Bankruptcy in Minnesota is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Minnesota bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your distinct case.
Types of Bankruptcy in Minnesota
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Minnesota will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
Chapter 7 bankruptcy in Minnesota is sometimes called "liquidation" because it involves the forced sale of some (though certainly not all) of the debtor's assets. The bankruptcy court will appoint a trustee to oversee the appraisal and sale of some of the debtor's property, and the proceeds from the sale will go to the creditors, in their order of priority. Certain forms of property are exempt, and do not need to be sold, including houses and insurance policies. Once the property is sold, and the proceeds given to the creditors, the rest of the debt is excused. Chapter 13 bankruptcy normally reorganizes, rather than discharges, one's debts. Essentially, the court will come up with some type of repayment plan, independent of the terms of the agreements that created the debt in the first place (superseding any acceleration clauses). This is meant to give the debtor some breathing room, allowing them to repay their debts over time, without facing financial ruin in the process.
Chapter 11 bankruptcy is normally used by businesses. It also involves reorganization of debts, similar to chapter 13 bankruptcy. It requires the debtor company to come up with a reorganization plan, which its creditors must vote on for approval. If it is approved, the company will then be legally obliged to carry it out.
How Can a Minnesota Bankruptcy Lawyer Help?
Filing for bankruptcy is a major decision. While it can be beneficial, it's virtually guaranteed that there will be some negative consequences, such as damage to one's credit. Of course, with the advice of a Minnesota bankruptcy lawyer, it's possible that you will find the benefits to outweigh the costs, but only a bankruptcy lawyer can help you make that decision.
Interesting Facts About Minnesota
Minnesota, "The Land of 10,000 Lakes", is located in the Midwest U.S. It has a population of over 5 million people, who mostly live in the Minneapolis-Saint Paul region, also known as the "Twin Cities". Minnesota boasts a healthy economy, mostly dependent on raw material supply, as well as finished products.
Minnesota is noted for its diverse social and political makeup. It consistently has a high rate of voter turnout and civic/community participation. Community interests are represented at the state capitol building located in Saint Paul. The state legislature meets at the capitol building, which has a marble dome modeled after Saint Peter's Basilica in Rome. The elaborate dome is the second largest in the entire world.
The judicial system of Minnesota has three basic levels. Most claims are filed at the district court level, and appeals are heard at the Minnesota Court of Appeals. The highest court is the Minnesota Supreme Court, which is also authorized to hear appeals in addition to complex legal claims. Minnesota's district court system is very extensive, with a total of over 270 district court judges. Minnesota also has two courts set up under administrative agencies, the Tax Court and the Worker's Compensation Court of Appeals.
Lawyers in Minnesota represent clients in all types of legal matters. Minnesota lawyers are knowledgeable of the state's court system, including the administrative courts. Attorneys in Minnesota also provide answers to legal questions and assistance with legal forms and documents.