There are many ways to resolve debts that you would otherwise never be able to repay, but the fastest and permanent way is through bankruptcy. Depending on the type of bankruptcy you file, your case could be processed as quickly as three to four months. In comparison, debt relief programs can take up to two to four years to handle your case, are rarely successful, and, in the few cases that are successful, can greatly increase the costs and the amount of time it takes to repay your debts by up to five years. Individuals can file a Chapter 7 case, which permanently discharges debts in exchange for the liquidation of non-exempt assets, or a Chapter 13 case, which reorganizes debts into a manageable repayment plan lasting three to five years where you pay only a portion of your debts at no interest, late penalties or fees. If you’re considering filing for Chapter 13 or Chapter 7 bankruptcy in Owatonna, MN or the surrounding area, Behm Law Group, Ltd. can provide comprehensive legal support and protection throughout your case.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common kind of individual consumer case. However, it does require filers to pass the Means Test in order to qualify. The Means Test measures your debt-to-income ratio. If that ratio is lower than the state median or average income for a similarly sized household, you’ll be eligible for a Chapter 7 case.
Steps in Chapter 7 Filing
There are many steps to a Chapter 7 case, including pre-bankruptcy requirements, paperwork, and the meeting of creditors, but when the necessary, sensible and understandable steps are completed, the bankruptcy court will grant a permanent discharge of most of your debts.
Discharge of Debts
Once the bankruptcy court approves the discharge of your debts, the bankruptcy court will issue a discharge order and a “discharge letter” will be mailed to your creditors and to you, officially and permanently ending your legal responsibility to repay all discharged debts. This order will wipe out all qualifying debts, including credit card, utility, medical, and personal debts. The discharge letter/order is typically sent 60 days after your meeting of creditors.
If you have properly asserted exemption claims regarding your property, your case will be fully closed and you will be able to move past your bankruptcy and move forward to a better and brighter future with much less stress. In the majority of cases, people can assert exemption claims as to all their property items. In most cases, people do not lose any property.
Trustee Final Report
Your case is closed when the trustee files their final report. This report and the final decree of the court usually closes your case for good. However, bankruptcy cases can be reopened for various reasons. For instance, if a creditor you listed in your bankruptcy case is still bothering you for repayment of its debt, you can reopen your bankruptcy case to initiate a lawsuit against that creditor and ask the bankruptcy court to punitively sanction the creditor. Also, if you forgot about an asset and did not disclose the asset in your initial bankruptcy paperwork, you could reopen your bankruptcy case to amend your bankruptcy schedules to list the asset.