Remaining debt after bankruptcy in Minnesota

Although a Chapter 13 bankruptcy may eliminate some debts, others may remain. For instance, an individual who owes child support or student loans will generally still owe those debts after the case is over. Additionally, some debts related to criminal activities such as drunk driving may still be owed by the debtor after the case is resolved. Long-term debts such as a mortgage may also remain.

Filing for Chapter 13 bankruptcy may have an impact on which debts are stayed while the case is ongoing. Those who owe child support may be spared collection efforts when filing for Chapter 13 bankruptcy as opposed to filing for Chapter 7 bankruptcy. This is because the debts are being repaid with future earnings as opposed to liquidated assets. However, the stay may be lifted if a parent is unable to provide for the child in lieu of child support payments.

While rare, it may be possible for a debtor to have student loan debt discharged through bankruptcy. A court must find that the debtor made a good faith effort to repay the loan prior to filing for bankruptcy. Furthermore, forcing the borrower to repay the loan would force an undue hardship that would extend for a long period of time.

Those who wish to reorganize debt may wish to do so under the bankruptcy code. Filing for Chapter 13 bankruptcy may allow for a stay of current creditor actions as well as provide a path that results in debt relief. Obtaining such relief may make it easier to pay debts that may remain after the bankruptcy process has been completed. An attorney may be able to help anyone who is considering bankruptcy or has already filed their case.

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