19 Dec Filing For Bankruptcy In Minnesota: Who Can File?
When it comes to bankruptcy almost anyone can file. This includes large businesses, small businesses, and individuals. Depending on your situation the type of filing you qualify for will change.
Large or Small Businesses
Large businesses typically lean towards a Chapter 11 filing. This filing allows them to maintain control of their company while it is restructured to become profitable. Any shareholders or company leaders will have the right to vote on any decisions made during a Chapter 11 filing.
If an agreement can’t be reached then the bankruptcy fails. If the bankruptcy fails the company is then sold to pay for the debt owed.
Small business owners have the option to file for a Chapter 7 bankruptcy. This eliminates most or all of the debt they may owe. This only works for small business owners who are personally liable for the businesses debts. If you are a LLC or corporation you’ll want to stick to a Chapter 11.
Individuals who file for bankruptcy will be directed to either a Chapter 7 or a Chapter 13 filing. A Chapter 7 filing is for those with an abundance of unsecured debt and no way to pay it off. When you file a Chapter 7 bankruptcy you will lose a lot more personal property than if you file a Chapter 13.
However, your filing will be over in 3 to 6 months rather than the 3 to 5 years of a Chapter 13.
Whether you are married or single you will more than likely end up qualifying for a Chapter 13. It’s the most common and the one most people end up filing. With a Chapter 13 your assets are evaluated and you are given a payment plan to repay the debts that you owe. It’s important that you stick to this plan to ensure a successful bankruptcy.
A Chapter 13 can take up to 3 to 5 years and stay on your credit for 7 to 10 years. A Chapter 7 is almost guaranteed to stick on your credit for the full 10 years. Due to the fact that you are paying most of your debt off with a Chapter 13 filing you have the opportunity to remove it from your credit earlier.
The first thing you want to do when filing for bankruptcy is to figure out what you’re dealing with. This means gather all of your financial information up and take a look at it. This will give you a better idea of where you stand financially before you meet with an attorney or directly with the court.
Next step in your filing would be to decide whether you want to use a bankruptcy attorney or file on your own. If you are a large or small business using a bankruptcy attorney has it’s obvious benefits. If you are an individual the benefits are typically the same. The bankruptcy attorney acts as a buffer between you and the court and will speak on your behalf.
They will be there to answer any questions and calm any concerns you might have during the process. After you’ve made this decision you’ll want to start the process of filing for bankruptcy.
The Bankruptcy Process
The first thing that happens when filing for bankruptcy is the court will review your debts. They will also determine, based on what you told them, what your assets equal to. If you are doing a Chapter 11 filing you will have a certain time period to get your company back to a profitable state.
If you are filing a Chapter 7 the process will move quickly and you’ll notice a change almost immediately. For Chapter 13 the process is a little more drawn out, but you will know what you will be paying rather soon as your payment plan will start before your bankruptcy even gets confirmed.
It’s important during your bankruptcy filing and process thereafter that you work with the court. Be open and honest about all assets you have as lying to the court is a felony and can result in jail time.
If you hire a Minnesota bankruptcy attorney they will be able to help make sure you have everything you need before you leave the gate. If you are on your own it’s important that you do as much research as possible. Knowledge is confidence when facing the court and tackling your payment plan.