Minnesota Bankruptcy Laws are based on two basic amendments, bankruptcy under chapter 7 and bankruptcy under chapter 13. Although both forms are quite similar in content, it is important to understand the basic concepts of the two to ensure successful claims and to know which chapter to file under. There are various differences that need to be understood by prospective clients in order to file under the correct chapter.
Chapter 7 bankruptcy deals with when the consumer is liable to execute all his assets that are by law non-exempt. The money which is then resulted from this execution is used to pay back the debts owned which are secure or unsecured. By doing this, the individual is emancipated from any debts that he was liable to pay before the issue of bankruptcy was filed. Also, non liable property or items may also be kept by the person filing the bankruptcy petition. However, this is not an opportunity that is freely available and is subject to thorough limitation pertaining to the value of the items in question. Some of the items that may be exempt and kept by the consumer include family homes, certain belongings and assets in the house and cars. Under Minnesota bankruptcy law, creditors and debt collectors will then be unable to call the consumer or contact him in any way providing a safe immunity region to the consumer.
Under Chapter 13 bankruptcy, also known as the wage earner’s petition the consumer is liable to reimburse the debts before he filed for Chapter 13 bankruptcy. In this way, whatever money that is provided after filing for the bankruptcy petition, is used to come up with a plan to repay all debts for the next couple of years. This provides payment of all debts, and financial security. Emancipation is granted to the consumer only after the payments have been fully paid. Chapter 13 bankruptcies provides the same security as Chapter 7 in that debt collectors are unable to call, harass or take any sort of legal action.
As Chapters 7 and 13 are for individuals to file, business and corporations can file for bankruptcy under Chapters 7 and 11. As in the case of individuals, it is equally important for business to determine which bankruptcy petition to file under and the similarities and differences between the two. Bankruptcy should only be filed if there is no choice left up to the business. Where alternate solutions are available, filing for bankruptcy can prove to be hazardous to a company’s future.
Chapter 7 bankruptcy for business has the same rules and regulations as those of Chapter 7 for individuals. Under Chapter 11 bankruptcy, the bankruptcy court looks over the assets of a business while the business itself is obliged to restructure their debts. When Chapter 11 is filed in Minnesota, no trustee is allotted to the state. A bankruptcy court needs to approve the filed bankruptcy petition and the expenses occurred are to be the responsibility of the business who has filed. After this, the business is also required to pay its secured debts.
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