Chapter 7 Bankruptcy | Ron Lundquist Bankruptcy Lawyer - Eagan
Chapter 7 bankruptcy wipes out dischargeable debt completely. About 70% of Minnesota bankruptcy cases are Chapter 7 cases. Almost all of the remaining 30% are Chapter 13 cases.
During an initial consultation, you will find out whether or not you qualify for Chapter 7 bankruptcy. There are five important issues that determine eligibility and help decide whether Chapter 7 is the right type of case to file:
- - There are two ways your budget is analyzed. One is the Means Test, which looks at your income over the past six months and compares that income to a standard household income of your size in Minnesota. If your income falls short, you pass. Most clients pass the means test. The second method of budget analysis concerns your specific income and expenses. After expenses are counted against income, the resulting net amount may qualify you to file Chapter 7.
- - We inventory and assign value to your assets. Assets are valued in many ways, depending on the type of asset. For real estate, we generally assign a number based on the property tax value. For autos, we will look to NADA or Kelley Blue Book. For other items of personal property, we examine Craigslist or Ebay. We then protect these assets from being taken in the bankruptcy process by using the exemptions that Minnesota bankruptcy law and federal bankruptcy law allow.
- - I will look at your bills and order your credit report at no charge to you. I generally recommend that clients get a free credit report from annualcreditreport.com. We often acquire this in the office during the initial consultation. Through the credit report, we can determine how each of your creditors will be affected by your bankruptcy case. Most debt – such as credit card debt, medical bills, lines of credit, ready reserves, unsecured loans, repossession and second mortgage deficiencies, payday loans, and internet loans can be wiped out. Taxes, student loans, and child support debt generally cannot be wiped out, though there are some exceptions.
- - We analyze whether there have been preferences (payments to insiders or other creditors outside the normal course of business) or fraudulent conveyances (wrongfully selling or giving away an asset). It is rare that these issues arise for clients, but it’s important to stress not to engage in such activities. If you have already done so, you may not qualify for Chapter 7 bankruptcy.
- - We will analyze when your case will be filed, how long the process will take, and potential reasons for delay. Sometimes a client has to wait because they don’t pass the Means Test. More often, we will fast-track a bankruptcy case to be filed if the client is facing garnishment or some other legal action.
If we discover that you qualify to file Chapter 7 bankruptcy, you will be required to take an online credit counseling course and attend a hearing as a part of the bankruptcy process. Approximately 90 days after filing, you will receive a formal discharge, the court order that legally wipes away your debt and gives you a fresh start.
If you do not qualify for Chapter 7 bankruptcy, don’t be discouraged. There are other options, including Chapter 13 bankruptcy. Together, we will find a path that works for your specific circumstance and put you back in control of your finances!
I am recognized as a debt relief agency, and provide bankruptcy relief using the laws of the State or Minnesota and the United States Bankruptcy Code.
For more information about Chapter 7 bankruptcy, Chapter 13 bankruptcy, or the bankruptcy process, call 651-454-0007. I am here to answer your questions and give you the support you need to achieve a brighter future.