Chapter 7 bankruptcy is a beneficial option that allows homeowners to avoid Foreclosure Woodbury MN. Through this process; the consumer is given a fresh start, and it initiates an automatic stay to prevent foreclosure. All assets that are available for liquidation are sold based on the requirements of the bankruptcy and used to pay off the consumer’s debts. However, the consumer must qualify for this chapter to file a claim. Visit www.brokemn.com for more information.
Qualifying for Chapter 7 Bankruptcy in Minnesota
The state of Minnesota, like most, adheres to the Bankruptcy Prevention and Consumer Protection Act initiated in 2005. This law requires that all residents of the state must qualify based on the means test utilized to determine whether he or she can pay higher portions of the debt. The eligibility requirement for Chapter 7 implies that the consumer’s income is below the median income level for the county in which he or she is a resident. Currently, the income averages for Washington County are $79,109 for individuals and $92,087 for couples.
How Does it Work?
The consumer attends a hearing with all creditors and the presiding judge to discuss the terms of the bankruptcy. The judge determines which debts are eligible for discharge. Next, he or she evaluates the market value for the assets to establish whether their value is adequate enough to settle the debts. After the bankruptcy is approved, the judge defines any stipulations that apply. For instance, if the claimant is a business owner, he or she may be required to cease all operations until the finalization of the bankruptcy.
The bankruptcy court assigns a trustee who manages the sale of the listed assets. The proceeds, from these sales, are distributed to the creditors to settle the debts. Any exemptions that apply to these assets are paid to the consumer directly.
Primarily, consumers choose Chapter 7 to eliminate unsecured debts such as credit cards and to avoid Foreclosure Woodbury MN. It allows for a reaffirmation process in which the consumer re-establishes debts such as automobile loans and mortgages if they were not settled during bankruptcy. Consumers who require assistance with bankruptcy claims or reaffirmations may contact the Lamey Law Firm for further assistance.