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Understanding Bankruptcy in North Dakota – 3 Mistakes to Avoid When Filing


Bankruptcy in North Dakota is intended to give debtors a second chance after incurring significant debt. Bankruptcy can be a difficult process, but a good attorney in North Dakota can assist you with the bankruptcy from start to finish. However, here are some common mistakes to avoid when going through the bankruptcy process:

Bankruptcy in CourtDischarging Student Loans

North Dakota is the only state in the United States that owns a state-operated bank. The Bank of North Dakota provides short-term loans, student loans, bond financing, and direct lending to private borrowers. In fact, the Bank of North Dakota provided the first federally insured student loan in the United States in 1967.

Any student loans given by the Bank of North Dakota, like all banks in the United States, are non-dischargeable. This means student loans cannot be eliminated through bankruptcy. Student loans were made non-dischargeable through the federal Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005. If most of your debt is made of student loans, it may not be worthwhile to file for bankruptcy. Consider speaking with a bankruptcy attorney if you have any questions about filing for bankruptcy with student loans.

Hiding Assets

Bankruptcy is a privilege, not a right. Debtors are to be completely honest when disclosing their assets. One of the biggest mistakes a debtor can make during bankruptcy is hiding an asset or failing to disclose the existence of a property. A debtor who fails to make a legal disclosure could be denied their bankruptcy discharge or have their bankruptcy filing dismissed altogether. If you have questions about what assets to disclose, consult a bankruptcy attorney today.

Giving Away Your Assets Before Filing for Bankruptcy

A common mistake some debtors make is to give all their cash or property away prior to filing for bankruptcy. Some debtors do it to hide assets from the court (see above for why that’s a terrible idea). Other debtors want to pay back certain people they owe, typically their friends or family, first. However, the bankruptcy code has a specific list of creditors who are to be paid first. Giving assets to friends or family, even if well-intentioned, is a potential violation of the law. Failing to disclose that these assets were given away may also lead to dismissal of the bankruptcy filing. If you have questions about what assets to hold onto, be sure to speak with a bankruptcy attorney.

Do I Need a Bankruptcy Lawyer in North Dakota?

Bankruptcy is a huge decision that will impact not only your finances but also your personal life. While it can be beneficial, there will likely be some negative consequences, including damage to one’s credit and potentially reputation. With the advice of a North Dakota bankruptcy lawyer, the benefits may outweigh the costs, but only a lawyer can provide the legal advice to obtain the most advantage from filing for bankruptcy.


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