If you’re struggling with debt, you’re not alone. Many people you may see every day at work, on the street, or within your circle of friends may be working through financial difficulties just like you. Unfortunately, there’s so much social stigma around debt that many of us may feel shame and a need to hide our debts. While it’s true this may protect you from the judgment of others, it may also prevent you from facing your debts as a real issue. If debt is negatively affecting your life, you can benefit from taking direct action to resolve those financial problems. With the help of Behm Law Group, Ltd., you can achieve debt relief by filing for bankruptcy in Luverne, MN.
Because of the negative images the word debt brings to mind, it’s not unexpected that bankruptcy also receives its own kinds of undesirable judgment. Whatever images bankruptcy has socially, in reality it’s a highly effective way to recover from debt with what is essentially a government blessing. If you’re struggling with some of the most common debts in the U.S. (i.e. credit card debts, medical bills, mortgages, and car loans), you can benefit from filing for bankruptcy.
While bankruptcy is often a remedy for debts, it comes with its own negative effects like many other legal processes. The pros often outweigh the cons, but occasionally, bankruptcy might not be right for you. Understanding the full weight of what bankruptcy means is important for anyone who is struggling with debt.
- You receive an automatic stay that prevents your creditors from collecting debts as soon as you file for bankruptcy.
- Your unsecured debts will be discharged in full in a Chapter 7 bankruptcy, and discharged 0-100% in a Chapter 13 reorganization bankruptcy.
- Your secured debts will be discharged in a Chapter 7 bankruptcy, and sometimes you’ll be able to keep the properties serving as collateral for those debts by engaging in post-bankruptcy agreements with the creditors that have more favorable terms.
- Your secured debts will be reorganized into a Chapter 13 repayment plan that fits your budget and limits the repayment period to three to five years.
- Overall, you receive debt forgiveness and are offered a way to work through debt issues with court administered remedies.
- Your credit will drop, and a bankruptcy remains on your public record for up to five years.
- Some debts are more difficult to discharge during the bankruptcy process, including two of the most common debts in America: student loans and tax debts. These debts are not discharged after the ordinary bankruptcy process has concluded. In order to try and get such debts discharged, one must commence an adversary proceeding and sue the creditors and such proceedings can be both expensive and protracted.
- You will have to pay a bankruptcy filing fee to the bankruptcy court, and to truly file a successful case, you will have to pay attorney’s fees to a bankruptcy attorney.
Though there can be downsides to filing for bankruptcy, many who file experience positive benefits that far outweigh the negatives. If you’re considering filing for bankruptcy in Luverne, MN, contact Behm Law Group, Ltd. today for more information about how it will affect you as an individual or business.
There are many reasons to file for bankruptcy—from resolving credit card debts to reorganizing a mortgage into a repayment plan. And bankruptcy can be a highly effective way to fix financial problems that would otherwise fester and grow worse. Because every part of the bankruptcy process is handled through the U.S. Bankruptcy Court, filing for bankruptcy is a protected legal process and one of the most effective immediate and long-term solutions for financial difficulties. If you are struggling with debt in your life as an individual or a business, filing for bankruptcy can help. For those with a low income or a failing business, Behm Law Group Ltd. can work with you to build and file a successful case for Chapter 7 bankruptcy in Pipestone, MN.
Chapter 7 bankruptcy is a liquidation process for individual consumers or businesses. In exchange for debt discharge, Chapter 7 trustees can sometimes sell certain assets you own and return the value gained to your creditors. This process may seem like a drastic measure, but the court protects you from losing any properties that you need for day-to-day life (home, car, etc.) with exemption allowances. Plus, your debts connected to unsecured loans will also be discharged (credit card debt, hospital bills, etc.).
In addition to debt recovery, filing for bankruptcy provides several other financial and legal remedies. One more unusual legal issue that can be resolved through bankruptcy is any lawsuit your creditors file because of your lack of debt payments. These suits become judgement lawsuits in a bankruptcy case, and they can be treated in one of two ways.
- Your lawsuit progress is halted as soon as you file for bankruptcy and is eventually dissolved in your Chapter 7 case. This occurs if your lawsuit is connected to a low-impact debt. For example, credit card debts, car loans, medical bills (with an exception addressed later), personal loans, mortgages, and more are all low-impact debts when they are put into the light of a pending lawsuit and bankruptcy case. When you file for Chapter 7 bankruptcy, these lawsuits are halted and you will not be held responsible for any costs.
- Your lawsuit progress is halted as soon as you file for bankruptcy, but is deemed a high-impact case and is not dissolved in your Chapter 7 case. High-impact cases typically involve actions you made that directly affected another person’s health, life, or well-being. For example, common high-impact suits connected to a debt you owe include those involving your payment of alimony or child support, any fraud or criminal activity, your drunk or reckless driving that caused injury, or other causes of injury to another person (two reasons your medical bill-related debts might be non-dischargeable). These cases can also be connected to priority debts like tax debts.
If you are considering filing for Chapter 7 bankruptcy in Pipestone, MN, and have a lawsuit connected to a debt, contact Behm Law Group Ltd. at (507) 387-7200 to learn more.
March is the time when determination for New Year’s resolutions start to waver. If you’ve made your New Year’s resolution based on your budget, that wavering can significantly damage your financial well-being. Those who have filed for Chapter 13 bankruptcy in the past know they don’t have any other option than to adhere to the budget outlined in their repayment plan. If you’re struggling with your budget, filing for Chapter 13 might mean long-term debt relief and better spending practices. With the help of Behm Law Group Ltd., you can file for Chapter 13 bankruptcy in Mankato, MN, and structure a repayment plan that will set you up for success.
Chapter 13 reorganizes your debts into a three- to five-year repayment plan. This is a great option for those with a steady income who want to receive court-approved debt relief with a structured budget for the repayment plan period. With a Chapter 13 bankruptcy, filers will have to repay their priority debts, like amounts owed for taxes, criminal fines, child support and alimony, in full, but most can receive a debt reduction up to 100% on unsecured debts. Even secured debts, like vehicle loans and mortgage delinquencies, can be paid under different and more favorable terms.
After you file, you have the opportunity to restructure your debts into a plan proposal. The plan lasts three or five years depending on your income. When the court approves your plan, you will make monthly payments to a chapter 13 bankruptcy trustee.
Although the concept of a Chapter 13 repayment plan is highly attractive, some might find it difficult to adhere to that plan, especially if a wavering budget sent them into bankruptcy in the first place. Sticking to your repayment plan means you have to take some things into consideration:
- Your plan is structured around your income, so any income changes (a new job, for example) must be reported immediately to your bankruptcy trustee or your plan may be dismissed for lack of good faith.
- Because your plan is structured around your income, it also takes in the fact that you have monthly expenses for food, travel, utilities, rent, and more. The money you will have to spend to live each month is accounted for in your plan.
- While your necessary spending is taken into account in your repayment plan, your unnecessary spending is not. All of your disposable income (any money left over after reasonable and necessary monthly expenses) will have to be paid to the chapter 13 trustee for your unsecured creditors involved in your repayment plan. You and your lawyer can work with the chapter 13 trustee on your budget to determine your reasonable and necessary expenses. While the chapter 13 trustee is a fiduciary for your creditors, the trustee is not intransigent or inflexible in this process.
- Sudden income sources like tax refunds, bonuses and commissions may or may not have to be paid to the chapter 13 trustee and into your repayment plan. This is something that can be negotiated at the time it occurs.
It is completely possible to live month to month during a Chapter 13 repayment period. In fact, the entire goal of reorganization bankruptcy is to allow filers to live their lives as normally as possible while they repay debt. If you are considering filing for Chapter 13 bankruptcy in Mankato, MN, and are concerned about sticking to a tight budget, contact Behm Law Group Ltd. at (507) 387-7200 for more information today.