Despite your best efforts, you are in debt over your head and don’t see a way out. It is time to file for bankruptcy. This is your chance for a fresh start at getting your finances in order, and you may be able to keep many of your assets. You won’t be starting over with nothing, but some sacrifices will be made. Before you file, here’s what you should know about filing Chapter 7 bankruptcy in Minnesota.
Bankruptcy Stops Asset Collection Attempts
One of the first pieces of relief from filing bankruptcy is that you won’t be harassed by creditors anymore. Once you file, they are not allowed to call and harass you for payments anymore. They must file a claim with the bankruptcy court to collect anything from you. It may not seem like much at first, but not worrying about who is on the other end of the call before you pick up is just the start of the relief a bankruptcy can provide.
Some Assets Are Protected During Bankruptcy
No matter who you owe money to, some assets won’t be included in the bankruptcy process. In Chapter 7 bankruptcy, your assets are collected by the court, sold, and used to pay off as much of your debt as efficiently as possible. However, certain assets are exempt from this.
There are exempt assets in bankruptcy for Minnesota and on a Federal level. Some of these exempt assets include:
- Primary residences under $450,000 in equity value
- Primary vehicles not used for work and under 15,000 lbs
- $11,200 in personal items or household items
- Wedding rings or similar items
- $12,000 in work tools
- Up to $10,000 in life insurance
These are often items essential to your life (i.e., cars and houses) or highly personal things (i.e. wedding rings). Thankfully, these are the assets you can keep when you start your financial life.
Everything Else Goes Into A Trust
All your other assets go into a trust managed by a court-appointed trustee. It is usually a lawyer who handles these cases for the court system. Their job is to sell those assets for as much as they can get and manage the payouts to the creditors.
Interestingly, anyone can buy from the trust, including you. If you can somehow find funds for it, you can buy some of your other things from the trust and keep them. That is how some people who file for bankruptcy come out of it without losing much.
Get Help Making Bankruptcy Work For You
Bankruptcy can be a second chance at making your financial life work, but you will likely need help. Fortunately, you can get help from Minnesota bankruptcy attorneys Kain + Henehan. We work with clients daily to ease the pains of bankruptcy and help them gain a fresh financial start.
Contact Kain + Henehan at (612) 438-8006 or complete the online form. We offer free consultations to help you better understand your options. We can even help you file for and manage bankruptcy when you are ready.
