If you pass the Chapter 7 bankruptcy means test, you’ll need to take the time to consider the Chapter 7 bankruptcy advantages and disadvantages prior to filing.
Advantages of a Minnesota Chapter 7 Bankruptcy
- You receive a fresh start – after the bankruptcy is discharged, the only debts you owe will be for secured assets on which you choose to sign a “Reaffirmation Agreement” and any debts excluded (most taxes, student loans, child support) from a Chapter 7 discharge
- Creditor’s collection efforts and wage garnishment attempts are immediately stopped on the date of the bankruptcy filing
- Except for inheritances, any income you earn and property you acquire after the bankruptcy filing date are yours
- There is no minimum amount of debt required to file this type of bankruptcy
- Your case is often over (discharged) in about 3-6 months
Disadvantages of a Minnesota Chapter 7 Bankruptcy
- The trustee will sell any non-exempt property you own – if you want to keep a secured asset, such as a car or home, and it is not completely covered by your Minnesota bankruptcy exemptions then Chapter 7 is not an option
- The automatic stay created by filing Chapter 7 only serves as a temporary defense against foreclosure
- Co-signers of a loan can be stuck with your debt unless they also file for bankruptcy protection
- A Chapter 7 bankruptcy can only be filed once every eight (8) years
These are general guidelines for the Chapter 7 bankruptcy advantages and disadvantages.
Every situation is different and your circumstances will determine which type of bankruptcy, if any, is the best decision for you.
To learn about the options available to you, call us at 612.824.4357 or visit one of our offices in Minneapolis, St Paul, Blaine or Brooklyn Park for a free consultation with an experienced bankruptcy attorney.
You don’t need to spend a dime to get the legal advice you need to make this important decision.