The decision to file for bankruptcy is a serious one. But when you are constantly hiding from the phone due to calls from creditors, you know that something has to be done. To make the right choice, it’s important to consider a few key factors. Do you have any income at all, and if so, is it enough to make a monthly payment that encompasses all your debts? Do you want to keep a home and prevent the lender from foreclosing on it? Are you in so much debt that there’s no way you can repay it? All of these things must be taken into consideration when you make your decision about filing for bankruptcy. An experienced bankruptcy lawyer is someone who can answer your questions and help you make a good decision.

Chapter 7 or Chapter 13?

There are two main types of bankruptcy that are commonly filed by people who are in financial distress. These are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy is a better choice for those who have very low income or so much debt that there is no way it can be repaid. This type of bankruptcy discharges, or cancels, nearly all of your debt, allowing you to start over with a clean slate. If you desire a fresh start in 90 days, this is a good option. Chapter 13 bankruptcy is less drastic and allows you to keep most of your assets. It is simply a sort of restructuring in which all of your debts are consolidated into one manageable monthly payment, giving you time to catch up on issues like late mortgage payments or auto loan payments.

Bankruptcy and Your Credit

Bankruptcy will nearly always have some sort of negative effect on your credit, but if you are chronically late making payments anyhow, it probably cannot make your credit score much worse. Besides, once you file, you’ll have a chance to rebuild your credit by starting over again if you’ve chosen Chapter 7 bankruptcy or by making your new payments on time if you’ve filed for Chapter 13 bankruptcy. Within a year or even less, your credit score can be better than it ever was, and it’s still possible to get an FHA loan within about two years after filing Chapter 7 bankruptcy.

Call to Schedule a Consultation With a Minnesota Bankruptcy Lawyer Today

If you want to learn more about bankruptcy options, call to schedule a consultation with a Minnesota bankruptcy lawyer today. The experienced experts at the Hoverson Law Offices, PA are ready to answer any questions you have and help you make a choice that works for you.  Visit our website at or give us a call at 612-349-2728 and schedule a consultation with our professional staff. We’ll help you get back on your financial feet.