Mankato Bankruptcy Lawyer

When attempts to manage and repay debts through conventional methods fail, such as budgeting, credit counseling, or debt consolidation, bankruptcy may become a necessary step. Likewise, if your current income is insufficient to cover debt payments, even after trying to work with creditors on repayment plans, bankruptcy could provide a structured process for debt relief.

It is essential to seek advice from an experienced Mankato bankruptcy lawyer before deciding to file for bankruptcy. Our seasoned attorneys could assess your situation, help you determine if bankruptcy is the best course of action, explain potential outcomes, and help you make informed decisions about next steps.

What Are the Different Types of Bankruptcy Cases?

People often choose between Chapter 7 and Chapter 13 bankruptcy depending on their situation and goals. Chapter 7 offers a faster way to clear qualifying debts and move forward, with your home and essential property protected. Chapter 13 creates a manageable repayment plan that lasts three to five years. You make affordable payments, and once the plan is complete, the remaining eligible debt is discharged. Both options also stop foreclosure and wage garnishment through the automatic stay, giving you the breathing room you need to protect your income and your home while you work toward a fresh start. A Mankato bankruptcy lawyer could help you determine whether bankruptcy is the right choice for your specific financial situation.

Chapter 7

Chapter 7 bankruptcy is a faster option for eliminating qualifying debts and starting fresh. It can help individuals who are struggling with unsecured debts like credit cards, medical bills, and personal loans, including those who run a small business or sole proprietorship.

To file for Chapter 7, debtors complete a means test, which looks at income and expenses to determine eligibility. If income is above a certain level, Chapter 13 may be a better fit. Even if a debtor earns more than the median income, expenses can sometimes reduce disposable income enough to qualify for Chapter 7.

One of the key benefits of Chapter 7 is that debtors can keep certain exempt property, such as a home or personal belongings, that state or federal law protects. Debtors can select the exemption plan that best safeguards their assets. Some debts, such as child support and certain taxes, do not qualify for discharge. Others, like student loans, may qualify through a separate legal process called an adversary proceeding. Debtors can also choose to reaffirm debts like car loans or mortgages to retain the property.

Chapter 7 provides a path to financial relief, allowing clients to reduce overwhelming debt, protect essential property, and take control of their financial future.

Chapter 13

Chapter 13 is specifically for individuals with regular income who meet certain debt limits. A sole proprietorship, where the business and the owner are legally the same, could file for Chapter 13, but the owner’s personal debts and business debts are dealt with together. Chapter 13 bankruptcy allows debtors to reorganize their debts and repay them over a period of three to five years under the supervision of the bankruptcy court.

This route is for those who could make regular payments but are behind on secured debts, such as mortgages or car loans, or have non-exempt assets they want to protect. Debtors propose a repayment plan to pay back some or all of their debt over a three-to five-year period, which potentially includes catching up on missed payments for secured debts. The plan must allocate all disposable income to debt repayment.

Important Stages in Bankruptcy Proceedings

Filing for Chapter 7 or Chapter 13 bankruptcy doesn’t have to be overwhelming. Our team will guide you through every step of the process.

Before filing, you complete a government-approved credit counseling course, and we even provide a discounted option for our clients. There’s no need to meet with the credit counselor in person—everything can be done conveniently online.

Next, our attorneys in Mankato will gather all the documents and financial information needed, prepare your bankruptcy petition, and file it with the court. As soon as you file your case, an automatic stay takes effect and stops most creditors from contacting you.

You will also participate in a meeting of creditors, called the 341 meeting. This is done via Zoom, and our team will fully prepare you beforehand so you know what to expect. The trustee will review your petition and ask questions, and we will be with you every step of the way to make the process smooth and manageable.

Post Filing

You must complete an approved debtor education course before finalizing the bankruptcy. This course teaches personal financial management and strategies to avoid future financial difficulties. After completing all the required steps, and if there are no objections, a Chapter 7 bankruptcy could discharge the eligible debts.

In a Chapter 13 bankruptcy, the court reviews the proposed repayment plan to ensure it meets legal requirements, such as paying priority debts. Once the court approves the plan, you make monthly payments to the trustee, who distributes them to creditors. After successfully completing all payments in the plan, you may receive a discharge order that eliminates any remaining debt the plan covers.

Contact a Bankruptcy Attorney in Mankato To Help With Your Case

As the leading bankruptcy firm and the largest filer in the state, our attorneys at Walker & Walker protect your rights at every stage of the legal process. You may want to have a Mankato bankruptcy lawyer by your side who can handle the legal complexities of your bankruptcy, allowing you to focus on building a better financial future.

Our attorneys will provide guidance based on your specific financial situation and goals. We will also negotiate with creditors and advocate for your best interests in court. Contact us today to request your free case evaluation and discuss the options available for your situation.