You may be teetering between whether to file bankruptcy or not to file. Even if you are questioning whether it is the right decision, you can contact Ross & Associates to help you with that decision. We will perform a “means test,” which is a measurement of your ability to pay back your debt. If your debt is far exceeding your income, bankruptcy is most likely the right choice due to the fact that you may not see an improvement in your income for quite some time. Even if you choose credit counseling to settle debts and learn where you can cut costs, not all of your creditors may agree to modified terms that you can afford. We do, however, work with your creditors to reach an agreement that works for you if you choose to settle debts over bankruptcy. We have had many in Minnesota that have been successful through credit counseling.
Chapter 7 Bankruptcy Process
If you do choose bankruptcy, Chapter 7 is one of the types that you may be able to file. Your means test will determine whether or not you can. Those that are eligible tend to have more debt than they do income and have very few assets of low value. If there is an asset with a value that exceeds the Minnesota state or federal exemption amount, a court-appointed trustee can take that asset and sell it so that some of the debt can be repaid. Other than that, all other unsecured debts can be discharged in approximately 90 days after the bankruptcy petition is filed.
But before the petition is filed, a credit counseling course must be taken in-person, online, or over the phone with an agency outside of the law firm. This course is 90 minutes long and its completion allows you to move forward with your bankruptcy. Thirty days after filing, you and your Watertown bankruptcy attorney will attend a meeting with creditors. Some may show up and some may choose not to. They are there to simply ask questions and review your case. Sixty days after that, your unsecured debts are discharged. You will still be responsible for secured debts and any that you may have reaffirmed. Reaffirmed debts are those that you choose to pay as usual.
Chapter 13 Bankruptcy Process
The Chapter 13 bankruptcy process is much the same as the Chapter 7 process. A person files Chapter 13 when they have some disposable income, but that income is not enough to pay most of their debts. Chapter 13 is also used to protect non-exempt assets. But rather than receive a discharge of debts and walk away, a payment plan must be completed. This plan involves paying all or part of the total debt included in the plan in 36 to 60 months. Defaulting on the payment plan can result in asset seizure. However, a person can request modifications or to stop payments temporarily if they have a good reason or a person can opt out completely. Opting out will allow the collections calls, lawsuits, garnishments, and other actions continue.
Contact A Watertown, Minnesota Bankruptcy Attorney
We understand that debt has put you up against the wall and we want to make sure you are freed from that debt so you can stop chasing it and focus on more important things in your life. Bankruptcy is not a death sentence. It is actually a way in which you can start over. To find out more about how you can start over financially and how we assist you along the way, call for a free consultation at 952-448-3333.