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Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is referred to as the “liquidation” bankruptcy or “straight” bankruptcy.

This is by far the most common form of bankruptcy that is filed. Chapter 7 is available to individuals, married couples, partnerships, and corporations. Individual debtors are usually granted their discharge within 90 days of the date of filing.

Bankruptcy Qualifications

In order to qualify for a Chapter 7 Bankruptcy, you cannot have filed for a previous Chapter 7 within the past eight years and you must be able to pass the Chapter 7 means test (income test). If you qualify, you may be able to discharge most of your credit card bills, medical bills, repossession deficiencies and older taxes. Most people are able to keep all of their personal property. If you don’t qualify for Chapter 7, you can file Chapter 13.

Filing for Chapter 7 initiates the “automatic stay” – which is an immediate protection for you. It will stop wage garnishments, creditor harassment, and will provide temporary relief to home foreclosure proceedings and car repossessions. Mortgage companies and automobile lenders will continue to accept monthly payments on the debts owed to them, as long as you remain current.

Ask A Question

There are certain debts that a Chapter 7 Bankruptcy does not allow you to discharge. Some of these debts include:

1. Recent taxes
2. Student loan debt
3. Child support obligations
4. Spousal support obligations
5. Debts not listed in the Chapter 7 Petition
6. Credit that was obtained from fraud
7. Debts with co-debtors – your co-signer will be liable for the full amount of the debt unless they also file bankruptcy

All Our Bankruptcy Services

  • Chapter 7 Bankruptcy – Also known as “liquidation bankruptcy,” this form of bankruptcy involves selling your assets in a short timespan to pay off your debts. Our bankruptcy attorneys can help you file for Chapter 7 and work through the full process with you.
  • Chapter 13 Bankruptcy – Depending on your specific financial circumstances, your better choice may be to file for Chapter 13 bankruptcy, which allows you to restructure your debts as part of a multi-year repayment plan. Our lawyers can advise you if Chapter 13 is the right choice and aid you with the legal process.
  • Civil Judgment – If you’re in debt, a court may pass a civil judgment against you on behalf of a creditor. In this scenario, your best option is to seek representation from an experienced bankruptcy lawyer.
  • Creditor Harassment – When people are in debt, they often have to contend with creditors harassing them day and night. Our attorneys are here to protect your legal rights by defending you from creditor harassment.
  • Foreclosures – When a homeowner falls behind on mortgage payments, the lender may attempt to repossess their home via foreclosure. If you’ve fallen behind on your mortgage payments and are facing foreclosure, our lawyers can help you file for bankruptcy, allowing you to keep your home.
  • Garnishments – When a person is in debt, a creditor may obtain court-ordered wage garnishments deducted from their paychecks. If this is happening to you, we recommend consulting with our lawyers, who may be able to help you end wage garnishments by filing for bankruptcy.
  • Repossessions – Vehicle repossessions often occur when an individual falls behind on payments to a lender. With help from our bankruptcy lawyers, you may be able to prevent repossession or be given more time to find another vehicle first.
  • Student Loan Debt – Many Minnesotans are saddled with student loans that they have difficulty paying off. Our attorneys can advise you on whether or not filing for bankruptcy may help you to pay off your student loans, removing this significant financial burden.
  • Debt Fairness Act – A Minnesota state law passed in 2024 has changed the legal routes through which medical debt can be collected and created exemptions in relation to filing for bankruptcy. Schedule a consultation with our attorneys to learn more about these laws and how they may affect your situation.

 

Cities We Service

Our bankruptcy lawyers work with clients in many cities throughout Minnesota.

Heller & Thyen offers bankruptcy services in Albany, Annandale, Baxter, Becker, Brainerd, Clearwater, Cold Spring, Detroit Lakes, Elk River, Foley, Kimball, Little Falls, Melrose, Monticello, Nisswa, Paynesville, Pillager, Pine City, Sartell, Sauk Rapids, Waite Park, Maple Grove, Milaca, Woodbury,  and other surrounding areas.

In the St. Cloud area, we operate in Albany, Clearwater, Cold Spring, Foley, Kimball, Melrose, Paynesville, Saint Cloud, Sartell, Sauk Rapids, and Waite Park.

Other cities in Minnesota that we practice in include Aitkin, Baxter, Bemidji, Benson, Brainerd, Detroit Lakes, Fergus Falls, Gaylord, Glencoe, Little Falls, Long Prairie, Moorhead, Mora, Morris, Nisswa, Pillager, Pine City, and Willmar.

Why Heller & Thyen?

  • Partners Stephen L. Heller and Robert Thyen, along with their talented team of lawyers, have been working with Minnesota clients for many years.
  • Our attorneys are committed to our clients, which is why we work around their schedules and always put in extra effort to meet their needs.
  • Our specialized lawyers are well-versed in all the complexities of bankruptcy law, positioning our legal team to assist you with any related issues.
  • We strive to create an accepting environment where clients are comfortable opening up about their financial difficulties and never feel judged by our friendly attorneys.

 

If you are behind on your mortgage payment or car loan, a Chapter 7 will not bring you current. However, there may be other options available to you., like Chapter 13.

It is also important to keep in mind that a Chapter 7 Bankruptcy may not protect all of your assets. If you own multiple homes with a lot of equity in them or other valuable assets such as boats or vehicles without loans against them, the bankruptcy trustee will either sell the item and use the proceeds to pay some of your creditors, or negotiate with you to receive the cash equivalent of the asset. We can help you negotiate with the trustee if this situation arises.

If you find yourself in this type of situation, where you have unprotected assets that you want to keep, it may be better to do some pre-bankruptcy planning or look into a Chapter 13 payment plan.

 

Dana

“Fast, efficient and friendly! Would and will recommend to everyone I know who needs an attorney. Very pleased how smooth the process was!”
★★★★★ 5/5

Brian

“Heller and Thyen were very informative in helping me decide what type of bankruptcy to file and how the process works. I will recommend them to anyone who needs financial help.”
★★★★★ 5/5

Jason

“Robb was very professional about my case and treated me like a real person who needed help. I would recommend him to anyone who needs legal help.” –
★★★★★ 5/5

Mandy

“Heller & Thyen were truly wornderful to work with! It’s so helpful to have always lawyers that truly care about the people who they are working with.”
★★★★★ 5/5