When folks think about bankruptcy, they often think about a Chapter 7 Bankruptcy. A Chapter 7 Bankruptcy is often referred to as the “fresh start” bankruptcy. The idea is to eliminate your debt and start over fresh! Each year, thousands of Minnesotans hit the “reset” button we call Chapter 7 Bankruptcy and get their lives back. But, what really is a Chapter 7 Bankruptcy and how do I get started?
A Chapter 7 Bankruptcy is a bankruptcy where the focus of the bankruptcy is on your assets. The idea is this, if your assets are what we call “exempt” you get to keep them and do with them as you wish just like now. If your assets are what we call “non-exempt” you must either purchase them back from a trustee or give the assets to a trustee in bankruptcy. Trustees really don’t want your non-exempt assets. What they really want is the money the assets represent. So trustees are charged with the responsibility of “liquidating” (selling) your non-exempt assets, and using the money from the sale to pay your creditors pro rata.
To the extent your debts don’t get paid off, your debts get wiped out or discharged, forever, tax free! Now this is a great deal! Now, in the vast majority of Chapter 7 Bankruptcy cases, debtors lose NO assets! That is right, in the vast majority of cases, debtors lose no assets—meaning they get to keep everything they own and the debt is discharged!
In a Chapter 7 Bankruptcy, debtors don’t make payments back to their creditors, the debts just get wiped out. Instead, the focus is on your assets and whether they are exempt or non-exempt.
When the time is right, or when you are ready, reach out to Minnesota’s OLDEST bankruptcy law firm at www.kainscott.com. You will be so thankful you did!