Bankruptcy in Minnesota mirrors procedures in most other states. However, there are certain peculiarities that everyone filing should be aware of. The following frequently asked questions are often submitted by people looking to file bankruptcy.

What can bankruptcy do for me?

Eliminate the obligation to pay most debts; stop a foreclosure; prevent repossession of a car; prevent wage garnishment; prevent termination of utility service; and challenge fraudulent debts.

What doesn’t bankruptcy do?

Eliminate certain rights of secured creditors; or discharge certain debts, including alimony, child support, most student loans, court-ordered restitution, and criminal fines.

How Often Can I File For Bankruptcy?

You may not file under Chapter 7 if you received a discharge under a Chapter 7 case filed in the last eight years or a Chapter 13 filed in the last six years.  You cannot receive a discharge in a Chapter 13 case if you received a discharge under a Chapter 7 case filed in the last four years or a Chapter 13 filed in the last two years.

Is Chapter 7 Right for Me?

Chapter 7 bankruptcy wipes out your debts in exchange for the surrender of property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt. But property that is not exempt is sold, with the money distributed to creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a Chapter 7 case is helpful, but you should also look at a Chapter 13 a possible option. If in doubt, it is wise to consult an attorney. How Much Does Filing For Bankruptcy Cost? The attorney fees varies on the facts of the case. The court filing fee for a Chapter 13 is $313.00 and the court filing fee for a Chapter 7 is $338.00. The court may allow you to pay this filing fee in installments if you cannot pay all at once. If you hire an attorney, you will also have to pay the attorney’s fees you agree to.

What Happens to My Home and Car if I File Bankruptcy?

In most cases, you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. (See Minnesota bankruptcy exemptions) Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13. It’s a complicated question with complicated scenarios that probably need to be addressed by an attorney before you file.

Will Bankruptcy Affect my Credit?

It’s a complicated question. If you are behind on your bills, your credit is already affected. Bankruptcy will probably not make things any worse. But since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills and improve your new credit rating.

How Long Does Bankruptcy Stay on Your Credit Record?

Ten years.

Does Minnesota have special exemptions?

Minnesota has bankruptcy exemptions for income and property in the areas of agriculture, personal vehicles, employee benefits, personal property, insurance, assistance benefits, and wages. When filing, it is wise to consult an attorney who can make sure any items falling into these categories are included in the bankruptcy filing. We’re sure you have many more questions. The legal experts at Hoverson Law have 30 years of experience dealing with financial problems. If you live in Minnesota and are contemplating filing for bankruptcy, call us now at (612) 349-2728 to get all of your questions answered.