Bankruptcy law provides people with options. If you are overwhelmed by debt and have a regular job, then you should talk to your Minnesota bankruptcy lawyer about your different options. You may be able to choose between filing for Chapter 7 bankruptcy protection or Chapter 13 bankruptcy protection.
Chapter 7 and Chapter 13 are very different and will have different effects on your life. Below, our experienced Minnesota bankruptcy attorneys describe some of the important differences.
3 Major Differences Between Chapter 7 and Chapter 13 Bankruptcies
Some of the important differences between these two forms of bankruptcy include:
Chapter 7: An individual may be eligible for Chapter 7 bankruptcy if he or she makes less than the median Minnesota income or if the filing is found not to be abusive.
Chapter 13: Chapter 13 bankruptcy protection is only available to debtors who have regular wages and who owe less than certain amounts.
Chapter 7: In a Chapter 7 case, property is classified as exempt or non-exempt. Exempt property is property you get to keep, and non-exempt property is used to satisfy your debts.
Chapter 13: Chapter 11 bankruptcy does not classify property the same way, because property is not used to satisfy debt. Instead, a repayment plan is developed that has a bankruptcy petitioner pay a regular amount to creditors over the course of the plan.
Chapter 7: Chapter 7 cases are discharged rather quickly, because the debts are satisfied once the non-exempt property has been sold and/or distributed.
Chapter 13: Chapter 13 bankruptcies typically take at least 3-5 years. Once the repayment plan has been negotiated it typically runs over a 3- to 5-year period, and a bankruptcy discharge is not possible until the plan has been completed.
You can find out more about filing for bankruptcy in our FREE book: What You Need to Know About Filing Bankruptcy in Minnesota.
Contact a Minnesota Bankruptcy Lawyer for Help
The differences described above are very general. To find out more about how filing bankruptcy pursuant to Chapter 7 or Chapter 13 may affect you, please call an experienced Minnesota bankruptcy attorney today at 952.388.2942 or 800.619.8991to schedule a free consultation.