Guidelines for Filing Chapter 13 in Minnesota

By Heather Frances J.D.

Personal bankruptcy can help Minnesotans with heavy debt loads get some relief and a financial fresh start. Most aspects of Chapter 13 bankruptcy proceedings are governed by federal bankruptcy rules rather than Minnesota state law, but some areas of bankruptcy are state-specific, such as where you must file your petition and which exemptions apply to your case.

Chapter 13

Chapter 13 is a form of personal bankruptcy that involves reorganization of your debt under the terms of a three- to five-year repayment plan. Unlike Chapter 7 bankruptcy in which most debts are wiped out, Chapter 13 filers must make payments on their debts over the course of the repayment plan; debts remaining at the end of the repayment period may be wiped out if they have not been fully paid. Thus, Chapter 13 allows filers to keep their property, catch up on mortgage payments and even halt the foreclosure process on a home. The repayment plan is central to a Chapter 13 case, which may take up to five years to complete.

Filing Chapter 13

Before you file for bankruptcy in Minnesota, you must attend an approved pre-bankruptcy credit counseling course. Bankruptcy cases are handled by federal bankruptcy courts, so you must file your petition in the U.S. Bankruptcy Court for the District of Minnesota. This court has offices in Duluth, Fergus Falls, Minneapolis and St. Paul. To begin your case, you must submit a petition and several other required forms, proposed repayment plan and filing fee.

Get a free, confidential bankruptcy evaluation. Learn More

Trustees

A court-appointed bankruptcy trustee manages your Chapter 13 case. He evaluates your proposed repayment plan by reviewing the forms you file, which list your creditors, assets, income and expenditures. The trustee has the authority to object to your proposed repayment plan. He will hold a “341 meeting" -- a meeting with you and your creditors -- to discuss your proposed repayment plan. At this meeting, creditors have a chance to ask you questions, but frequently do not attend.

Exemptions

Bankruptcy exemptions remove certain property and assets from sale in a Chapter 7 proceeding, but in a Chapter 13 case, the bankruptcy court also uses them to determine how much money you have available to pay certain creditors. Minnesota law allows you to choose either Minnesota’s exemptions or the exemptions available under federal law -- but not both. Minnesota’s exemptions tend to be more generous than the federal exemptions and include a certain amount of equity in your home, vehicles, clothing, furniture, appliances, books and other personal property.

Get a free, confidential bankruptcy evaluation. Learn More
How to Declare Bankruptcy in Illinois

References

Related articles

Federal Vs. State Exemption for Chapter 7

In a Chapter 7 bankruptcy, you ask a federal court for protection from creditors. The court issues an automatic stay, which bars any collection actions or lawsuits against you. The law requires you to provide a list of all your property, including homes, cars, cash, investments, jewelry and other valuables, furniture, and business supplies. A court-appointed trustee may seize some of your property, depending on the type of debt in need of repayment. Federal law provides exemptions that allow you to protect some of your property from seizure. In addition, the states have their own rules regarding exempt property.

Facts About Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy is a big decision that will affect your credit score and ability to qualify for personal loans and credit cards in the future. Therefore, getting the facts is essential. For example, you must first determine whether you are eligible to file for Chapter 7 bankruptcy. If you do file, you will have to appear at a meeting of creditors before you will receive a bankruptcy discharge.

Can They Foreclose on Your Home If You Have Filed Chapter 7?

If you're in over your head with debt, filing under a Chapter 7 bankruptcy is one option to obtain financial relief. However, Chapter 7 may not prevent the foreclosure of your home. On the other hand, and depending on your circumstances and the laws in your state, you may be able to save your home even after declaring Chapter 7 bankruptcy.

Related articles

Rules for Declaring Bankruptcy in Kansas

When a Kansas resident wants a clean financial slate, he may file for bankruptcy protection under Chapter 7 or Chapter ...

Laws on Debt Forgiveness Through Chapter 13

When debt piles up, individual debtors may need the structure of a bankruptcy case to get back on their feet again. If ...

How to File Bankruptcy in Washington State

If your debts are beginning to overwhelm you, you may be considering bankruptcy to help you get back in control of your ...

Chapter 7 Vs. Chapter 11 Bankruptcy in Tennessee

If you are facing bankruptcy, due to overwhelming personal debts or a failing business, federal bankruptcy laws offer ...

Browse by category
Ready to Begin? GET STARTED