By: Wesley W. Scott

Chapter 7 Bankruptcy is typically referred to as a “fresh start” bankruptcy. It’s referred to as a “fresh start” bankruptcy because it’s like pushing a reset button on your life. In a Chapter 7 Bankruptcy, you don’t make any payments back to your creditors. The credit card debt, medical bills, unsecured loans, past utility bills, back rent, deficiencies on repossessions etc just get wiped out, tax free, forever!

The focus in a Chapter 7 is on your assets. Most people in a Chapter 7 Bankruptcy lose no assets when they file bankruptcy. There are state and federal laws that “exempt” assets from being taken by creditors or chapter 7 trustees.

The vast majority of Chapter 7 debtors lose no assets at all. Most keep their homes, furnishings, vehicles, pensions, clothing, and everything else they own. There are occasions where a debtor may own an asset we cannot protect. There are no surprises when it comes to this — at least there should not be. If you have a non-exempt asset, your lawyer will tell you this up front and discuss options to maximize the protection of your assets.

If you have 100k in credit card debt and you have a non-exempt asset worth 3k, giving up an asset worth 3k to get rid of 97k in debt is a good trade off right? I often tell my clients that do have non exempt assets, we do have to keep a sense of perspective when dealing with non exempt assets too.

The Chapter 7 Myth

The myth is a Chapter 7 is the easy way out right? The myth is you were living the good life and now you want to take the easy way out. Trust me when I tell you, not a single one of my clients has ever felt like this was fun or the “good life”. No, they have been living a nightmare.

To me, the myth is perpetuated by people who are either ignorant, naive, or just enjoy being a bully. If you think bullying ends when you leave school, think again. For some people, they are so insecure that it makes them feel good to say, “well I would never do that” or “I don’t believe in that” or whatever.

Not only would they do it, they do it almost everyday. Listen, life is humbling right? We also say stupid things sometimes. But the bankruptcy myth is a big lie. I have never once met with anyone who enjoyed being here or enjoyed using credit knowing they were going to file a bankruptcy.

In fact, the reality is just the opposite. Minnesotans file Chapter 7 Bankruptcy for one of 5 basic reasons:

1) business failure;
2) income drop;
3) divorce relationship breakup;
4) medical problems;
5) bad financial decisions- we have all made them.

None of these are very interesting- however, they are facts of life and human. Oh, the humility of being alive!

The Chapter 7 Process

STEP 1: Free Consultation

Most Minnesota Bankruptcy Lawyers offer a free consultation. At LifeBack Law Firm we offer a free, no obligation consultation. We offer a variety of ways to meet with us: skype, face time (I-phone), phone, and in person. We have never had a person leave yet who didn’t feel a lot better about the road going forward.

STEP 2: Review And Sign Appointment

The review and sign appointment is designed where we meet with you to make sure the information on the schedules is true and correct. You meet with our team first and then your lawyer to make sure the information is true and correct.

We never give anyone a pile of worksheets to fill out. We HELP you get your life back by doing most of the work for you.

STEP 3: 341 Meeting

The 341 meeting is designed to confirm that the information on the petition and schedules is true and correct. It is very unusual for anyone else to appear at this meeting besides the debtor, trustee, and debtor’s lawyer. A typical meeting lasts 7-10 minutes.


About 60 days after your meeting of creditors, you receive your discharge. When you receive your discharge, you are no longer personally liable for these debts- tax free!


Once you get on the other side of this, it is absolutely a beautiful thing. The biggest step is always the first step. If you have any more questions about Filing Chapter 7 Bankruptcy please contact one of our numerous Minnesota locations near you today, we’d be happy to help.

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