If you are like many individuals that have turned to bankruptcy, you have tried everything else. Credit counseling, which is a service we offer, can be effective depending upon whether or not the creditors wish to cooperate. How much debt, the amount of the debt and who will agree to the terms will determine whether or not credit counseling will free up income. If successful, the program can result in reduced balances, reduced or eliminated interest, smaller payments, and no more fees.
If credit counseling is not an option due to uncooperative creditors or just too much debt, bankruptcy is an effective alternative. Your Lakeville, MN bankruptcy lawyer reviews your debts, income, and assets with you to determine what type of bankruptcy is ideal for your situation. This is called the “means test.”
There are two types of bankruptcy that is filed by individuals and they are Chapter 7 and Chapter 13. There are many elements between them that are similar with a number of them being different. Both will remain on your credit report for ten years and most of the process is the same. The differences lie in the fact that Minnesota Chapter 7 is a faster process because it is simply seeking the discharge of all unsecure debts and Chapter 13 involves the establishment of a payment plan that repays debt in a way the debtor can afford.
The means test that is conducted by your bankruptcy lawyer will help determine which is best. If you qualify for Chapter 7 but you have assets that at not exempt from being taken to satisfy some of your debt, you may choose Chapter 13 to save those assets if you can afford a payment plan. Some individuals may not be able to afford the payment plan, so the only way is Chapter 7. The good news is that it is rare for assets to be taken by the court-appointed trustee to pay creditors. This is because assets are exempt to certain dollar amounts that cover their worth and not purchase prices.
The Credit Counseling Step
Before you see your attorney or after the initial consultation, you can complete an online, over the phone, or in-person credit counseling course that lasts for 90 minutes. The credit counselor will evaluate your financial situation the same way your lawyer does during the means test and will send a document to your attorney that will be included with your bankruptcy petition. This document says that you did complete the course and it is a way to let the court know that you are in the position to file bankruptcy.
Contact A Lakeville, MN Bankruptcy Attorney
Many residents in Minnesota are facing debt that they simply cannot manage on their current incomes. It is nothing to be ashamed of. If this is you, then you need to do something about that debt now so you can start living your life without the collections calls or the prospect of losing your home or vehicle. Ross & Associates can help you. To get started, call for a free consultation at 952-448-3333.