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Secured Debts and Secured Properties Handled with Chapter 7 Bankruptcy in Fairmont, MN

In most cases of bankruptcy, the individuals or businesses that file are struggling with multiple types of debt. These debts can involve mortgages, credit card debt, tax debts, and even personal loans. If you’re finding it impossible to meet payments on your debts, filing for bankruptcy might be right for you. Behm Law Group, Ltd. can help you decide, based on your own situation, whether you should file for Chapter 13 bankruptcy or Chapter 7 bankruptcy in Fairmont, MN.

If you’re overwhelmed by debts that can be discharged in a successful Chapter 7 case, then liquidation bankruptcy is most likely the best choice. Chapter 7 bankruptcy cases are often most effective when a large portion of your debt types are secured debts.

Secured Debts

Secured debts involve property. In short, if you’ve agreed to make payments on a property that you have rented, borrowed, or bought, you have a secured debt on that property. When secured debts are treated in a Chapter 7 case, they’re most beneficial to all parties involved. This is because the debt can be discharged, relieving you of all payment obligations to that debt, and the property asset involved in the debt can be liquidated to repay your creditor. However, even during a Chapter 7 case, there are several ways a secured debt can be handled.

Surrendering Secured Properties

If you choose to surrender your properties involved in a secured debt, you’ll simply return them to your creditor. Under the protection of Chapter 7 bankruptcy, this surrender will remove your creditor’s lien on the property and erase your liability to the loan when the debt is discharged. This is the most common action under Chapter 7 for secured debts.

Redeeming Secured Properties

If you wish to retain the property involved in a secured debt (for example, if you want to keep your car or house), you can choose to redeem it. This requires you to pay your creditor the value they would request for replacing the property without taking the interest you owe on the debt into account. If you owe a large amount more in loan interest than the property itself, this may be a beneficial choice.

Reaffirming Secured Debts

Finally, you may choose to reaffirm a secured debt after your bankruptcy case is concluded. In most cases, this will reinstate your original debt on the property and loan, but you may attempt negotiation with your creditor for a lower debt. This protects creditors from reselling your property at lower costs than you owe, and it allows you to keep your property with an opportunity to negotiate lowered debt obligations.

If you’re considering filing for bankruptcy, you have to choose which type of bankruptcy will be most beneficial given your financial situation. Contact Behm Law Group, Ltd. today for expert legal advice and assistance with Chapter 13 bankruptcy and Chapter 7 bankruptcy in Fairmont, MN.

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Debt Discharge Possibilities in Chapter 13 Bankruptcy in Redwood Falls, MN

The benefits of filing for bankruptcy vary between the different chapters. If you choose to file for Chapter 7 bankruptcy, you benefit from the fresh start it provides after your discharge order is issued by the court in about ninety to one hundred and twenty days. If you choose to file for Chapter 13 bankruptcy, you benefit from a restructuring of your debts into a manageable repayment plan and you will receive a discharge order discharging your debts after your repayment plan is concluded in three to five years. However, for individual consumers filing for either chapter, there is some overlap of the different benefits each type of bankruptcy provides. If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, Behm Law Group, Ltd. can help you find ways to gather benefits that you might get during a Chapter 7 case as well.

A Chapter 13 bankruptcy is designed to restructure your debts into a new repayment plan that will last from three to five years. A common misconception about this restructuring is that the filer will continue to repay all of one’s debts in full over the payment plan period. This is true in some cases but most debts will only be partially paid.

Debts Discharged

While all of your priority unsecured debts, such as most tax debts and child support debts, must be paid in full in a Chapter 13 case, there are some nonpriority unsecured debts that will only be partially paid and then the balance will be discharged.

  1. Personal Loans: Any personal loans from friends, family, or acquaintances are considered unsecured nonpriority debts. These “loose contract” loans will be only partially paid with Chapter 13 bankruptcy; however, if they are secured by property or other assets, the creditors may take back those assets if you do not pay the loans back.
  2. Credit Card Debt: This is the most common type of unsecured nonpriority debt that filers hold when entering bankruptcy. With Chapter 13, that credit card debt can be wiped out after being partially paid through the chapter 13 repayment plan.
  3. Some Tax Obligations: The majority of your tax debts must be repaid at a decided percentage with your Chapter 13 repayment plan. However, if you have very old tax debts, they can be considered nonpriority unsecured debts and be discharged with Chapter 13.
  4. Medical Bills: Medical bills can be crippling, but when you file for Chapter 13 bankruptcy, those debts will be discharged if they were accumulated when your insurance did not completely cover your medical care.
  5. Other: If there is a judgment against you for negligence or contract breach involving a certain nonpriority unsecured debt, it’s possible such a debt can be discharged in Chapter 13. Debts involving injury to another person caused by drunk driving will not be discharged.

If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, or if you are struggling with these kinds of debts among other financial obligations, Behm Law Group, Ltd. can help. Contact us at (507) 387-7200 today for information about how bankruptcy can work for you.

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Treatment of Tax Debts in Chapter 7 Bankruptcy in Mankato, MN

Like the vast majority of countries across the globe, the functioning of the U.S. government and the U.S. economy are largely related to the payment of taxes. While it’s important for everyone to chip into the country finances with taxes, it’s possible for debts related to taxes to be accumulated if a business or individual is struggling financially. However, if you file for bankruptcy, your tax debts may be handled differently than other types of debt involved in the process. In particular, when you file for Chapter 7 bankruptcy in Mankato, MN, the treatment of your tax debts can be complex and confusing. Behm Law Group, Ltd. offers expert legal advice and assistance concerning your tax debts and other financial circumstances in a bankruptcy case.

Chapter 7 bankruptcy allows for the discharge of several kinds of debts you owe. However, the process doesn’t discharge all types of debts, and tax debts are often considered non-dischargeable. In fact, there are conditions as to when your tax debts can be discharged, but your debts must meet all the requirements listed below.

  1. Your tax debts may be discharged in a Chapter 7 bankruptcy case if the due date for your return was three or more years before the date that your bankruptcy case was filed; this includes extensions of return due dates. The time period is measured from the date you filed for bankruptcy.
  2. If your tax debts are due on income taxes they may be eligible for discharge in Chapter 7 bankruptcy. This includes federal income taxes, state income taxes, and gross receipt taxes.
  3. The return for the tax debts you owe must also have been filed more than two years before the date that you filed for bankruptcy. This often doesn’t include returns filed with a “late” status, but in some cases the bankruptcy court will allow tax debts on a late return to be discharged if you meet all other requirements listed.
  4. Even if you have filed your return within the time period required and the return itself and the subject tax debt for that return was at least three years old, your taxes must still meet the additional requirement of the 240-day assessment. This means if your tax return/debt was assessed by the taxing authority less than 240 days before the date that you filed for bankruptcy, your tax debts will not be eligible for discharge.
  5. Additionally, if there is any fraud, evasion, or willful misconduct involved with your tax debts or tax return, those debts will not be eligible for discharge in a Chapter 7 bankruptcy case.

Although the requirements for tax debt discharge in a Chapter 7 bankruptcy case are strict, it’s not impossible for those tax debts to be eligible for discharge. The help of an experienced bankruptcy attorney is key in helping you understand and predict the way your tax debts will be treated when you file for bankruptcy.

Contact Behm Law Group, Ltd. today at (507) 387-7200 for more information about Chapter 7 bankruptcy in Mankato, MN.

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Feasibility Requirement vs. Mathematical Feasibility for Chapter 13 Bankruptcy in Redwood Falls, MN

When you file for Chapter 13 bankruptcy, you’ll be required to meet a varying roster of requirements throughout the process for your case and repayment plan to continue from stage to stage. If you met the stipulations set by the U.S. Bankruptcy Code necessary to move your petition into the next stage, you’ll begin the restructuring of your debts into a suitable repayment plan. Because building a proposal for a repayment plan that your trustee will accept is the most difficult stage of filing for Chapter 13 bankruptcy, the help of a bankruptcy attorney is critical at this point. Behm Law Group, Ltd. offers the legal advice and assistance you need for a successful petition for Chapter 13 bankruptcy in Redwood Falls, MN.

One of the many requirements that your repayment plan proposal must meet for approval is the passing of the Feasibility Requirement. Your trustee will examine your plan proposal to ensure you can meet your outlined payments month to month. While it is essentially a way of determining if your plan is viable given your current and projected future financial situation, the term “feasibility” holds two meanings in a Chapter 13 bankruptcy case.

Feasibility for You

Whether or not your plan is feasible is determined in part by your own financial situation. If you can meet payments, your plan is feasible. If your income changes and you can no longer meet payments, your plan becomes infeasible. The Feasibility Requirement may be tested against your situation several times throughout your 3-5 year repayment plan. What the filer understands as the “Feasibility Requirement” most often depends entirely on one’s financial abilities, but in some cases, it can refer to another type of feasibility.

Feasibility for Your Trustee

The Feasibility Requirement in a Chapter 13 case can also depend on Mathematical Feasibility. Mathematical Feasibility (or Disbursement Feasibility) comes into consideration after the filer passes their own requirements for the Feasibility Requirement. If you can feasibly complete your repayment plan, your trustee must also consider the disbursing of payments to creditors. Because some plans are proposed based on inaccurate information, trustees must calculate the sum transactions. The necessary output to the creditors might not always be equal to the input in the filer’s proposed plan. If this is the case there’s a mathematical infeasibility, and the plan cannot be confirmed until the inaccuracies are rectified.

The process of proposing a repayment plan when filing for Chapter 13 bankruptcy in Redwood Falls, MN, can be somewhat complicated and difficult. Don’t hesitate to contact Behm Law Group, Ltd. at (507) 387-7200 for more information about the counsel and support our experienced attorneys can provide.

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Avoiding Dismissal With Prejudice With the Help of a Bankruptcy Attorney in Fairmont, MN

In the wonderful world of the freedom of the United States of America, it’s always optional to take advantage of the help that a trained and experienced lawyer can provide. Since the Gideon v. Wainwright case in 1963, the US courts will appoint a publicly funded attorney in criminal cases to defendants who can’t afford their own. That being said, any person in any type of US legal case can also choose to represent oneself in court.

However, just because one can, doesn’t necessarily mean that one should. Criminal cases aside, there are countless opportunities for those attempting to represent themselves to make a legal a misstep. At Behm Law Group, Ltd., we emphasize the importance of taking advantage of the legal support and counsel that an experienced bankruptcy attorney in Fairmont, MN, can offer throughout your bankruptcy case.

Aside from the difficulty of managing your own bankruptcy petition while working through the day-to-day demands of your personal and financial life, the actual requirements of filing for bankruptcy from start to finish can be nuanced, exacting and rigorous. The help of a bankruptcy attorney can truly change the outcome of your case, whether you intend to liquidate in a Chapter 7 or reorganize in a Chapter 13. One of the dangers you may face if you choose to file without a bankruptcy attorney is the possibility of your case being dismissed with prejudice by the U.S. Bankruptcy Court.

There are several reasons your bankruptcy case may be dismissed with prejudice, and many of them involve fraudulent behaviors—intentional or unintentional.  “Dismissed with prejudice” means that you would be prohibited from filing for bankruptcy relief again for a certain period of time.

  1. Lying and being wrong: One of the most common reasons bankruptcy cases are dismissed with prejudice is that the court finds the filer has lied (or been inaccurate) about some information involving one’s debts or one’s overall financial situation. If you intend to file without a lawyer, you risk case dismissal with prejudice from certain inaccuracies on your bankruptcy forms and schedules, but this is easily avoided with the help of a bankruptcy attorney.
  2. Disobedience: In circumstances where a filer has appeared to willfully disobey a court order, one’s bankruptcy case can be dismissed with prejudice. This can include obstruction or hindrance of your creditors’ rights, which is a situation you may accidentally create.

A bankruptcy case is never black and white. The gray area involved in a case is best navigated with the help of a bankruptcy attorney. The implications of a dismissal with prejudice can affect your legal and personal life in extremely negative ways.

Taking advantage of the professional counsel and legal advice a lawyer can provide is critical if you’re considering filing for bankruptcy. For more information about our expert bankruptcy attorneys in Fairmont, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.