Understanding Minnesota Bankruptcy Laws

Understanding Minnesota Bankruptcy Laws
By: Gabriel Adams

Although the two forms of bankruptcy - Chapter 7 and Chapter 13 - are similar, there are many differences that the consumer needs to be aware of before deciding which form of bankruptcy to pursue.

With Chapter 7 bankruptcy, the consumer liquidates all of his or her non-exempt assets. The money gained is then used to pay back both secured and unsecured debts. In this way, the consumer is able to receive a discharge of all of the debt he or she had prior to filing the bankruptcy petition. In addition, the consumer may keep certain exempt property, though there is a limit to the value of the items kept. Items that may be eligible include:

Family Home
Car
Household Possessions

By filing a Chapter 7 bankruptcy, the consumer can prevent creditors from calling or from making contact in any way.

With a Chapter 13 bankruptcy, which is sometimes referred to as a "wage earners" petition, the consumer actually repays the debts that were created prior to filing bankruptcy. By using the money he or she earns after the bankruptcy, the consumer generally develops a repayment plan for the next three to five years. After completing all of the scheduled payments, the consumer is granted a discharge. As with a Chapter 7 bankruptcy, a Chapter 13 bankruptcy puts an end to phone calls from creditors. In addition, they creditors may not take any legal action against the consumer.

Just as there are two forms of bankruptcy an individual may file, businesses also have two choices: Chapter 7 or Chapter 11. A good lawyer will work closely with each of their clients in order to help them determine which form of bankruptcy is best for the future of their business. In addition, a lawyer should never never push a business to file for bankruptcy if there is a possibility the business can work with its creditors to restructure its loan agreements. Of course, if bankruptcy is the best option, a lawyer will file the appropriate paperwork on the client's behalf.

With a Chapter 7 bankruptcy, the company liquidates all of its non-exempt assets so it can pay its creditors. With a Chapter 11 bankruptcy, on the other hand, the business reorganizes its debt and the bankruptcy court supervises the estate. Unlike some other states, there is no trustee appointed to the state when Chapter 11 if filed in Minnesota. A Chapter 11 bankruptcy must be approved by the bankruptcy court during a confirmation hearing and the business is responsible for paying all administrative expenses. In addition, the business is still expected to repay its secured creditors.

Getting Creditors Fair Treatment During a Minnesota Bankruptcy

Services a lawyer can provide to creditors include:

Proof of Claim
Reaffirmation Agreements
Attending 341 Meetings
Filing Motions for Relief From Automatic Stay in both US Bankruptcy Courts and in the District of Minnesota

Your lawyer can also provide creditors with representation when involved in a contested bankruptcy litigation. This includes:

Preferences
Fraudulent Transfers
Adversary Proceedings falling within Bankruptcy Rules 7001-7087

If you think that you may need to declare bankruptcy, it is essential that you contact your lawyer right away to start the proceedings.

Article Source: http://www.articlesbase.com/law-articles/understanding-minnesota-bankruptcy-laws-328438.html

About the Author: Gabriel Adams. Read up on Minnesota Chapter 11 Bankruptcy and Minnesota Chapter 13 Bankruptcy and Minnesota Chapter 7 Bankruptcy.