Minnesota Chapter 7 Bankruptcy
If you are thinking about filing for Chapter 7 bankruptcy in Minnesota, you need to consider hiring a Minnesota Bankruptcy lawyer. A Chapter 7 bankruptcy is the most common type of bankruptcy and once a discharge is granted, it allows an individual or family a fresh start. In Minnesota, a Chapter 7 bankruptcy will discharge an individual from most types of debt. The most common debts are credit card debt and home mortgage debt.
One of the most important features of bankruptcy to individuals and families is the “automatic stay” that goes into effect after filing for bankruptcy, which is a special designation designed to stop phone calls and letters from creditors. It will also stop all wage and bank garnishments from happening until the automatic stay is lifted or a discharge of debt is granted by the court. This provides some breathing room from creditors for families and individuals.
Other types of debts will not be discharged through bankruptcy. Some of this debt includes: student loan debt, tax debt that is less than three years old, child support payments, spousal maintenance payments, and judgment debt incurred through intentional torts. The lists above pertain to dischargeable debt and do not include all debt. A Minnesota bankruptcy lawyer should be consulted regarding dischargeable and non-dischargeable debt.
Changes for Minnesota Chapter 7 Bankruptcy
The bankruptcy laws changed in 2005 and one of the main additions to the law was the inclusion of a uniform income standard to determine if someone is eligible for a Minnesota Chapter 7 bankruptcy. In Hennepin County, Minnesota, for example, the income limit for filing a Chapter 7 bankruptcy for a household of one is $43,965. For a two-person household the limit is currently $58,705. The income limit continues to increase as more people are considered members of the household. The median income figures change and a Minnesota bankruptcy lawyer should be consulted before filing for bankruptcy.
An individual may still be eligible for a Chapter 7 bankruptcy if they make more than the median income but they must complete and pass the means test. The means test is a complicated formula and will allow a Minnesota Chapter 7 bankruptcy discharge to be granted if an above-median income individual has less than $100 of disposable income every month to pay back creditors. Not all payments can be deducted on the means test and a Minnesota bankruptcy lawyer should be consulted prior to filing a bankruptcy using the means test.
Once the decision has been made to file a Chapter 7 bankruptcy, the typical process is to retain a Minnesota bankruptcy lawyer to fill out the bankruptcy petition, which will include information regarding all of an individual’s assets and debts and gives the court information regarding their income.
What happens next in a Minnesota Chapter 7 Bankruptcy
After the petition is filed with the court, the next step is a “341 meeting” with the panel trustee who will be handling the Chapter 7 bankruptcy. A typical 341 meeting takes five to fifteen minutes depending upon the complexity of the case. Creditors and the U.S. Trustee can object to your bankruptcy petition for sixty days after the 341 meeting. If no objection is filed by a creditor, the U.S. Trustee, or any other interested party the Chapter 7 bankruptcy discharge should be granted.
It is important that credit cards not be used after deciding to file for a Chapter 7 bankruptcy. If credit cards are used in anticipation of filing for bankruptcy it is considered bankruptcy fraud, it would subject the individual to criminal penalties and the debt would not be discharged.