What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

The main difference between filing for Chapter 7 and Chapter 13 bankruptcy in Minnesota is the way the debts are handled. Chapter 7 bankruptcy in Minnesota is a liquidation bankruptcy that can eliminate most, if not all, of an individual’s unsecured debts, such as credit card or medical bills. To file Chapter 7, individuals must pass a means test to make sure they can’t afford to repay their debts. During the process, some of the debtor’s property is sold to pay creditors. Chapter 13 bankruptcy in Minnesota is a reorganization bankruptcy and allows individuals to keep some of their property, while paying off a portion of their debts over time. To qualify, individuals must have a steady income and a total debt that is below a certain amount. Individuals must also submit a repayment plan to the court that explains how they plan to repay their debts. Overall, filing for bankruptcy can be complicated and individuals should always seek advice from a qualified attorney before filing. The most important difference to remember between Chapter 7 and Chapter 13 is that Chapter 7 is a liquidation bankruptcy that eliminates most debts and Chapter 13 is a reorganization bankruptcy that allows individuals to keep some of their property and pay off their debts.

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What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

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