Those who are considering filing for bankruptcy most likely have more than one debt to tackle among their financial obligations. In fact, virtually every bankruptcy filer faces several debts accumulated over years. From mortgages to credit card debt, filers often have a wide range of debts to repay. If these filers pass the Minnesota Means Test, they qualify for Chapter 7 bankruptcy, which allows the majority of their debts to be discharged. If you qualify for Chapter 7 bankruptcy in Marshall, MN, Behm Law Group, Ltd. can help you throughout the process of petitioning and filing with professional legal advice and assistance.
When it comes to discharging your debts in Chapter 7 bankruptcy, the process is determined by your exemptions, your qualifying debts, and a number of other factors regarding your household status. In a case where the bankruptcy trustee is able to collect money to pay some dividend to your creditors, the question remains of how the money will be allocated. First and foremost, any financial obligations falling into the category of “priority debt” will be paid something before any other debts such as credit card debts, medical debts, etc. receive anything. 11 U.S.C. §507 sets for the priority of how debts are to be paid in bankruptcy cases.
Priority debts will be paid first. If there is any money left after those debts are paid, then other creditors with lower priority, such as credit card debts or medical debts, will receive a dividend from the trustee. Unfortunately for the filer, most priority debts are not subject to discharge and must be fully repaid.
Priority Debts: Debts involved in individual consumer bankruptcy cases are considered priority if they are categorized as the following:
- Deposits up to $2,850 for property purchases, leases, or rentals
- Deposits up to $2,850 for services pertaining to household, family, or personal use that were not provided
- Alimony, child support, or other familial maintenance and obligations
- Wages, salaries, commissions, or other compensations owed to employees up to $12,850 per person within 180 days of filing for Chapter 7 bankruptcy
- Debts owed to farmers and fishermen up to $6,325 each
- Income taxes owed within three years before filing for bankruptcy
- Taxes withheld from employees but not paid to the taxing authorities by employers
- Any customs, duties, and penalties due to the federal, state, and local governments
- Personal injury or death claims against you from driving under the influence
With the help of our experienced bankruptcy attorneys, you can navigate your own case when it comes to priority debt, asset liquidation, and debt discharge. For more information about filing for Chapter 7 bankruptcy in Marshall, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.