You are Filing Bankruptcy in Minnesota and, now that the ink is dry and your petition is filed, do you know what happens next?
What happens next after filing bankruptcy depends largely on whether you filed for Chapter 7 or Chapter 13, although there are similarities in both processes. For a closer look at what you can expect after filing your bankruptcy petition, read on!
341 hearing/ meeting of creditors
Whether you filed Chapter 7 or Chapter 13, the next step for both is a waiting period while your 341 hearing is scheduled. Also known as a meeting of creditors, this is the time when your creditors and the bankruptcy trustee (think of the bankruptcy trustee as a case manager) have the chance to ask you questions and request additional information about your finances. The “hearing” isn’t a hearing in the traditional sense: there isn’t a judge, or jury, or an angry lawyer on the other side grilling you. Instead, it is an administrative hearing; this can be thought of as an official paperwork processing gathering of you, your Bankruptcy Lawyer, the trustee, and any creditors that choose to attend, that’s legally-binding, but not adversarial.
You will be sworn in and asked simple questions for the record—such as your full name, address, occupation, and other identifying information—as well as questions that can help the trustee identify whether the petition is lawful (you aren’t trying to launder money or engage in fraud) and that filing bankruptcy in general and the type you filed for specifically, is appropriate in your case. If any of your creditors choose to attend (which doesn’t usually happen), they are also allowed to ask you questions about your assets and liabilities.
After your bankruptcy meeting is over
This is the point where the paths differ depending on the type of bankruptcy you filed.
If you filing Chapter 7 Bankruptcy in Minnesota, there is a waiting period (60 days from the day you had your meeting with the trustee) while all the behind-the-scenes action takes place: during this time, all you have to do is wait. Once the trustee has completed processing the details of your bankruptcy, all the unsecured debt listed on your petition is discharged: forgiven forever, done!
If you filed for Chapter 13, the next step is having the bankruptcy court confirm your repayment plan. Confirmation hearings are held approximately 30 days after your meeting with the chapter 13 trustee. Your first payment is due within 30 days after your case is filed; you need to make one more monthly payment prior to confirmation of your plan. Your repayment period will span between 3 to 5 years and the amount of payments are based on both what and who you owe as well as what you can afford – but you are typically not required to pay your unsecured debt in full. You will make monthly payments to the bankruptcy trustee for the duration of your repayment period; once the trustee receives your money, he or she will redistribute that money to your creditors. Not all creditors receive the same priority or percentage of payment each month however: certain debts, like back taxes, child support, and alimony are classified as priority debts and receive the most attention. Once you have successfully completed your repayment plan, the remaining debt you owe will be discharged.
Post-bankruptcy: your credit report and credit score
Contrary to popular belief, once your debts are discharged through bankruptcy your credit score does not magically reset to a “good” range. Filing for bankruptcy will temporarily cause your score to lower even further; once it re-stabilizes however, you’ll have to raise it yourself the hard way.
Your credit report will also show that you filed bankruptcy: anyone who can access your credit report, including employers, creditors, landlords, and others, will be able to see that you filed. Bankruptcy filing will show on your credit report for 10 years after filing.
Raising your credit score after bankruptcy is no small feat. That’s why at Kain & Scott, we offer our Minnesota bankruptcy clients a Free 90 Day Credit Repair Program that quickly and easily boosts your score and allows you to obtain financing for the things your family needs from our list of trusted Minnesota lenders. Together, we can reset the clock on your credit history and score to give you the new beginning you deserve!
How to file Chapter 7 or Chapter 13 bankruptcy in Minnesota
If you haven’t yet filed for bankruptcy and are simply considering whether it would be a good option for your family, let our team of experienced bankruptcy attorneys help! With a free initial consultation, your bankruptcy specialist can determine which type of Minnesota bankruptcy is right for you and get started right away completing your paperwork and filing your petition with the court to get your debts erased as quickly as possible.
To schedule your free initial consultation, visit us online at www.kainscott.com today to speak with one of our friendly and knowledgeable staff!