Walker & Walker Fan Help You With A Fresh Start
When you file for bankruptcy, people often expect to make a few sacrifices. Sometimes if you have lots of equity in your house, then your cell phone isn’t protected in a Minnesota bankruptcy. Don’t worry, though, there are almost always ways to keep it, and the data on it will always be protected. After all, a smart phone is an absolute necessity in this day and age.
In order to help determine what sacrifices, if any, are necessary, your lawyer will work with you to make a list of everything valuable that you own. This list is called Schedule A/B. It has a category for listing all electronics, and the courts expect detail. For example, you should list “Iphone X,” it isn’t enough to put “Smart Phone.”
It is important to put everything down on this list, as if it is discovered later in the bankruptcy process by the bankruptcy trustee that you left something out, it may cause the case to be dismissed. Hiding assets in bankruptcy is always a bad idea.
However, many will leave their cell phone off their list simply because they need it for their everyday life, don’t want to lose it, and think it is small enough to not really matter. A good lawyer will catch this and make sure that it gets listed and that you get to keep your smart phone. Will they really cancel your cell phone contract after bankruptcy, though? A cell phone plan is called an executory contract.
Executory Contracts and Bankruptcy
A contract with a cell phone company will be categorized as an executory contract. Cell phone contracts and lease agreements are usually classified as executory contracts as it means that if both parties did not hold up their end of the contract, they would be in breach of contract. In this example, if you didn’t pay your cell phone bill or the contract holder did not provide cell phone service, both sides would be in breach of that contract.
Yet, even if you wish to keep your cell phone, all executory contracts still need to be disclosed on the bankruptcy petition, but that doesn’t mean it will be canceled. As long as you are up to date with paying your bill or even if you can bring it current, you will be able to continue the cell phone contract without issue.
As most executory contracts like leases or cell phones are so necessary in most cases, the court will have no problem with you keeping the contract if you are paying it.
The alternative is also true as well. If you are behind on your cell phone payments and want to cancel the contract, bankruptcy will allow you to do so without any early termination fees. This can be a good idea if you are locked into what is turning out to be an expensive contract. Furthermore, seeking a cheaper cell phone plan can be one of many steps that will allow you to gain control of your monthly expenses.
Once you have decided whether you want to keep your cell phone contract or use bankruptcy in order to terminate it, your bankruptcy lawyer can help you do so. Either decision will need to be declared on your bankruptcy petition. This will be the same for any other executory contracts that you hold as well.
What Happens Now?
The long and short of it is that, no, you probably won’t lose your cell phone or your contract if you file for bankruptcy. This means you should never leave any asset off your bankruptcy petition. If you are truly concerned about whether you will lose it or not, the best course of action is to bring it up with your bankruptcy lawyer.
A bankruptcy lawyer’s job is to guide you through the process, and this means giving you information and options that you can take.
If you have wild debt and seek relief through bankruptcy in order to get it under control, contact us today. The Walker & Walker Law Offices are dedicated to helping Minnesota get that debt under control and keep those creditors from banging your door down.