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                 To BIG City Problems."

"Small Town Attention....To BIG City Problems."
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Call to schedule a consultation 763-398-1676

So you think you need to file personal bankruptcy. Take a deep breath. While bankruptcy in most cases should be a last resort, it can give you a fresh start financially, removing the burden of debt and allowing you to rehabilitate your credit score.

The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13.

Chapter 7: Liquidation

What it is: Repayment of creditors through liquidation of non-exempt assets.

Pros: You can eliminate most unsecured debt in Chapter 7 bankruptcy (i.e. credit cards, medical bills, and personal loans). The process from filing to discharge usually moves quickly (3-4 months). Creditors are prevented from contacting you on pre-bankruptcy debt obligations during the pendency of the bankruptcy case.

Cons: Your credit cards will be cancelled and you may have to forfeit some of your property. Purchasing real estate will prove difficult for 2-3 years.  The bankruptcy will remain on your credit report for up to ten years.

Consider if: You meet the income requirements and don't have significant non-exempt assets.

Chapter 13: Adjustment of debts for individuals of regular income

What it is: Repayment of creditors through monthly disposable income.

Pros: In most cases you are able to retain all of your property, including non-exempt property. No further worries about creditor harassment, and interest stops accruing during the pendency of the repayment plan.

Cons: It takes great discipline to stick with the repayment plan.

Consider if: You’re living comfortably on your salary but have trouble making regular payments to your unsecured creditors. Would lose cherished property in a Chapter 7 bankruptcy.

If you're looking for qualified and trusted Minneapolis/St. Paul lawyers, please call our Golden Valley office at 763-398-1676 or fill out this quick form to schedule a consultation.

Informational Articles Disclaimer

This website features educational information based on general legal principles in Minnesota.  Specific legal advice is contingent upon the unique facts of each case.  Therefore, you should not rely only on this information for your particular legal issue.  Contact an attorney to obtain advice specific to your legal situation.  Read our full disclaimer.

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