Chapter 7 bankruptcy is the most common form of bankruptcy used to address issues of bankruptcy for individuals and businesses. Almost all cases of Chapter 7 bankruptcy involve converting all of the debtor’s assets into a cash value—otherwise known as liquidity. Because Chapter 7 functions to turn a debtor’s property and assets into cash used to repay creditors, it is commonly referred to as liquidation bankruptcy. At Behm Law Group, Ltd., we offer professional guidance and legal protection in all cases of Chapter 7 liquidation bankruptcy in Mankato, MN.
Chapter 7 is often the best choice for individuals filing for bankruptcy because it provides an efficiently-governed breakdown of assets. This gives the debtor a debt-free new start while also allowing for several properties exemptions. This means that the federal court allows the debtor to withhold necessities of life—such as housing and transportation—from the bankruptcy process.
The common assets that are exempt from the Chapter 7 bankruptcy liquidation process are considered basic needs for the debtor, in terms of survival and ability to function as a contributing member of society. In the state of Minnesota, these debts include, but are not limited to:
- Homestead
- Household car or other means of transportation
- Pension or retirement benefits
- Personal property (such as clothing, appliances, furniture, food, wedding rings, and tools of trade)
- Insurance benefits
- Assistance and other benefits
- Wages
While the promise of these exemptions of property from the bankruptcy process are comforting, keep in mind that Chapter 7 bankruptcy doesn’t allow for the liquidation of several kinds of common debts. Not every debt is forgiven, and there are many cases where filing for bankruptcy is not ideal. Chapter 7 does not involve the following:
- Student loan debts
- Debts from fraud
- DUI and DWI debts
- Child support debts
- Tax debts
For more information about your options with liquidation bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200, or via email at stephen@mankatobankruptcy.com today.
