Understanding What A Chapter 7 Bankruptcy is in Duluth, Minnesota

Posted by Wesley Scott on December 20, 2019 at 2:53 PM
Wesley Scott

What does a chapter 7 trustee do?Let’s face it, there are a lot better words in the English dictionary than bankruptcy. But, thank goodness we have a tool to fix a problem. It is not different than taking aspirin for a headache. What exactly is a Chapter 7 Bankruptcy?

A Chapter 7 Bankruptcy is also referred to as a “fresh start” bankruptcy. The focus in a Chapter 7 Bankruptcy is on your assets.  The fear is if you file Chapter 7 Bankruptcy you will lose all your assets. This is not true. In fact, a majority of Minnesotans who file Chapter 7 Bankruptcy each year lose no assets at all.

You see, in a Chapter 7 Bankruptcy you are required to disclose all your assets in the bankruptcy schedules. Then, you also can chose to exempt (read protect) your assets by using what we call “exemptions” (read statutory laws protecting assets). Once a majority of Minnesotans “exempt” their assets with available exemptions, they lose nothing to the Chapter 7 trustee.

Now, to the extent your assets are not exempt or the exemption has been objected to and sustained by the court, the Chapter 7 trustee’s job is to sell those non-exempt assets and use the proceeds to pay down your debt. Whatever debt that does not get paid off, gets “discharged” (read wiped out) forever, tax free! We do occasionally have clients that do have non-exempt assets they will lose. Now, we have to keep some perspective right? I mean if you lose 10k in non-exempt assets but wipe your liability out on 150k in debt, tax free, don’t you think that is a great deal!? We do!

CONCLUSION

When the time is right, or when you are ready, reach out to Minnesota’s LARGEST bankruptcy law firm at www.kainscott.com. You will be so thankful you did!

 

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