It appears that consumers in Minnesota and around the country are taking on more debt as the economy continues to grow. Total consumer debt in the United States has grown for 16 consecutive quarters and is now approaching $14 trillion according to the New York Federal Reserve's second quarter Household Debt and Credit Report. However, consumers seem to be coping with this increased debt load as default rates are essentially flat and credit card delinquencies are actually falling.
Minnesotans who are struggling under the weight of their debt may benefit by filing for personal bankruptcy protection. However, it is important for people to understand several things about personal bankruptcy before they file so that they might avoid making mistakes.
Minnesota fans of rapper Lil' Kim may have heard that she is having financial problems. Lil' Kim filed for Chapter 13 bankruptcy just days before foreclosure on her mansion in New Jersey.
Couples and individuals in Minnesota who are struggling with debt may decide to look into bankruptcy as a form of debt relief. While bankruptcy can be a good option for those who need to better manage their financial obligations, the process is not capable of eliminating every type of debt.
If a debtor in Minnesota files for Chapter 13 bankruptcy, it may allow for a cram down of a vacation or investment property. What this means is that the market value of the home becomes a secured debt. The difference between the market value and what is left on a mortgage becomes an unsecured debt. In most cases, this is not true for the first lien on a primary residence.