Minnesota Legal Blog

Throw Me a Lifeline! The Fundamentals of Chapter 7 and 13 Bankruptcy. Part 3: How Do I Get Started?

by | Aug 25, 2020 | Bankruptcy |

The idea of “bankruptcy” can carry a shameful stigma that steers individuals away from the idea.  But life (or COVID-19) happens!  Whether you are treading water in a pool of credit card debt, being crushed by medical bills, trying to make ends meet while furloughed from work or being hounded by creditors and/or collections agencies, sometimes the only option for relief is bankruptcy.  Bankruptcy can provide a fresh start that you desperately need.

While there are several types of bankruptcy, the traditional type people tend to think of when contemplating filing is a Chapter 7.  A Chapter 7 bankruptcy provides a liquidation and discharge of those debts which are dischargeable.  Another traditional type of bankruptcy is a Chapter 13.  A Chapter 13 bankruptcy is a reorganization in which your debts are restructured for partial or full payment over a period of time via a payment plan.

In Parts 1 and 2 of this series, we discussed whether you qualify for filing bankruptcy and whether your assets will be protected.  In Part 3, we will discuss how to get started.

Your first step is to call one of our attorneys!  We will work closely with you to compile the required documentation and determine the appropriate bankruptcy path for you to take. Then, we will file your case (either Chapter 7 or Chapter 13).  Once a bankruptcy is filed, an automatic stay comes into effect that prohibits creditors from taking further action against you (finally a time to breath!).

A Chapter 7 bankruptcy will last approximately 90 days from start (i.e. filing bankruptcy petition) to finish (i.e. discharge of debts).  A Chapter 13 bankruptcy will last as long as the payment plan is designed to last (typically three to five years).  During this time, there is one hearing that you must attend – Meeting of Creditors.  This meeting (normally about one month after filing) is when you are questioned under oath about your filings and financial affairs.  Do not worry!  We will have an in-depth discussion of what to expect well in advance of the hearing so that you are prepared and comfortable going in.  Additionally, we will be with you at the Meeting of Creditors to ensure everything goes smoothly.

The process of filing a bankruptcy can be daunting and overwhelming; but if you reach out to one of our attorneys and begin the bankruptcy process, then you will obtain that lifeline before you know it.