Getting a Fresh Start Through Chapter 7 Bankruptcy
If you haven't filed a Chapter 7 within the last eight years, can pass the Chapter 7 "means test," and your budget only allows for you to pay your monthly living expenses — you may be able to discharge most of your unsecured debt, including credit card bills, hospital bills and older tax debts.
Filing for Chapter 7 bankruptcy protection can also put an immediate stop to creditor harassment and wage garnishments — and put at least a temporary stop to home foreclosure proceedings or car repossession (but you usually need to become current on your payments if you want to keep these assets in a Chapter 7).
At Prescott & Pearson, P.A., our attorneys have focused solely on helping Minnesota families and small businesses get a fresh start through the bankruptcy process since 1975. We're confident that we can help you too — even if it turns out that bankruptcy isn't the right solution for your needs. Call or contact us today for a free consultation and see what we can do to help.
Bankruptcy fact: Most people who would have been eligible for Chapter 7 bankruptcy relief under the old laws (before October of 2005) will still qualify today.
What Won't a Chapter 7 Bankruptcy Do?
Chapter 7 bankruptcy does not allow you to discharge every type of debt. Debts that you can't erase include student loan debts, recent taxes, child support obligations and past-due mortgage and car payments.
Another important fact to be aware of is that filing a Chapter 7 will not protect co-debtors. In other words, if someone else co-signed on a loan for you or took out a loan with you — those people will be on the hook for the full amount of the debt. That includes joint holders on your credit card accounts.
You should also know that Chapter 7 bankruptcy may not protect all of your assets. For instance, if you own a cabin and have alot of equity in it, it will probably be sold by the trustee in order to pay your creditors. In these situations, a Chapter 13 payment plan might be a better option for you — especially if you have unprotected assets that you want to keep.
For a broader overview of this topic, see our Chapter 7 Bankruptcy Information Center.
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For answers to any other questions about bankruptcy in general, or about your specific situation and concerns — don't hesitate to call or contact our lawyers in the Twin Cities area for a free consultation.
