Ed Shaw Law - Brainerd Attorney
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Coronavirus Impact and Assurance: Yes! We are still open for business!

As you are all aware, we are currently facing unique challenges due to the Coronavirus. While this is a serious crisis, it is important to keep it in perspective, and not allow it to prevent us from going about our business. We want to assure all of our clients that this office is prepared to serve your needs, regardless of what happens and how the virus affects Minnesota. In an effort to keep the office safe, we have stepped up prevention and sanitation measures in hopes to prevent disease transmission.

Because we are a paperless office, our entire staff is prepared to work from home if necessary. No matter what happens, we will continue to provide our clients with the highest quality legal services. For any clients who are not comfortable leaving their homes, we can handle any appointments remotely via phone, FaceTime, Skype, Zoom , and can transfer any documents to you electronically or by mail, if that is your preference.

Please rest assured, we will continue to take care of your legal needs in this challenging time, and your safety is our highest priority.

Please see our blog for more info on pandemic response.

The difference between Chapter 7 and Chapter 13 bankruptcy plans

| Aug 11, 2020 | Bankruptcy

Consumers seeking help to manage their debt may at some point come to consider filing for bankruptcy. However, before making the decision to apply for help under a bankruptcy plan, people should educate themselves about the different types of plans available.

The most common form of consumer bankruptcy is the Chapter 7 plan and the next most common form of consumer bankruptcy is the Chapter 13 plan. Both provide debt relief but in very different ways.

Chapter 7 bankruptcy plans

As explained by Credit Karma, a Chapter 7 bankruptcy plan discharges a consumer’s debt often in as little as a few months after the initial filing. No debt repayment occurs in this plan. However, a person’s assets may be repossessed should their value exceed the stated exemption level for the bankruptcy. For this reason, a Chapter 7 bankruptcy may be called a liquidation plan.

A consumer seeking debt relief via a Chapter 7 bankruptcy must meet qualification criteria via the means test. This test evaluates the person’s income and expenses to determine bankruptcy eligibility.

Chapter 13 bankruptcy plans

In contrast to the Chapter 7 plan, a Chapter 13 bankruptcy does not involve the loss of any assets. According to the U.S. Courts, a Chapter 13 plan consolidates a person’s debts into a form of structured repayment.

The consumer makes monthly payments to a trustee who, in turn, pays creditors per the plan. This continues for three to five years. Due to the need to make these payments, a Chapter 13 bankruptcy may be referred to as a wage earner’s plan. At the end of the term, any remaining debt is discharged.