Exploring the Various Bankruptcy Options Available

For more than 40 years, we at Prescott Pearson & Tande, PA, have made it our business to stay on top of bankruptcy trends, changes in the law and fluctuating needs of the public. Being ready to deliver top-notch legal advice regarding bankruptcy also means being able to determine what type of bankruptcy is appropriate for each individual client under his or her unique circumstances.

A Chapter 7 bankruptcy has many advantages, including the fact that consumer debts are discharged or eliminated and the process takes only a few months. When bankruptcy laws changed in 2005, many people predicted that it would become more difficult for debtors to file Chapter 7 bankruptcy. However, in our law practice, the main difference we noticed was the increased amount of time and expense necessary for Chapter 7 filers to "jump through the hoops" of the means test, credit counseling and debtor education. In practice, most people who would have qualified for Chapter 7 bankruptcy under the laws before 2005 still qualify today.

A Chapter 13 bankruptcy also has advantages , including opportunities that many mortgage holders have to catch up with past due mortgage payments at little or no interest over several years' time. Debts are consolidated and reorganized into an affordable repayment plan lasting three to five years. At the end of the repayment period, any remaining debt included in the Chapter 13 bankruptcy is discharged.

Other types of bankruptcies include Chapter 11 (often used for businesses), which is quite uncommon in Minnesota. Prescott Pearson & Tande, PA, solely focuses on Chapter 7 and Chapter 13, the bankruptcies that serve the vast majority of people who contact us for debt relief advice and representation.

What about " Chapter 20" bankruptcy that you may have heard about? This term is used to describe back-to-back Chapter 7 and Chapter 13 in order to deal with consumer debt as well as a mortgage in a past-due status. This debt relief solution may apply in very specific circumstances such a change in a filer's financial picture. In most cases, a carefully executed Chapter 7 or Chapter 13 filing will provide efficient answers for individuals with out-of-control debt.

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To learn more about types of bankruptcy and how they compare to other debt relief options, call or email our bankruptcy lawyers today. We offer free initial consultations, quality services at competitive rates and effective representation statewide.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.