Chapter 7 bankruptcy is also known as “liquidation bankruptcy.” This is because a person who qualifies can have unsecured debts such as medical bills, personal loans, and credit card debt discharged completely. In the end, very little or none of the debt has to be paid back to the creditors. Most or all of a person’s assets may also remain in their possession if the values of those assets do not exceed state or federal exemptions.
For someone having difficulty with their debt because it far exceeds their income, talking to a Minneapolis bankruptcy lawyer can be the ideal step in the right direction toward starting over financially. Harassment from creditors stops, wage garnishment stops, and even foreclosure proceedings can stop.
The entire Chapter 7 bankruptcy process takes about three months from the time your petition is filed with the court. However, the petition cannot be filed until a debtor education class is completed with an approved credit counselor. The course is approximately 90 minutes long and can be completed on the Internet, over the phone, or in person.
Once the course is complete, a certificate is filed with the bankruptcy petition that says the course has been completed and it is this certificate that allows the bankruptcy process to continue. Once that petition is filed, it is illegal for creditors to call you once they have been informed of the bankruptcy.
After approximately 30 days, there is a meeting of creditors that is overseen by a bankruptcy trustee. This trustee verifies personal information and asks questions regarding assets, finances, and debts. It can be determined whether or not you have any assets that can be seized and sold to satisfy debts. If so, that process will be carried out. If not, then there is nothing more that needs to be done except waiting for the discharge order that will be issued approximately 60 days later.
The bankruptcy remains on your credit report for 10 years. This does not mean you cannot acquire new credit during that period. Credit can be re-established anywhere between 6 months and two years after your bankruptcy has been discharged. Interest rates do tend to run higher, but this will improve over time. Making on-time payments, not carrying too many credit card accounts, and not maxing out accounts will help normalize your credit situation in a way that you can manage so that you can be in much better financial condition.
If you are consumed with debt and have tried everything you can to resolve it, you need the help of a bankruptcy lawyer as soon as possible. The stress that comes with debt collection can be a thing of the past and you can possibly keep your home and your other assets. To learn more about how Paul Ross & Associates can help, call for a free consultation at 952-448-3333