Am I eligible to declare bankruptcy? Once every eight years, you may file a Chapter 7 bankruptcy. The rules regarding when and how frequently you can petition for Chapter 13 bankruptcy are more complex. Your eligibility to file for chapter 7 bankruptcy does not depend solely on the quantity of your debt or your monthly income. Our responsibility is to determine if you are eligible to file and, if not, when you will be.
What is the distinction between chapters 7 and 13? Chapter 7 bankruptcy is commonly known as liquidation bankruptcy. You file, eliminate what debt you can, and retain what assets you're permitted to keep, and you're done in approximately 90 days. In Chapter 13, you agree to repay your creditors a portion of what they are owed over a period of up to five years. In exchange you get to retain your asset.
When do the contacts from creditors end? Once you file for bankruptcy, the law prohibits creditors from contacting you by phone or mail, continuing a lawsuit, or garnishing your wages; as a general rule, all creditor activity to collect a debt must cease.
What are the associated costs and fees? There is a filing fee that differs by jurisdiction. Currently, the fee in Minnesota is $299.00. Typically, the remaining costs consist only of your attorney fees.
What types of obligations are eligible for inclusion in my filing? You must list all debts on your petition. This includes credit card debt, student loans for medical school, secured debt such as lines of credit, home mortgages, and auto loans. If you owe money to a friend or family member, you must also list it. The omission of a creditor can constitute bankruptcy fraud.
What can I retain when declaring bankruptcy? There are restrictions regarding what you can keep under both federal and Minnesota law. Typically, you can retain your belongings and furniture. Per debtor, you can protect a certain quantity of equity in one vehicle. Your home's equity is also protected to a certain extent. Almost always, retirement accounts (IRAs and 401(k)s) are protected. The equity in your other assets will determine what you can retain and what you must purchase back from the bankruptcy court.""
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