Understanding the Bankruptcy Process in Minnesota
For many of us struggling through the global financial
crisis, it is becoming even harder to meet monthly payments, and
filing for bankruptcy becomes the only viable option. If this is the
case, it's important to understand that the bankruptcy process is
not something that you should handle alone.
Bankruptcy comes in two forms - Chapter 7 bankruptcy, where your
unsecured debts are wiped clean by a court order while you continue
to pay your secured debt, and Chapter 13 bankruptcy, where you have
a payment plan to pay off your debts. In Chapter 7 bankruptcy cases
debts caused by credit cards, bank loans, medical bills, business
debts and utility bills may be discharged. In Chapter 13 bankruptcy
cases you are able to keep your valuable property but given a chance
to catch up on your house, car and other debt payments.
Step One: Filing
for Bankruptcy
The bankruptcy process can be a little overwhelming. The first thing you will need to do when filing either a Chapter 7 or Chapter 13 bankruptcy claim is to fill out court papers. You will need to write a detailed report of your income and expenses as well as a list of your property and possessions and any other valuables. Although this may seem like a daunting task, it can actually help you gain control of your assets and help put your finances in perspective. You will also need to give the names and address of your creditors. Once the documents have been filled out and signed, the court will issue an order for the creditors to stop trying to collect money. You can expect an official court order to arrive several days later which will contain the date and time of your bankruptcy trustee meeting.
Step Two: Attending the Meeting
The bankruptcy meeting usually occurs about one month after you file
for Chapter 7 or Chapter 13 bankruptcy. The trustee will confirm
that everything in your court order is correct. It is mandatory that
both you and your lawyer attend this meeting. In a Chapter 7
bankruptcy case, you can usually expect a final declaration from the
court about 60 days later that discharges your debts. With Chapter
13 bankruptcy the court will determine a suitable repayment plan for
your situation. In a Chapter 13 bankruptcy case, as long as you make
the payments and follow the schedule for the next three to five
years, then the court will grant a discharge of your debts.
Step Three: The Aftermath of
Bankruptcy
Once the bankruptcy process is complete, you are able to continue on
with your life. Many people are still eligible to qualify for
student loans or a home mortgage, even after filing for bankruptcy.
In addition to this, most people who have filed for bankruptcy find
that future creditors do not care about the debt if it more than a
year old. As long as you have a stable job and demonstrate the
ability to manage your finances this time around, then there is no
reason why you should have trouble with overwhelming debt again.