Legal Question in Bankruptcy in Minnesota
My husband and I are contemplating filing chapter 7 or 11 bankruptcy. I was told if we file chapter 7 we will still have to pay the debt (credit cards) back. If this option is chosen will the interest rate and payment amount per month be lowered??? Also, do we have to put our vehicles up for collateral to do this???
2 Answers from Attorneys
You would not have to pay your credit cards back in a Chapter 7.
Call for a free consultation.
Nathan Hansen
651-704-9600
Individuals hardly ever would do a Chapter 11. That's usually for large business - like Northwest Airlines.
Chapter 13 would involve a payment plan - but it's based on how much you can afford to pay, not how much you owe. At the end of the plan the unsecured debts are discharged, and the balances and interest rates don't make any difference.
Chapter 7 just wipes out your debts - most of them anyway. There are exceptions. But as Mr. Hansen said, there's no payment plan involved.
This is for general information purposes only, is not legal advice, and does not create an attorney-client relationship. My office is a debt relief agency, helping people file for relief under the federal bankruptcy code.
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