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Handling Payday Loans in Bankruptcy

If you are considering filing for bankruptcy, it’s generally accepted that you should not be spending more on credit than is absolutely necessary. This includes purchasing anything from luxury items to car repairs that aren’t needed. Loans like payday loans from lending companies, paycheck advances, or other similar debts are handled in various ways in a bankruptcy case. The way they are treated depends entirely on the circumstances of the loan and your intentions. If you do file for bankruptcy in Marshall, MN and have payday loans, Behm Law Group, Ltd. can help you determine how they might affect your case, and our attorneys can guide you through a case to receive long-term debt relief.

 

If you have taken out a payday loan or received a paycheck advance, you will most likely receive a discharge of the debt if you file for Chapter 7. This discharge is ensured if you took out the loan for a necessity and you intended to repay it when the time came. Because it is an unsecured debt, it will be discharged in full in addition to other unsecured debts like credit card and medical bills. If you file for Chapter 13, your payday loan will be included in your repayment plan along with other unsecured debts.

 

If you did take out a payday loan and there are facts indicating that you did not plan to repay the debt, you may face some issues in your bankruptcy case. There are ways a creditor can prove that you fraudulently took out a payday loan or that you misrepresented your financial information when you requested an advance on your paycheck. To start proving you took out a loan without planning to repay it, a creditor can file an adversary proceeding. Presumption of fraud is particularly likely if you’ve taken a loan out 70 to 90 days prior to filing to bankruptcy. You may be asked to demonstrate that your actions were warranted and not fraudulent if you did take out a loan within that time.

 

In most cases, however, the court understands the conditions filers are in when they take out payday loans. Borrowers need money in advance to cover necessary expenses; indeed, this is something that is quite common. Because of this, most payday loans are taken out with good intentions to repay them in time. If you are worried that your payday loan might be considered fraudulent, filing for Chapter 13 bankruptcy and including it in your repayment plan might be a better option.

 

Overall, payday loans will be discharged or included in your repayment plan unless a creditor has grounds to file an adversary proceeding. To learn more about payday loans and filing for bankruptcy in Marshall, MN, please contact Behm Law Group, Ltd. today at (507) 387-7200 or via email at stephen@mankatobankruptcy.com.

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Handling Bankruptcy Audits with the Help of a Bankruptcy Attorney

Filing for bankruptcy is a nuanced process that can be difficult without the assistance of an experienced bankruptcy attorney. No matter what type of bankruptcy you file for, the process can be greatly improved and filed without mistakes when you take advantage of the protection and guidance of a professional. Bankruptcy cases for individual consumers are typically formatted into Chapter 7 (non-exempt asset liquidation in exchange for debt discharge) or Chapter 13 (debt reorganization into a three- to five-year repayment plan). Both of these Chapters can be further complicated with the introduction of a bankruptcy audit. If you choose to file for bankruptcy, the help of a Behm Law Group Ltd. bankruptcy attorney in Owatonna, MN, can counsel and protect you in the face of an audit or any other legal hurdles you may face.

 

Bankruptcy audits are rare, but they are done routinely each year by the U.S. Trustee’s office, which can audit up to 1 in every 1,000 Chapter 7 and Chapter 13 cases and is required to audit a minimum of 1 in every 250 cases per district. The audits are randomly selected, but the office can also audit unusual cases based on an income or debt alert system.

 

In a bankruptcy audit, the Trustee’s office delegates an external auditing company to verify aspects of the case, including income, expenses, debts, and assets. You, as the filer, do not have to pay any fees in the audit, but you are required to provide copies of any requested financial documents.

 

The audit firm has 21 days to submit the audit report to the court, and the court uses that data to determine how the audit affects your case.

 

If your case is audited by random selection or based on the office’s alert system, a few outcomes can happen. If the court finds any issues in the audit with your case, you may have your case dismissed, your right to a discharge may be denied, or your case may be marked as fraudulent and criminal proceedings could be commenced if you have tried to use the process to hide assets. In most cases, if a bankruptcy filing is audited randomly, there are no issues and your petition continues through the court process normally and you get a discharge of your debts.

 

In some circumstances, filers may have made mistakes in their paperwork that appear fraudulent or must be remedied by reopening the case. With the support of a bankruptcy attorney, however, corrections can be made in the course of an audit and your case will not be dismissed and you will get a discharge of your debts. To file a case with integrity and receive long-term debt relief, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com to get started with a bankruptcy attorney in Owatonna, MN, today.

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Reopening Your Case with the Help of a Bankruptcy Attorney in Mankato, MN

If you recently filed a bankruptcy case and before you could receive a discharge or reorganization of your debts, your case was dismissed, don’t give up yet. There may be a chance you can reopen your case and successfully file for bankruptcy. Because there are many reasons why your bankruptcy case might be closed before it affects any of your debts, it’s highly advantageous to have the help and protection of a certified legal professional from the start. Whether you’ve filed and had your case closed or you are just considering bankruptcy as an option, Behm Law Group Ltd. can provide the guidance and advice you need from an expert bankruptcy attorney in Mankato, MN.

 

Cases are often closed due to an issue in the pre-bankruptcy requirements or in the paperwork you completed. Bankruptcy paperwork can be complex, and the pre-bankruptcy requirements are mandatory and can be rigorous. That’s why a case closure is frequently due to a failure to satisfy a court requirement.

 

Failure to:

  1. List an asset: If you neglected (accidentally or otherwise) to list an asset/property on the initial documents you are required to complete in your bankruptcy case, your case can be dismissed. However, if your case is originally dismissed due to your lack of accurate asset listing, you can reopen your case with the corrected paperwork. The guidance of a bankruptcy attorney is often key in filling out bankruptcy documents regarding assets.
  2. List a creditor: Even if a creditor will not be involved in the bankruptcy process in any way, you are required to list all the parties to whom you owe money. This includes lending companies, landlords, the court system, the government, and even friends and family. If you fail to list a creditor, chances are you can reopen your case with adjusted documents and direction from a bankruptcy attorney about the details of your creditors.
  3. Complete credit counseling: Every filer has to attend court-approved credit counseling sessions within 180 days before submitting a bankruptcy petition. Without the advice of a bankruptcy attorney, it can be difficult to find an approved counseling provider or to understand when a provider might take advantage of your situation. If your case was dismissed because you failed to complete credit counseling, you can reopen your case if you prove you’ve satisfied that pre-bankruptcy requirement.

 

To reopen you case, you simply have to correct anything you failed to do and submit an application that explains why you want to reopen your case. With that application, you also need to submit documentation that proves you have remedied any failures in the original submission. To learn more about reopening a case and why the help of a bankruptcy attorney in Mankato, MN, is important, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com today.

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Frequently Asked Questions about Chapter 13 Bankruptcy

If you are finding your quality of life compromised due to the difficulty you have meeting monthly debt payments, it may be time for you to consider seeking debt relief. While there are many forms of debt relief available to individuals, the most effective option for long-term, permanent debt relief is bankruptcy. Bankruptcy is a system that has long been put into place by the government to protect debtors from destitution, provide fair treatment to creditors, and promote a healthy economy overall. If you are considering bankruptcy, Behm Law Group Ltd. attorneys can help you file a strong case for Chapter 7 or Chapter 13 bankruptcy in Pipestone, MN.

 

Both Chapter 7 and Chapter 13 are the most frequently filed types individual consumers. While Chapter 7 provides liquidation of non-exempt assets in exchange for debt discharge, it’s not a chapter that most wage-earning debtors can qualify for because their incomes are often too high.

 

Chapter 13 bankruptcy, on the other hand, offers a way to restructure your debts into a manageable repayment plan lasting three to five years. Although Chapter 13 is a common bankruptcy format, there are still many frequently asked questions we receive including:

 

  1. How much of my debt will I have to repay?
    1. You will have to pay all of your secured debts (i.e., mortgages and auto loans) that you want to retain in full, but the payment arrangements may be under different and under more friendly terms.
    2. You will have to pay priority debt (i.e., child support and tax debt) in full.
    3. You will most likely have all or much of your unsecured debt (i.e., credit card debt and medical bills) discharged after your chapter 13 plan is concluded. The amount you will pay depends on how much your monthly income exceeds your monthly reasonable and necessary living expenses and how much you would be able to repay creditors with the value of your non-exempt, liquidated assets in hypothetical Chapter 7 bankruptcy case.
  2. How long will my plan last?
    1. Your plan will last three years if your income is below the state median income of a similar household size.
    2. Your plan will last five years if your income is above the state median income of a similar household size.
  3. Will I have any income for personal use?
    1. The remainder of your income after you meet payment requirements for your secured and priority debts will be split into two types, disposable and discretionary.
    2. Your disposable income will go to your household needs, including income tax, utilities, food, and gas.
    3. Your discretionary income is yours to spend as you see fit.
  4. What happens if my income changes?
    1. Fluctuations in income and expense obligations are taken into account throughout the duration of your repayment plan. Three to five years is a long time, and your trustee will understand if changes occur.
    2. If you do have a job change or other significant life event that might affect your plan, notify your attorney and the trustee right away so your monthly plan payment can be altered accordingly.

 

Filing for bankruptcy is a complex process without the assistance of a trained professional no matter what chapter you file. Contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com for help getting started with Chapter 13 bankruptcy in Pipestone, MN, today.

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Frequently Asked Questions about Chapter 7 Bankruptcy

If your low income is preventing you from meeting financial obligations like debts and bills, you might benefit from looking into the process of bankruptcy. Bankruptcy is available to individuals who have come into difficult times, whether that means unemployment, sudden medical costs, long-term accumulation of debt, or any combination of circumstances. Unlike other types of debt relief, bankruptcy is a formal legal process with permanent results. This means you will be protected by things like the automatic stay, a trustee, and other provisions of the bankruptcy code. With the additional guidance of a Behm Law Group Ltd. attorney, you can file a strong case for Chapter 7 bankruptcy in Luverne, MN.

 

Chapter 7 bankruptcy is a liquidation type of bankruptcy. It’s the most commonly filed U.S. chapter for individuals and corporations alike. For those who haven’t filed before, there are often many frequently asked questions (FAQs), including:

 

  1. How does it work?
    1. Chapter 7 bankruptcy works to liquidate your non-exempt property and repay creditors with the value gained from the sale of non-exempt property.  Most cases, however, are “no asset” cases where no assets are liquidated by the chapter 7 trustee and all of one’s assets are protected by one’s available bankruptcy exemptions.
    2. In exchange for this liquidation of non-exempt assets, your debts are discharged and you are permanently released from having to repay them.
  2. Will I get to keep my house?
    1. While Chapter 7 bankruptcy liquidates non-exempt properties, the bankruptcy code and Minnesota state law provide an allotment of exemptions you can claim to protect assets from sale.
    2. This includes the homestead exemption that protects the equity or value you have in your home and other exemptions that can be used to protect the equity or value you have in your car, additional real estate, personal items, or other properties.
  3. How will it affect my credit?
    1. While bankruptcy can be extremely beneficial for permanent, long-term debt relief, it will have a negative effect on your credit score.
    2. Your credit score will improve over time – indeed, it starts to improve the day after you file for bankruptcy relief – and a bankruptcy notation will generally be removed from your credit profile seven to ten years post-filing, although it is sometimes removed much earlier.
  4. How long does it take?
    1. Chapter 7 bankruptcy cases are generally closed in about three to six months depending on the case circumstances.
  5. How do I qualify?
    1. Individuals who pass the Means Test are eligible for Chapter 7 bankruptcy.
    2. The Means Test measures income-to-debt ratios against the state median income. If your income is lower than the Minnesota median income of a similar filer with a similar household size, you can qualify for Chapter 7.
  6. Which debts will be discharged?
    1. Your unsecured debts, including credit card debt and medical bills, will be discharged.
    2. Your secured debts that are tied to properties that are liquidated or surrendered will be discharged.
    3. Your secured debts related to property that you cannot exempt because there is no equity or value, since the amount of debt you may owe exceeds or is equal to the value of the property, will not be discharged if you choose to voluntarily reaffirm (reassume personal liability)  the related debts.
    4. Your priority debts, including most tax debts, child support, and criminal fines, will not be discharged.
    5. Student loans can be discharged but the process can be very expensive and protracted.  A person must actually sue the student loan lender in bankruptcy court, prove undue hardship , as that term is defined and interpreted under 11 U.S.C. §523(a)(8), and ask the bankruptcy court to discharge the student loan debt.

 

If you want to learn more about how the bankruptcy process will work and how it will affect your life, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com for information about Chapter 13 or Chapter 7 bankruptcy in Luverne, MN.

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What Happens to Timeshares When One Owner Files for Bankruptcy

No matter what type of bankruptcy chapter you file for, all your properties will be examined in addition to your debts and income sources. This includes any real estate you own, such as your regular homestead, business real estate, and vacation homes like timeshares. When it comes to the unique system of owning a timeshare property, it can be difficult to predict what might happen to that property if you file for bankruptcy. With the help of Behm Law Group Ltd., you can work through any type of individual bankruptcy in Windom, MN, and file a strong case that will provide long-term debt relief.

 

The two common types of individual consumer bankruptcy, Chapter 7 and Chapter 13, treat properties very differently. Chapter 7 liquidates non-exempt assets like non-homestead real estate with some opportunities to assert exemption claims to some properties. This liquidation of non-exempt assets is done in exchange for the discharge of the related debts. Chapter 13, on the other hand, reorganizes debts into a repayment plan that provides for the payment of any debts secured by a property on adjusted loan terms.

 

In filing for Chapter 7 bankruptcy, you can sometimes use the Wildcard Exemption to protect your timeshare from the liquidation process. If you use this exemption for other properties instead, your bankruptcy trustee will sell your timeshare and return the value of that sale to your timeshare lender. However, if your timeshare value is equal to or less than the debt you owe, your trustee won’t bother selling the property, and you can maintain possession of it if you continue making payments on the related debt.

 

In filing for Chapter 13 bankruptcy, your timeshare will most likely be included in your repayment plan as a secured debt to be repaid under adjusted loan terms or surrendered. You will have to prove that your income will allow the amount of the debt to be included in your plan without compromising your disposable and discretionary income. If you can’t prove that your income will allow your timeshare to be included in your plan, you will have to surrender it in exchange for the discharge of that debt.

 

In the event that your bank forecloses on your timeshare before you file for bankruptcy, you can still resolve any remaining debts related to that property. This includes debts from maintenance fees or debt from the deficiency between what you owe and the proceeds of the foreclosure. A timeshare can also be surrendered voluntarily for liquidation in any type of bankruptcy if you do not wish to keep it. If you do surrender your timeshare, you won’t be liable for maintenance fees or any other debts related to the property in a chapter 13 bankruptcy case.  However, such timeshare related debts are not generally subject to discharge in a chapter 7 bankruptcy proceeding.

 

If you have a timeshare that you want to keep or surrender in your bankruptcy case, Behm Law Group can help you work through the process of claiming exemptions, organizing a repayment plan, and any other actions that need to be taken depending on the type of bankruptcy you file. To learn more about filing for bankruptcy in Windom, MN, contact us at (507) 387-7200 or via email at stephen@mankatobankruptcy.com today.