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What Happens to Your Business When Filing Bankruptcy in Windom, MN?

Running a small business is one of the most difficult ways to make a living, no matter where you’re located. Startups close down even before they gain momentum, family-owned businesses go under, partnerships collapse, and countless businesses of all kinds file for bankruptcy as a result of a wide range of factors.

Anyone who owns a business knows these difficulties for themselves, and many business owners view the last gasp of failure as a bankruptcy filing. The fact is, however, that bankruptcy may be a viable solution to keeping your business running successfully in the long-term. Behm Law Group, Ltd. offers legal counsel and protection for businesses filing bankruptcy in Windom, MN, and we can guide you through the process of saving your business for the long run.

The type of bankruptcy that most business owners think of when they view it as a “failure” resulting in closing up shop is Chapter 7 liquidation bankruptcy. While it’s true that the majority of Chapter 7 business bankruptcies will end with a closed down business, there are exceptions and other types of bankruptcy that can support debt relief without forcing a shutdown.

 

Chapter 13 vs. Chapter 7

If you want to keep your business in operation with a goal of long-term debt relief, then filing for Chapter 13 or Chapter 11 bankruptcy is most likely the best option. Both of these types of bankruptcy work to reorganize your debts into a repayment plan that fits your business budget. Businesses that are not sole proprietorships (LLCs, partnerships, or corporations) are generally not appropriately addressed in Chapter 13 but for those businesses Chapter 11 has its own advantages. For sole proprietorships, Chapter 13 bankruptcy is a better option than Chapter 11 because you can include both your business debts and personal debts in the repayment plan. Additionally, in a Chapter 13 repayment plan you have the option to protect your business property with exemptions, reduce overall debt amounts for unsecured nonpriority debts, and structure your debts overall into a court-approved repayment plan.

Even though most Chapter 7 business bankruptcies result in a closing of that operation, there are times when that shutdown doesn’t occur in a liquidation bankruptcy. Specifically, sole proprietorship businesses can continue to operate their business after a Chapter 7 filing, and like with a Chapter 13 plan, filers can include their personal and business debts in the liquidation process. The types of businesses that continue to operate most successfully after a Chapter 7 liquidation are those with few assets. For example, personal trainers, therapists, consultants, freelancers, and other similar service providers can continue to operate successfully in the face of asset liquidation.

If you’re a business owner struggling to repay debts, filing for bankruptcy can help you continue to operate your business and gain long-term debt relief. To learn more about filing bankruptcy in Windom, MN as a business owner or individual, contact Behm Law Group, Ltd. at (507) 387-7200 today.

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Benefits of Choosing Bankruptcy over Debt Adjustment in Waseca, MN

There are many ways to incur debt, from credit cards to car loans. If you are struggling to make ends meet each month because of your debts, don’t despair. There are several ways you can get debt relief, whether that means you work out an agreement with your creditors, or take legal action and file for bankruptcy. Despite the negative image bankruptcy tends to receive, the process is one of the most effective ways to get debt relief in the long term. In fact, bankruptcy can resolve your debts without the “band-aid effect” other kinds of debt relief result in. With the help of Behm Law Group Ltd., you can rid yourself of unmanageable debts by filing for bankruptcy and steering clear of the negative impacts of debt consolidation, debt settlement, and debt adjustment in Waseca, MN.

 

Almost all non-bankruptcy forms of debt relief (with the exception of debt forgiveness) create similar situations for the debtor and treat debt in similar ways. Debt adjustment, settlement, and consolidation are three common methods of debt relief outside of bankruptcy. However, they may only give you temporary relief with the added damage of more debt in the long run.

 

 

How Common Debt Relief Methods Work

 

  • Debt adjustment is an agreement you can work out with your creditor to lower your monthly payment amount, allowing you to pay that debt off over a longer time period. While this means you’ll have to pay less each month, it also means you’ll end up paying more to your creditor overall because of the added interest.
  • Debt settlement is another agreement you can make with your creditor and a debt settlement company. In this case, you and your creditor agree on a reduced debt amount and you begin making payments to the settlement company. However, the company can withhold your payments from your creditor, making your credit decrease significantly when your financial records show that you’ve defaulted or made late payments on your debt. In addition, you typically will get taxed on any debt that may be forgiven or written off.
  • Debt consolidation agreements between you and a third party creditor work to take out a loan from that creditor to repay all your other debts, effectively consolidating all your debts into one. These debts often have interest rates that increase over time and force you to be in debt longer.

 

 

Why Bankruptcy Is Better

Debt relief options like debt adjustment, settlement, and consolidation provide quick fixes without addressing long-term solutions. They will most likely put you into a situation where you pay more in interest for a much longer period of time. Choosing bankruptcy instead gives you a chance to resolve your debts under the administration of a court-protected process as well as the added protection of a bankruptcy attorney. While it will cause your credit to drop (just like most other debt relief processes), bankruptcy will effectively discharge or restructure your debts into a reduced plan spanning over a predetermined payment period.

 

 

To learn more about filing for bankruptcy over debt adjustment in Waseca, MN, or other forms of debt relief, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

 

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Understanding More about Debt Cramdown with Chapter 13 Bankruptcy in Fairmont, MN

A common misconception about bankruptcy is that filers will lose all their property in the process. This could not be further from the truth. While there are some  Chapter 7 bankruptcy cases in which assets are liquidated, there are many more occasions when filers can claim exemptions to protect their property from liquidation. Additionally, the process of Chapter 13 bankruptcy works to restructure filers’ debts into a repayment plan suited to their income without bringing liquidation into question. If you are considering filing for Chapter 13 bankruptcy in Fairmont, MN, Behm Law Group, Ltd. offers counsel and protection from start to finish to help you get the most out of your case.

 

One aspect our bankruptcy attorneys work to promote in certain cases is helping filers successfully petition for debt cramdown. When you owe more debt on a property than the value of that property, you are considered to be “upside down” on that debt. If this is the case, you are eligible for debt cramdown in certain circumstances.

 

How It Works

 

Cramdown is a process available for several types of secured debts, but because of the fast depreciation of vehicles, cramdowns are applied mostly to auto loans. If your debt is upside down, you can use a cramdown to reduce the debt amount. For example: You took out an auto loan of $15,000 to finance a car of the same value, and you repaid $3,000 of that loan over the course of three years. After those three years passed, your car’s value decreased to $10,000. However, you still owe $12,000 on your auto loan.

 

When you file for Chapter 13 bankruptcy and request a cramdown, the repayment plan will include only the current value of your car as secured debt. In this example, you would have the $10,000 value of your car loan rolled into your plan as secured debt, while the remaining $2,000 you would pay outside of bankruptcy is rolled into your plan as unsecured debt. This cramdown process may not eliminate all of your debt, but because Chapter 13 plans don’t often require you to repay unsecured debt in full, you can significantly decrease the debt you pay in the end.

 

Additionally, most cramdowns allow you to reduce your interest rates on the remainder of the secured debt included in your plan. Auto loans that qualify for cramdown must also have been taken out more than 910 days before you file for bankruptcy.

 Find Professional Help when Filing for Chapter 13 Bankruptcy

If you’re considering filing for Chapter 13 bankruptcy in Fairmont, MN, and think you may be eligible for a cramdown, Behm Law Group Ltd. can offer you advice and assistance in the process. Contact us at (507) 387-7200 to learn more or to get started on your petition today.

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How to Use Your Tax Refund While Filing for Bankruptcy in Redwood Falls, MN

As tax season approaches, everyone filing has to take time to look at their finances in more detail than usual. For many individuals and businesses, a financial overview may show just how much they are struggling with the weight of debt. For those with too much debt than they know what to do with, tax season may be the perfect time to consider a long-term solution. At Behm Law Group, Ltd., we’ve found that there are many cases where tax season was the most effective time for those considering filing for bankruptcy in Redwood Falls, MN to take the next step forward.

 

Whether you have credit card debt, mortgages, or most other forms of debt, filing for bankruptcy can act as a recovery system that helps you resolve those debts under government protection. For most with a steady income that overbalances their debt-to-income ratio, the process of Chapter 13 bankruptcy is the most effective as it restructures your debts into a three- to five-year repayment plan suited to your own financial situation.

 

Because of the demand that a Chapter 13 plan puts on all your disposable income, you will most likely have to forfeit some of your yearly tax refunds you receive to your trustee for the repayment of your unsecured debts. While your trustee may allot some of that refund for you to spend or save, you will not be able to retain all of it.  To get the most use out of your tax refund if you plan to file for bankruptcy, you should plan to use it before you file your petition.

 

If you use your tax refund prior to filing for bankruptcy, you will have to spend it all or you may have to surrender some of your tax refund to the trustee. To get full use of your refund without being at fault when the time comes to file, you should expect to only use the refund for:

 

  • food and prescription medicine
  • mortgage or rent
  • home maintenance and repairs
  • utilities
  • education costs
  • clothing
  • insurance
  • medical or dental costs
  • car payments, repairs, and maintenance
  • homeowners association fees

 

The best use of your tax refund if you plan on filing for bankruptcy is for it to go to these expenses. When you use your refund for these purposes, it’s also critical to keep accurate and legitimate records of all your spending. With the help of a Behm attorney, you can record and collect necessary information and documents that will fully demonstrate your use of your tax refund for these expenses rather than other debt payments. Your trustee will most likely require a tax return for the year prior to and the year you file for bankruptcy on top of the additional bankruptcy petition documents.

 Find Professional Help When Filing for Bankruptcy

To learn more about how to use your tax refund before filing for bankruptcy in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

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Handling Consumer Debts Gained after You File Your Petition for Chapter 13 Bankruptcy in St. Peter, MN

With the decline that our economy has seen over the past six months, it’s not surprising that many individuals and businesses have had to take on more debt or have had difficulties meeting their debt payments. If you have been struggling to make monthly ends meet, and have been for some time, it may be beneficial for you to consider the debt relief filing for bankruptcy can provide. For those with stable incomes who want to retain their properties, Chapter 13 bankruptcy is a valuable option. Behm Law Group, Ltd., provides legal advice and assistance for individual consumers and business owners who want to take full advantage of filing for Chapter 13 bankruptcy in St. Peter, MN.

Because Chapter 13 bankruptcy works as a reorganization process, it restructures your debts into a repayment plan with scheduled monthly payments lasting three to five years. This repayment plan is designed to fit your budget and can effectively resolve the majority of your debts without you having to lose any of your property.

Although Chapter 13 bankruptcy is supposed to fit your financial circumstances while allowing you to operate on a daily basis, it can make your spending limitations extremely tight. Sometimes it may be necessary to incur even more debt during the three to five years you spend within a Chapter 13 plan. Fortunately, it’s possible you can roll these new debts into your current repayment plan, allowing for a more manageable structure in the payment of all your debts together.

 

Post-Petition Debt Types

The debts you are allowed to incur while in a Chapter 13 plan that won’t force your case to be dismissed are tax debts and consumer debts.

  • Tax debts may be treated as priority debts (and must be repaid in full) if your creditors petition for priority claim status.
  • Consumer debts are only allowed as post-petition spending if you receive court approval. The court often approves post-petition debts if they are incurred on behalf of your household well-being (not for your business).

If you fail to get court approval to incur a post-petition debt, you will be required to pay it outside of your Chapter 13 repayment plan. If you do get court approval, however, you can later request to have the debt rolled into your repayment plan as a priority, secured, or unsecured debt depending on the type of agreement between you and the creditor. To have the debt included in your plan, your creditor and trustee must each accept your request, and your creditor must submit a proof of claim and a statement of agreement.

 

If you are considering filing for Chapter 13 bankruptcy in St. Peter, MN, and want to learn more about post-petition debts or how a repayment plan is structured, contact Behm Law Group, Ltd., at (507) 387-7200 today.

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Farms and Other Local Midwest Food Suppliers File for Chapter 12 Bankruptcy in Mankato, MN

Farming is a notoriously difficult profession even with the knowledge, tools, and power agriculturalists have access to today. Throughout the ages, farmers have faced challenges with the weather, soil conditions, seed fertility, plant diseases, pests, economy crashes, and many other variables. With all the hardships farmers face, it’s incredible there are so many strong people who still choose this vocation, and we have those hard workers to thank for the abundance of food in supermarkets and grocery stores across the country.

 

However, many farmers still face extreme financial hardship, and it’s no surprise that many find themselves deep in significant debt connected to their crop, livestock, or fishing operations. If you’re having difficulties as a family farmer or fisher, Behm Law Group, Ltd. can help you find your way out of severe debt by filing for Chapter 12 bankruptcy in Mankato, MN.

 

With the large spread of farmland dotting the countryside between Mankato and other cities in southern Minnesota, there are many local people living in our communities that took on farming as a profession. Unfortunately, this year has marked a rise of farm debts, not just in Minnesota, but across the Midwest as a whole.

 

Why Farm Debts Are on the Rise

 

Sometimes described as a “slow bleed” of independent farms in the face of low dairy, crop, fish, and meat prices, the debts of family farmers and fishers are not matched by the income they receive from product sales. When independent farms are higher in geographic concentration, as they often are, the trickle of each small farmer’s debts turns into a river of severe financial crisis. If this happens to a community, no matter how widespread, bankruptcy is a highly valuable solution. When farmers and fishers take advantage of the assistance filing for Chapter 12 bankruptcy provides, it serves as a true system of recovery and healing for agricultural communities.

 

Chapter 12 Bankruptcy

 

Chapter 12 bankruptcy is a debt relief option offered to family farmers and fishers who earn over 50% of their income from agricultural or fishing operations. If you file for Chapter 12, you are provided with a system of bankruptcy that reorganizes and restructures your debts in a manageable repayment plan suited to your income. This bankruptcy repayment plan is spread over a period of three to five years and allows for fluctuations in your income with the growing and harvest seasons. Not only does Chapter 12 give farmers and fishers a way to repay their debts without losing their land, home, agricultural equipment, and overall livelihood, it also provides protection against creditor harassment.

 

Farm debt may be on the rise due to several conditions in the food industry today, but there are solutions. Chapter 12 bankruptcy in Mankato, MN is one option that many can use to recover in the long-term from agricultural debt. To learn more about bankruptcy and debt relief, contact Behm Law Group, Ltd. at (507) 387-7200 today.