Consumer Bankruptcy Overview in St. Paul, Minnesota
Consumer bankruptcy is the process by which overwhelming personal debts are discharged. When a person becomes insolvent (unable to pay on their debts), they may choose to file for bankruptcy to wipe the slate clean. The purpose of consumer bankruptcy is to benefit the debtor and the creditor. The debtor will get a clean slate and a fresh start. The creditor will be paid as much as possible out of the debtor’s bankruptcy estate (property, income, and assets) or through a Chapter 13 repayment plan. Commonly, personal debts are handled through either Chapter 7 or Chapter 13 bankruptcy.
If you are struggling under the weight of mounting debt, contact your local St. Paul bankruptcy attorney to discuss your options. The lawyers at Solvent PLLC are experienced in every area of bankruptcy and are here to help you out of your dire financial situation. Call today for a consultation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is commonly referred to as a liquidation; however, the vast majority of debtors do not lose any assets. If a debtor qualifies, a Chapter 7 bankruptcy will wipe out your debts, with certain important exclusions such as student loans, alimony, and child support. This is the most commonly filed chapter in consumer bankruptcy and is also generally the quickest. Most cases are complete and debts discharged within three months of filing.
The moment you file in Chapter 7, an automatic stay will go into effect. This action immediately halts all actions against you by creditors. The automatic stay can be particularly helpful if your home is in danger of foreclosure or wages are being garnished.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is more complex than Chapter 7, as it involves the restructuring of debt. Chapter 13 consumer bankruptcy is suitable for debtors who earn a steady income and who want to keep valuable property and/or assets.
The centerpiece of a Chapter 13 filing is the repayment plan. As in Chapter 7, an automatic stay goes into effect immediately upon filing, halting actions from creditors. This gives the debtor time to restructure debts and organize a repayment plan for outstanding loans. Repayment plans range in duration from three to five years, and your creditors will legally have to accept the new terms of payment. A Chapter 13 is a valueable tool to help a debtor keep a home, pay back taxes, or keep all of their assets.
Contact a Bankruptcy Lawyer in St. Paul Today
If you find yourself buried under unmanageable debt, there is a solution. The bankruptcy lawyers at Solvent PLLC take the time to get to know you and your specific situation so they can make the best financial recommendations possible. Solvent lawyers know that bankruptcy solutions are not one-size-fits-all and it is important to file in the chapter that best suits your personal finances and future goals. Contact our office in St. Paul to speak to your attorney today.
