There are different types of bankruptcy with each having its own process. Knowing the process for the type of bankruptcy that you wish to file will help you to know what to expect. Of course, your Minneapolis bankruptcy attorney will always let you know what to expect and inform you of the next steps before they occur so you can prepare yourself.
Know that your involvement with the bankruptcy judge is very limited. You will have most of your interaction with your attorney and a court-appointed trustee who will oversee matters.
Guiding You Through The Chapter 7 Process
Chapter 7 is liquidation bankruptcy, as it may involve liquidating assets in order to pay back debt. Sometimes a person doesn’t lose anything. Nonetheless, you will meet with your attorney, your attorney will assess your financial situation, give you a list of credit counselors to have a 90 minute meeting with regarding your financial situation, and will then file the petition along with the statement that states the completion of credit counseling. All of your financial information will be entered in the petition, which is rather lengthy, and it will be submitted to the court.
Once the petition is submitted to the court, your creditors will no longer be able to contact you. All wage garnishment, repossession, and foreclosure activities must also stop.
After a 341 hearing, which is a meeting of creditors, the court will typically have the matter discharged within six months. At the 341 hearing, creditors may or may not show up. If they do to object to the bankruptcy, nothing may occur if you do not have the assets or the money to repay them.
Navigating The Chapter 13 Process
The Chapter 13 process is like the Chapter 7 process in many ways. You will perform the means test that shows how your debts compare to your assets and income. You do have to go through credit counseling before the petition is filed with the court. However, you will also propose a plan to repay creditors in a 3 to 5 year period. The court will either approve or disapprove of the repayment plan. If they disapprove, then a new plan will need to be drawn up so that everyone can agree on a plan that works for them and you. In the meantime, you do not have to worry about liquidation of property. As long as you continue making your payments as planned, you remain in possession of your assets. If something happens that you cannot make the payment, you can have your Minnesota bankruptcy lawyer ask the court for some kind of extension or modification of the plan that will fit your current financial situation.
Unlike Chapter 7, Chapter 13 does have a broader discharge of debt (secured and unsecured debt can be included), but debts are not discharged immediately. Debts are not discharged until after the plan has been completed. In other words, this is a 3 to 5 year process. In the meantime, you are protected from foreclosure and repossession.
Contact A Minneapolis Bankruptcy Lawyer
If you are thinking about filing bankruptcy, it is important to know what the process is and how long it will take. Of course, the exact process depends on which type of bankruptcy you are filing. At the McKinney Law Office, you will be advised of the different types of bankruptcy, their processes, and approximately how long it will take for each. To learn more, call the Minneapolis office at 612-206-3706 or the St. Paul office at 651-379-4110 for a free consultation.
This law firm is a debt relief agency, and we help people file for bankruptcy relief under the United States Bankruptcy Law.