Filing for bankruptcy may seem intimidating. However, bankruptcy can be the assistance that you need during difficult financial times. When done correctly, a bankruptcy filing can either provide you with a more practical repayment plan or eliminate your debt. Bankruptcy allows you to start over without creditors bothering you.
In this post, we will explain the difference between a Chapter 7 vs. Chapter 13 bankruptcy in Minneapolis. If you prefer legal guidance from experienced bankruptcy lawyers, our seasoned bankruptcy attorneys at Walker & Walker Law Offices can help you eliminate your debts.
How Does Chapter 7 Bankruptcy Filing Work?
Chapter 7 provides you with a quick and viable method to write off your debt, and the filing and discharge process typically takes no more than six months.
Unlike Chapter 13, a Chapter 7 bankruptcy filing is available to you in Minneapolis if you have overwhelming unsecured debt from medical bills and credit cards. If you have limited income or assets, you can obtain some financial relief using this option.
To qualify for Chapter 7, you must pass a means test that compares your personal or household income to that of a similar-sized family or entity. A means test assesses your finances to determine your possibility of repayment. Passing a means test implies that you have neither the means nor the assets to repay the loans or debts.
Qualifying for Chapter 7 does not exempt you from having a court-appointed trustee sell certain secondary assets, such as a second vehicle or property, to repay your lenders. Nevertheless, the Minneapolis homestead exemption law allows you to keep certain primary assets such as your home, retirement funds, or household items. An experienced Chapter 7 bankruptcy attorney can help you with the filing process and provide legal guidance.
How To File Chapter 13 Bankruptcy
In contrast to Chapter 7, Chapter 13 bankruptcy in Minneapolis is available if you have a somewhat stable income but struggle to repay secured and unsecured debts such as auto loans, credit cards, or property mortgage payments.
The stable income requirement helps ensure that you can fulfill your repayment obligations. To qualify for Chapter 13, you may need to have above-median income, and your secured and unsecured debts must not exceed certain limits, specifically $1,580,125 and $526,700, respectively.
When structured properly with the help of an experienced bankruptcy lawyer, Chapter 13 can prevent your home from being foreclosed, help you keep all your assets, and allow you to pay off your debts within three to five years. Where possible, you may be able to convince the court to discharge your outstanding unsecured loans or debts if you complete your repayment within the specified timeline.
Contact Us in Minneapolis To Discuss the Difference Between Chapter 7 vs. Chapter 13 Bankruptcy
If you are considering a Chapter 7 vs. Chapter 13 bankruptcy in Minneapolis, our bankruptcy lawyers can help you. At Walker & Walker Law Offices, our team can provide experienced and knowledgeable legal guidance that can effectively help you structure and eliminate your debts. Contact us today to discuss your options.
