If you’ve found yourself here, you’re probably seriously considering bankruptcy. While it may seem like an intimidating process, it’s actually a helpful tool meant to put you in good financial standing.


You might also be asking yourself which type of bankruptcy is right for you and your financial situation. I have worked as a bankruptcy attorney for nearly two decades, and I specialize in both Chapter 7 and Chapter 13 filings. Both types can serve you well depending on what kinds of debt you have as well as your income level. Let’s have a look at these types of bankruptcy.


Chapter 7 Bankruptcy

To file for Chapter 7 Bankruptcy, you must be found eligible. This eligibility depends on five factors that I will help you examine in an initial consultation.


Your budget can be assessed in two ways. First, we would calculate your income after your expenses, that amount may qualify you for Chapter 7. The other method is called a Means Test in which we compare your income over six months to a standard household income in Minnesota for a family your size. Simply, if your income is less, you qualify. Next, we would determine how to protect any assets, such as a vehicle or house, based on their value. They may be labeled exemptions, as allowed by state and federal law. Then we will assess your credit report and determine which creditors will be affected by your bankruptcy. Most types of debt are dischargeable, but there are exceptions such as taxes, child support, and student loans (which may be addressed in Chapter 13). Then we will look at any transactions that would disqualify you, such as selling an asset wrongfully. Lastly, we will assess if the timing is right.


If you do not qualify for Chapter 7, or have debts you wish to include such as income taxes or child support; Chapter 13 is still an option. This might also be your choice if you wish to pay back some of your debts or protect an asset that cannot be protected in Chapter 7.


Chapter 13 Bankruptcy

There are many reasons filing Chapter 13 might be right for you. Some people choose this filing type because they want and can pay back some amount of their debt. Again, for this type of bankruptcy, we will evaluate your budget to determine how much of your income can go toward repayments. The idea is, that when you’ve completed the repayment plan, your remaining debts are discharged. You may choose this type to stop foreclosure, stop repossession of a vehicle, include debts such as back-taxes or child support, or protect an asset.


The reality is if you’re considering bankruptcy it is very beneficial to work with an experienced bankruptcy attorney to guide you along the way. I would be glad to walk with you through the process and find the best option for you. Contact me today to setup an initial consult!