Don’t have any idea how bankruptcy works or what it can do for you? You’re not alone – many of our clients tell us during their free initial consultation that all they know about bankruptcy is that it is a way to get rid of debt, but are unsure how bankruptcy works and how it will affect their lives.For more information on how Minnesota bankruptcy works (and works for you), read on to discover the answers to some of our clients’ most frequently asked questions.
What is bankruptcy?
Consumer bankruptcy is a government-backed way for individuals to eliminate some types of debt. The process involves filing a petition and attending a meeting of creditors with a bankruptcy trustee (also known as a 341 meeting) about six weeks or so after the case is filed; after that meeting your bankruptcy case will be discharged. If your petition is approved, the amount of time it will take before your debts are discharged depends on the type of bankruptcy you file (see below).
What kind of debt can be discharged?
Your personal obligation to pay debts are discharged in a bankruptcy. For unsecured debt, that means that the debt will be discharged and you will have no obligation to pay. Secured debt is different: while your personal obligation to pay a mortgage or a car loan is discharged through the bankruptcy case, secured creditors do not lose their security interests. So in order to keep your house or your car, you will have to make the payments, as scheduled to you secured creditors.
What are the different types of bankruptcy?
The two most common types of bankruptcy are Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is a liquidation bankruptcy that gives you a fresh financial start. Under Chapter 7, some of your non-exempt assets may be sold to pay off your debts, while other property is protected (exempt) and can’t be sold (what property is exempt versus non-exempt depends on both state and federal law). After liquidation, your remaining debt is eliminated forever. The process is fast—90 to 120 days, in some cases—and is a great option for those families who can’t afford a repayment plan and don’t have a lot of big assets (boat, motorcycle, etc.) that they want to keep.
Chapter 7 doesn’t eliminate a secured creditor’s security interest, domestic support obligations (like child support), or current taxes and not all clients meet the income-eligibility requirements for this type of bankruptcy.
Chapter 13, in contrast to a liquidation bankruptcy, is a reorganization bankruptcy; this means that some of your debts will be prioritized as more important than others (priority debts, such as taxes and child support) and will be paid first. Also, with a Chapter 13, you may get to keep your home, car, and other big assets. In your case, your attorney will suggest a repayment plan for between 3 to 5 years, during which you will make payments on your prioritized debts. After successfully completing your repayment period, your remaining debt will be discharged.
What’s the best way to file for bankruptcy in Minnesota?
If you’re a Minnesota resident who is interested in either Chapter 7 or Chapter 13 bankruptcy, it’s important to choose a bankruptcy law firm that has the experience and knowledge to ensure that your bankruptcy petition is approved and that all your eligible debt is discharged.
At Kain & Scott, we work tirelessly to help our clients get out from under years of debt. As Minnesota’s oldest law firm, we have helped thousands of Minnesota residents navigate the complex process of bankruptcy and receive the debt forgiveness that many desperately need.
With client-focused services like a free initial consultation that you can do remotely by telephone, Skype, or Facetime, Free 90 Day Credit Repair, and a 100% Money Back Guarantee, we offer more than just bankruptcy: we offer full-service legal services and comprehensive debt solutions for all our Minnesota clients.
How do I get started filing bankruptcy in Minnesota?
Your journey to a financial fresh start begins with your free initial consultation with one of our friendly and knowledgeable bankruptcy specialists. From the comfort of your own home, your attorney can examine your finances, assets, and debts to determine which type of bankruptcy is right for your family. From there, we will gather your information and complete your paperwork right away; by filing your bankruptcy petition with the court within days—not months, like other law firms—we help you get your debt discharged as fast as possible.
What happens to my credit after I file for bankruptcy?
Unfortunately, filing for bankruptcy doesn’t magically reset your credit to the point it was before you fell behind on your payments. Since your credit score affects many aspects of your life (from obtaining financing to being eligible for some types of employment), it’s important to take the necessary steps to repair it.
At Kain & Scott, we understand the importance of your credit score and how difficult it can be to repair it on your own; that’s why we proudly offer our clients a Free 90 Day Credit Repair Program designed to boost your credit and get your family back on solid financial ground.
Make bankruptcy work for you with Kain & Scott
To get started on your financial transformation, visit us online at www.kainscott.com today to schedule your free initial consultation.