There are a few different types of bankruptcy. The difference is simply in how they are organized and what type of payments (if any) you’ll be expected to make.
If you’re filing on behalf of yourself and not a business you own, in almost all circumstances you’re going to be looking at either a Chapter 7 or Chapter 13 bankruptcy. The main difference is that Chapter 7 consists of almost complete debt forgiveness, while Chapter 13 potentially reduces some of your debts and arranges them into a court-ordered payment plan that is within your means.
So why get stuck repaying debts with Chapter 13 when you can wipe them out with Chapter 7? For starters, you might get disqualified from Chapter 7 by your income, if it is higher than the median for Minnesota and has been for the previous six months. Chapter 7 also mandates that you liquidate certain assets — any property you own beyond your primary residence, all but one of your automobiles, any investments you may have, and any boats or watercraft you may own, just to name a few of the biggest examples. Chapter 13 is also advantageous if you have types of debt that can’t be discharged in bankruptcy; these include student loans, child support payments and unpaid taxes.
If you’re uncertain about which type of bankruptcy is your best option, contact the experienced attorneys at Buettner Law Group. In addition to helping you determine which option is best for your circumstances, we’ll ensure all of your paperwork is filed properly the first time and with no delays or complications.