Bankruptcy is a legal procedure allowing a person or business to have their debts absolved, in part or in whole. It is normally treated as a last resort, because, while it can prevent financial catastrophe, it has some huge long-term consequences. This warrants careful consideration of the costs and benefits. Since it's a product of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Minnesota will be the same as anywhere else in the country. Particular courts in Apple Valley, Minnesota will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Apple Valley, Minnesota
In Apple Valley, Minnesota, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This normally includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Apple Valley, Minnesota is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Apple Valley, Minnesota
Chapter 13 bankruptcy in Apple Valley, Minnesota is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over a prolonged period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Apple Valley, Minnesota
This depends entirely on the facts of your individual case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
Regardless of your situation, you should speak with an attorney in Apple Valley, Minnesota who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.