Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential 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. Distinct courts in Stillwater, Minnesota will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Stillwater, Minnesota
In Stillwater, Minnesota, there are 2 typical forms of commonly-used 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 typically includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some types of debt, however, can't be excused in Chapter 7 Bankruptcy in Stillwater, Minnesota. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Stillwater, Minnesota
In Stillwater, Minnesota, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 bankruptcy does not absolve debt, it restructures it. This involves a court coming up with an adjusted repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original arrangements that created the debt in the first place. This creates a new payment structure, typically involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Stillwater, Minnesota
Which Bankruptcy type to file under depends heavily on the facts of each distinct case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
Regardless of your situation, you should speak with an attorney in Stillwater, Minnesota who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.