Minnesota Bankruptcy: What Exactly Happens in a Chapter 7 Bankruptcy and Who Qualifies?

In today’s world bankruptcies are much more common than they used to be. One factor is, of course, the drop in the economy.

Some people hesitate to explore the possibility of bankruptcy because they are embarrassed. There is no need to feel ashamed if you are considering bankruptcy. You are not alone. You are by far not alone.

Think about this: if you also keep going down a path of destruction you will take others with you. You will take your family with you. You will take some of the additional, future creditors with you. So, if you stop now, you can begin rebuilding your life and your credit. Your new creditors will always be people you can actually pay, without worrying about mounds of past debt. You really don’t want to take your family down a path of destruction. 

Benefits of Bankruptcy

After bankruptcy, you will have to begin rebuilding your credit. Your credit report will show that you have filed for bankruptcy for a period of time. But much of your debt will be extinguished and you can begin rebuilding your credit by establishing new credit accounts and paying the bills timely.

Also Read: Part 7 Bankruptcy in Minnesota: What You Need to Know

One of the topmost primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The person has no liability for discharged debts. So, in a Chapter 7 case, however, a discharge is only available to individual people, not to partnerships or corporations. Although an individual Minnesota Chapter 7 bankruptcy case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge also does not extinguish a lien on the property.

Chapter 7 Bankruptcy for Individuals and Businesses

Chapter 7 liquidation is one type of bankruptcy available to an individual. It is also available to businesses.

After filing an MN Chapter 7 bankruptcy, a bankruptcy trustee will take certain nonexempt property from you, if you have it, and sell it for the benefit of your creditors. Some o the exempt property includes basic necessities and other assets, like a limited amount of jewelry. Many people filing chapter 7 bankruptcy have no nonexempt property.

Who Qualifies for Chapter 7 Bankruptcy?

To qualify for relief under chapter 7 of the Bankruptcy Code, the person filing may also be an individual, a partnership, or a corporation or other business entity. Relief may always be available under chapter 7 irrespective of the number of the person’s debts.

A person is not permitted to filing Chapter 7 bankruptcy in Minnesota if the person has had a bankruptcy petition dismissed in the past 180 days due to the person’s purposeful failure to appear before the court or comply with orders of the court, or if the person voluntarily dismissed the previous case after the creditors sought relief from the bankruptcy court just to recover property upon which they hold liens.

So, Bolinske Law can help you in filling the right attorneys whether it is chapter 7 or chapter 13. 

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