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Which Chapter Is Right For Me?

Many people have a picture of bankruptcy in their head that includes losing everything you own and starting again. While you do have the chance to start over with most of your debts, you won’t necessarily lose everything you own. In fact, in most instances you will be able to keep your secured debts, which include your house, car and personal possession. There is more to filing for bankruptcy than simply having all your debts absolved and walking away from what you owe and own. Furthermore, there are different kinds of bankruptcy, all of which are designed to help those in a tough situation out of financial trouble. So what chapter of bankruptcy is right for you?

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also referred to as liquidation bankruptcy and provides you with the chance to sell certain assets in exchange for a discharge of certain debts. However, there are many exemptions in place that allow you to keep secured debts such as your house, your car and your personal possessions. Every case is different but chapter 7 bankruptcy does provide you with a quick way to discharge your debts. In fact, most cases can be completed in three to four months.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is also referred to as reorganization bankruptcy which means that rather than have all your debts discharged, you will be placed on a payment plan over a course of three to five years. Your debts will all be consolidated into one payment that you will be able to manage. You will not have to ‘sell’ any of your assets and at the end of the term the remaining debts will be discharged (aside from certain debts such as taxes, student loans and child support).

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is normally reserved for small business owners including proprietorships, LLCs and corporations. Chapter 11 bankruptcy allows you to remain in business but placed under a payment plan so that you don’t have to completely give up your business dreams and shut the doors. You will be given the opportunity to restructure your business and get a second chance.

Taking Charge of your Financial Debts

Knowing what chapter of bankruptcy is right for your unique situation is impossible without having a consultation with you and discussing your individual circumstances. We offer a free initial consultation to go over your assets, debts and finances and decide if any of the chapters of bankruptcy will benefit your situation. You may be considering bankruptcy if:

  • You are unable to pay your bills each month
  • You are being harassed by creditors and debt collectors
  • Your debts are impacting other aspects of your life, such as your relationship and emotional state
  • You are being threatening with home foreclosure by your lending company
  • You are unable to pay even the interest off your credit cards
  • You are living off borrowed money
  • You are experienced garnishment of wages
  • You have recently experienced a change in events such as unemployment, medical problems, divorce or death in the family that has left you in financial hardship

If you are ready to take control of your life and your debts, then your first step is to speak with an experienced Minnesota bankruptcy lawyer. Contact us today at 612-377-5311 for a free initial consultation.