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Filing your Minnesota Chapter 7 Bankruptcy

Kelly Law Office accross from RidgedaleKelly Law Office
11900 Wayzata Blvd. #116E
Minneapolis, Minnesota 55305
Phone: (952) 544-6356
Fax: (952) 525-7924
Mobile: (612) 735-3797

Across I-394 from Ridgedale. Serving the Minneapolis and St. Paul area, especially the western suburbs including Minnetonka, St. Louis Park, Golden Valley, Crystal, New Hope, Hopkins, Eden Prairie, Maple Grove and Plymouth. Also available by appointment only at 8421 Wayzata Blvd., second floor, Golden Valley, MN 55426.


Chapter 7 Bankruptcy is the kind of bankruptcy which would usually be the best choice for individuals who are in serious financial trouble. It is very good for consumer debts, but often works well for self-employed individuals and small businesses too. It is sometimes called a "straight" bankruptcy, and is also referred to as a "liquidation bankruptcy."

In a Minnesota Chapter 7 Bankruptcy, the Minnesota bankruptcy court appoints a trustee who reviews what assets the debtor has for distribution to creditors. The trustee will try to  take whatever available assets he or she can away from the Debtor.  If some assets are available, the trustee notifies the creditors. Those creditors who submit claim forms will be given their proportionate share of the available assets, but that is all they are ever going to get.

My job as your lawyer it to try to make sure that the trustee can't take anything away from you.  This is done by claiming your assets as exempt.  Most assets which are basic necessities of life are exempt from seizure by the trustee either under federal or state statutes, and usually I can can help you claim almost everything you own as exempt. As your bankruptcy lawyer in a Chapter 7, I try to make sure that your assets are protected under the exemptions to the greatest extent possible. If there are assets I can't protect, we'll have to talk that over.  Often a small loss can be worth it to make your debts go away.  If the loss is going to be substantial, a Chapter 13 might be a better choice.

Typically you qualify for a Chapter 7 Bankruptcy by showing that you have none of the following:

Assets from which you are able to pay all or a substantial part of your debts.


Income in excess of your legitimate living expenses from which you are able to pay all or a significant portion of your debts.


Gross annual income in excess of the median for households of your size in Minnesota.


If your income exceeds the median, you might still qualify if you can pass what they call the means test.  I strongly suggest that you not try to figure this test out yourself. Come in for a consultation and we'll run the numbers together. Another way to qualify for Chapter 7 Bankruptcy with above median income is to have primarily business debts - a very hard thing to show because your home mortgage is not a business debt.