds |
Once the client weighs the benefits versus the consequences of filing bankruptcy, if they believe this is the financial solution for them, they must first undergo credit counseling before filing their bankruptcy petition. It is often a short, one- to two-hour consultation to ensure that they understand how they got into financial trouble and if there are alternative solutions for their circumstances. If the debtor chooses bankruptcy, their lawyer often files the petition with the court, which appoints a bankruptcy trustee to oversee the process.
- The trustee determines if any property needs to be liquidated and which debts can be discharged, or erased.
- The trustee holds a 341 meeting, as described in section 341 of the bankruptcy code, at which the debtor answers questions under oath concerning their finances and assets. Creditors are invited, but not required, to come and ask questions as well.
- The Chapter 13 client must have their repayment plan approved by the judge
- If the bankruptcy is approved, the client must attend debt education classes
- Eligible debts are discharged for the Chapter 7 client
The Chapter 13 client cannot have debts discharged until they complete their repayment plan, in three to five years.
|
