Basic Bankruptcy Terms
The word “bankruptcy” may have earned a black mark among homeowners, businesses, and lenders, but the majority of bankruptcy cases serve to provide a fresh start for those struggling financially. Gale Law Firm strives to assist individuals and local businesses considering filing for bankruptcy in Bloomington, MN, providing legal support and counsel throughout the process.
- Debtor/Filer: This means you! The debtor or filer is the person petitioning to the U.S. Bankruptcy Courts for bankruptcy.
- Creditor: Your creditor is the person, business, organization, or agency to which you owe a debt. Your creditors can be priority, nonpriority, or unsecured nonpriority.
- Debts: Your debts are any contracted value titled in your name that you owe to a creditor. Debts can be secured or unsecured.
Assets: Your assets are any property, accounts, fund, or titles you own. Assets considered in your bankruptcy case will be a part of your bankruptcy estate.
- Credit Counseling: Before you file for bankruptcy, you’re required to attend a credit counseling session with a court-approved agency. Your bankruptcy attorney cannot qualify as your credit counselor, but may attend sessions with you.
- Bankruptcy Trustee: When you petition for bankruptcy, you’re automatically appointed a trustee through the Office of the United States Trustee. Your trustee will oversee your case and administer all proceedings involved.
- Means Test: When you petition for bankruptcy you’re also required to fill out a form to take the Means Test. The results of this test determine if you qualify for Chapter 7 bankruptcy, or if you must choose to file for Chapter 13 bankruptcy instead. The Means Test also determines how some areas of a Chapter 13 repayment plan will be resolved. Businesses filing for Chapter 11 do not take the Means Test.
- Exemptions: In bankruptcy, exemptions are amounts (monetary value) you can claim on your assets in your bankruptcy estate. In Minnesota, filers are allowed to choose between federal or state exemption amounts.
There are several kinds of bankruptcy chapters that filers can choose from, depending on their situation. Gale Law Firm can help you determine which chapter will be most advantageous for you. If you’re an individual consumer, it’s common to file for Chapter 7 or Chapter 13. If you’re a local business, it’s most common to file for Chapter 11.
When your bankruptcy case is complete, one of two things will have occurred. You have either completed your 3-5 year debt repayment plan, or your liquidation/discharge has been processed. You may face higher interest rates and lower credit, but you’ll have a fresh start from which to rebuild your finances. Your bankruptcy case will remain on record for 10 years.
To learn more about your bankruptcy options, email Gale Law Firm at firstname.lastname@example.org, or, if you’re ready for a free consultation or to begin filing for bankruptcy in Bloomington, MN, call us at (952) 888-5920 today.