What Kind of Bankruptcy Should I File? Comparing C13 and C7 Bankruptcy

Posted by Wesley Scott on December 15, 2020 at 2:55 PM
Wesley Scott

Photo of five plastic question marks on thin post much like drink stirrers; the yellow, magenta, orange and green question marks are blurred against a white background, with a turquoise question mark in focus in the foreground. The question marks represent the question of, What bankruptcy should I file?If you live in or around Eden Prairie, Minnesota there is an easy way to determine if you file bankruptcy, which Chapter you will end up in. For those of you who have the ability to make a payment back to your creditors, you must do so. For those of you who cannot make a payment back to your creditors you likely will not be doing so.

First, sit down and determine your net monthly household income. Second, put together a list of your reasonable and necessary expenses, but leave out all payments on unsecured debt. If your net income exceeds your reasonable and necessary expenses, chances are good you will be looking at a Chapter 13 Bankruptcy. If your reasonable and necessary expenses exceed your net monthly household income, chances are you will be filing a Chapter 7 Bankruptcy.

The critical piece of this is what is determined to be a reasonable and necessary expense? Is saving for a bi-yearly trip to Hawaii a reasonable and necessary expense? No, it is not. Is driving a Cadillac Escalade with a $1,300.00 a month payment reasonable and necessary? No, it is not. What about an expense for monthly wine and fine cigars at $500.00? No, it is not. I remind clients, while you get to live, you don’t get to live really well while you are in a bankruptcy.

While in bankruptcy, you will be able to pay your mortgage payments, utilities, food, clothing, personal care products and services, vehicle payments, insurance, medical expenses, a little recreation, pet expenses, home maintenance costs, and school costs. But luxury items will be suspended while you are in bankruptcy.

CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT KAIN & SCOTT

 When the time is right, or when you are ready to get your life back, reach out to Minnesota’s largest bankruptcy law firm by going now to www.kainscott.com. You will be so glad you did!

 

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