The United States recently changed its laws for how bankruptcy is to be
handled. The stipulations for granting petitions for Chapter Seven
bankruptcy have become more difficult - as a result Chapter Thirteen
bankruptcy payments have increased. In fact, eligibility for bankruptcy
has become increased all together.
Applying for bankruptcy in the past was as easy as filing a few forms
of documents. Now, with the new laws, bankruptcy requires more
information and many more documents. Due to this change it is often
advised to consult an attorney rather than file online through a
do-it-yourself program. If any paperwork is filed incorrectly or any
information filed is later discovered to be false, the case will be
thrown out. Couples may file for bankruptcy in a joint petition or an
individual can file by him or herself.
Different Forms of Minnesota Bankruptcy
Minnesota has different kinds of bankruptcy that allow individuals
relief from their debt problems. These two kinds of bankruptcy depend
on the amount of debt, the number of people residing in a household,
the household income, and the current debt payment amounts.
An individual's income and situations will be calculated along with the
statewide income for Minnesota. These calculations will designate if an
individual is eligible for bankruptcy and, if so, which kind. As simple
difference between Chapter Seven bankruptcy and Chapter Thirteen
bankruptcy is the monthly amount that can be paid towards the debts.
Chapter Thirteen Bankruptcy
If an individual can pay a minimum of one hundred sixty dollars a month
on his or her debts, he or she will be eligible for Chapter Thirteen
bankruptcy. This kind of bankruptcy takes an individual's income and
separates it into a personal payment plan. The payment plan will
require monthly payments be made over a five-year time span. If any
payments are missed, consequences will subsequently follow. Chapter
Thirteen bankruptcy can also have plans as low as three years but plans
cannot exceed five years.
Chapter Seven Bankruptcy
If an individual cannot pay more than one hundred dollars a month on
his or her debts, he or she will be eligible for Chapter Seven
bankruptcy. Instead of adapting a payment plan for the debt problems,
an individual will be assigned a trustee. The trustee will then place
the maximum values of non-exempt property and sell the property.
The acquired funds will then be used to pay creditors and halt
foreclosures. Chapter Seven bankruptcy can be completed in six months
or less but normally no less than three months. How much property is to
be sold depends on the amount of the debts and the value of the
If the individual can pay more than one hundred dollars but cannot yet
pay one hundred sixty dollars, he or she will most likely be granted
Chapter Seven bankruptcy.
Individuals have the right to choose federal exemption statues over
Minnesota exemption statues. These exemptions can include pensions,
motor vehicles, homes, insurance coverage, most personal property under
seventy-two thousand dollars, public benefits, livestock, tools for
usage in a trade, and unpaid wages.