Creditors never want you to file bankruptcy. You may think you don’t have to file bankruptcy because creditors have no avenue to find your assets, but you may be wrong.
The Legal Process for Your Creditors
First, creditors ask a court to find that you owe them money. Sometimes this is not difficult because it is clear you didn’t pay the debt you owed.
After the creditor has a court order, or judgment, against you for a certain amount of money, the creditor will next ask the court to order you to provide financial information about your assets and liabilities to the requesting creditor.
If you fail to comply, the creditor will not give up. You may find yourself in serious trouble, even though you had perfectly acceptable alternatives.
Contempt for Failure to Provide Information
When you fail to provide financial information about yourself to the creditor, the creditor may seek a contempt of court citation, where you may be fined, jailed, or both.
First, the creditor requests a show cause hearing, asking the court to order you to show cause (or provide a legitimate basis) for failing to comply with the court’s order to provide information.
The creditor will simply file a short affidavit saying that you were ordered to provide information and failed to do so. The creditor will provide the court with a proposed order. All the court has to do is choose a date for the hearing and sign the order.
Next, the creditor must serve you with the court’s signed order directing you to show cause for your violation. This service of the Order to Show Cause upon you must be done personally, by either:
- handing the Order to Show Cause directly to you at any location, or
- leaving it with a person of suitable age and discretion residing at your usual place of abode.
The person who serves you must complete an Affidavit of Personal Service. This document must be completed and notarized.
All the forms the creditor needs in order to obtain this hearing can be found on the website for the courts of Minnesota under “Court Forms.” These forms are short and require little effort from the creditor.
The creditor will then need to file the a copy of the Order to Show Cause and the Affidavit of Personal Service with the court.
Maybe Bankruptcy is Right for You, Maybe there is an Alternative
As you can see, hiding isn’t often very effective. Whether you hide yourself, or you hide your assets, there may be serious consequences later. At first you may think all you have at stake is money, but it could quickly become your freedom.
So, first: NEVER IGNORE A COURT ORDER.
Second, TALK TO AN ATTORNEY AND SEE IF BANKRUPTCY IS THE BEST SOLUTION FOR YOU, OR, IF NOT, WHETHER SOMETHING CAN BE WORKED OUT WITH THE CREDITOR.