Minnesota Bankruptcy Law
Minnesota bankruptcy procedures and laws are quite similar to other states. An individual or corporation can either voluntarily file for MN bankruptcy, or they may be forced into the action. Different types of MN bankruptcy allow a person or corporation to either clear, partially clear, or reorganize their debt so it becomes easier to pay. Regardless of your situation, it’s always a good idea to hire a Minnesota bankruptcy lawyer in the state of Minnesota. Your lawyer will help you work with creditors and establish which type of bankruptcy is best for you.
Minnesota Bankruptcy : Corporate
Like in most other states, the state of Minnesota often requires businesses and corporations to file Chapter 11 bankruptcy. This type of measure allows a corporation to reorganize their debt. Yes, this type of measure will often make a corporation’s stock value fall, but if all measures are handled accordingly, the company may be able to save the value of its shares. A corporation can also file MN bankruptcy voluntarily or be forced into filing by a creditor and judge.
Minnesota Bankruptcy : Personal
In the state of Minnesota, most individuals will file for either Chapter 7 or Chapter 13 bankruptcy. These two different forms of MN bankruptcy provide families with different options, so it’s always smart to work with a lawyer before and while filing for Chapter 7 or Chapter 13.
MN Bankruptcy Chapter 7
This type of bankruptcy is often known as straight or liquidation. All of your debt will likely be cleared in such a case, but creditors can still retrieve some of your personal property if the settlement mandates it. However, within the state of Minnesota, people are often entitled to exemptions from creditor retrievals. The following exemptions exist within the state of Minnesota:
• Real estate- up to $200,000 in equity can be protected
• Automobiles- only under certain circumstances
• Personal property- musical instruments, family photos, burial lots, household appliances, and multiple other items not exceeding $4,500 in value
MN Bankruptcy Chapter 11
This type of bankruptcy is usually limited to corporations and is used to reorganize the finances of the business. The valuable assets of the company members are protected, but the company stock is always in danger in a Chapter 11 case. After a settlement is established, a debtor and often owner of the company will be in charge of most of the duties.
MN Bankruptcy Chapter 13
This type of bankruptcy is often known as wage earner or repayment. You will often meet with a creditor during the bankruptcy litigation and establish a plan for repayment and a base number of debts that must be paid back. The advantage in filing Chapter 13 is that, in most cases, your property won’t be liquidated. However, you can only file for Chapter 13 bankruptcy if your debt is low enough. Also, if your income exceeds the median income in the state of Minnesota, you will be required to stay within a payment plan for five years.
As in most other states, your tax returns may be considered an asset. If you file for Chapter 7, you may have to give up your tax return funds in order to pay a creditor. If you file under Chapter 13, however, your tax returns are usually protected.
Filing for Minnesota Bankruptcy
In order to file for Minnesota bankruptcy, you are required to submit various documents, forms, and fees. It’s always a good idea to hire a Minnesota bankruptcy lawyer to help you through filing all the forms and documents, choosing an appropriate bankruptcy plan, and working with the creditors.