Industries Most Likely to File Commercial Bankruptcy Due to COVID-19

Today’s economic and social circumstances are continuing to be unpredictable and unstable. Unfortunately for investors and business owners, this can mean dramatic variations in the economy. With coronavirus infections still spiking and most businesses having operations limited in some way, a wide range of industries are struggling to stay afloat.

If you’re a business owner in this climate or even if you’re an individual having a hard time with current finances, Behm Law Group, Ltd. can provide expert legal advice and protection to help you resolve debts by filing for bankruptcy in Fairmont, MN and the surrounding area.

Our skilled attorneys work with clients filing for personal bankruptcy including Chapter 7, 12, and 13, in addition to sole proprietorship or partnership-owned business bankruptcies. We expect to see an increase in small business bankruptcy cases throughout many industries, but some industries may be impacted much more than others.

Some of the hardest hit industries include:

 

Theaters, both film and stage, will most likely still be avoided by many customers after they open. With the severe impact of the initial shutdowns already forcing theaters into dangerous territory, the continued decrease of attendance doesn’t bode well for the future.

Restaurants will also find the coming terrain difficult. Dine-in services are still unavailable in many U.S. regions, and take-out consumption has been greatly reduced. Locally owned restaurants, cafes, and other small food service providers will find it hard to move forward successfully.

Boutique stores and gift shops will suffer as well, unless they can provide curbside and shipping services that are accessible to their customer base.

Gyms, spas, and other similar health centers are also in danger of failure due to decreased consumer interest. Since the pandemic hit, health-conscious individuals have been more likely to find at-home workout routines and self-care solutions.

Sports arenas, local or otherwise, may not open for some months. When they do, attendance is expected to be low, and many sports centers and arenas will suffer financially because of this.

Amusement parks and entertainment centers will see a similar decrease in attendance when they re-open. If the infection rates and exposure in the U.S. don’t change by the next summer season, many parks may be forced to close.

 

These industries are just the tip of the iceberg when it comes to decreases in consumer spending and participation. The avoidance of these often public, busy commercial operations is already showing effects in current sharp economic declines.

 

If you own a business suffering from COVID-19 shutdowns, Behm Law Group, Ltd. can help you alleviate your debts and work with you through a bankruptcy case. Contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com to file for bankruptcy in Fairmont, MN.

Potential Covid-19 Student Loan Relief Act of 2020 and Debt Relief through Bankruptcy

Tuitions in the United States are higher than ever before, and individuals who graduated within the last ten years are facing large amounts of student loan debt. For those already struggling with additional debts, student loans with high interest rates can push some people to the point of needing debt relief. With the additional financial stresses of the current pandemic times, many people are turning to bankruptcy as a source of government-regulated debt relief. At Behm Law Group Ltd., we can help you find long-term financial stability and debt relief in Redwood Falls, MN, and the surrounding area by filing for bankruptcy.

 

While student loans are typically exempted under 11 U.S.C. § 523(a)(8) from the general discharge awarded at the end of the bankruptcy process, with some rare exceptions, there may be some changes as to how student debt is treated in bankruptcy due to a potential Covid-19 relief act.

 

The many lingering effects, both medical and financial, of the peak of the coronavirus pandemic and subsequent shutdowns are still being recognized and processed by the U.S. government, and acts like the potential Covid-19 Student Loan Relief Act might be put in place until national health and economic conditions are more stable. The initial CARES Act of March 2020 put many other benefits into place, including stimulus checks and additional federal unemployment, but now that much of that first act is coming to a close, new legislation will likely be enacted to continue addressing the severe economic effects of the pandemic.

 

For now, those with federal or private student loans looking for debt relief through bankruptcy may be able to have those loans discharged depending in a few specific circumstances. Primarily, discharge of student loans in bankruptcy is only available to filers who have been directly economically affected by the coronavirus shutdown. This means:

 

Your income was significantly reduced because of Covid-19. This reduction must be a certain percentage, depending on your prior income. Qualifying reductions of income include:

  • 20% reduction for those earning $75,000 or less;
  • 30% reduction for those earning $75,000 to $125,000;
  • 40% reduction for those earning $125,000 or more.

Your household’s primary income earner passed away during the pandemic shutdowns. The timeline for the period this rule covers will be outlined more specifically in the legislation’s details.

You were permanently disabled during the shutdown/pandemic. Again, the timeline will have more specifics for qualifying dates in the legislation’s details.

 

While the requirements of the potential Covid-19 Student Loan Relief Act are highly limiting, the legislation could open the door for many more people struggling financially to benefit from student loan discharge in addition to the discharge of the other usual debts included in a bankruptcy.

 

To learn more about how the new stimulus legislation might affect your bankruptcy case, more about qualifying for student loan discharge, or more about how filing for bankruptcy can be an effective source of debt relief in Redwood Falls, MN, and the surrounding area, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

Litigation That Can Move from State Court to Bankruptcy Court

Working through the U.S. legal system is often a complex process, and no matter what type of case you’re handling, it’s likely that details will vary greatly from other similar cases. For example, if you’re working through a state court case that involves litigation and one of the parties in the case files for bankruptcy relief, certain aspects of the litigation may be moved to bankruptcy court.

 

When this sort of thing happens, it’s essential to have the expertise of a bankruptcy attorney on your side. Whether you’re involved in state court litigation or not, Behm Law Group, Ltd. attorneys can guide you through the process of filing for bankruptcy relief in Jackson, MN.

 

Filing for bankruptcy is a nuanced process, and moving civil litigation from state court to bankruptcy court can make the bankruptcy process even more complicated. There are several types of litigation that may result in the removal of a case from state court to bankruptcy court. All litigation that involves the payment from one party to another will impact a bankruptcy case because the litigation may piecemeal or dilute resources that would otherwise have been used to repay creditors in a bankruptcy. For example:

 

Fraud: A common example of a fraud litigation that may be moved to bankruptcy court is when a creditor files suit against a debtor and claims the debtor misrepresented one’s financial standing in a repayment contract. The bankruptcy court needs to determine if the debt would be discharged in a bankruptcy outside of the litigation case. If the bankruptcy court determines that fraud has been committed, the bankruptcy court could decide that the debt is not dischargeable which could change the value paid to all creditors in the bankruptcy estate.

Personal injury: In personal injury litigation, the offender may need to make monetary restitution to the victim or the victim’s family. If the offender also files for bankruptcy relief, the money that could be used to pay the victim in the personal injury litigation could be used to pay other creditors as well through the debtor’s bankruptcy estate. This means there could be less money to repay the personal injury creditor.

Business: The movement of business litigation to bankruptcy court occurs most commonly when shareholders of a company file a lawsuit against that company for negligently or intentionally causing their stock to lose value due to ineffective or incompetent business decisions or outright corruption. If the company then files for bankruptcy relief, the shareholders will likely request that the litigation case be moved to the bankruptcy court to save money. If the case is handled in bankruptcy court, the process would likely be less costly for the parties.

 

The results of moving litigation from state court to bankruptcy court can be highly varied depending on the circumstances and timeline of any particular case. If you are considering filing for bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com to learn more about the process.

Case Dismissal without Prejudice and How Bankruptcy Assistance Can Help

If you are working through a difficult financial time, you are not alone. The results of the Covid-19 pandemic and associated economic hardships are impacting millions of individuals and businesses across the United States. Through the process of filing for bankruptcy, debt relief and financial stability are all possible for people who are struggling to pay their bills.

 

Filing for bankruptcy may seem like a tough choice, but it’s a much more common occurrence than you might think. In fact, bankruptcy is a legal process that aids many individuals and businesses in need of positive debt relief and financial rehabilitation. If you take the step to file for bankruptcy relief, Behm Law Group Ltd. can provide you with bankruptcy assistance in St. Peter, MN, and the surrounding area. Our attorneys’ expert legal support can help you work through a case and limit the risk of having your bankruptcy case dismissed with or without prejudice.

 

To eliminate the potential for abuse of the bankruptcy system, the U.S. Bankruptcy Court system has strict requirements for filers. Bankruptcy petitions involve extensive documentation of your financial situation and rigorous paperwork on top of pre-bankruptcy requirements. The guidance and support of a Behm attorney can help you navigate through the very nuanced bankruptcy filing process and prevent the possibility of case dismissal.

 

If there is intentional fraud or other such issues with your case, the court could dismiss your bankruptcy case with prejudice, and this ruling comes with its own significant restrictions on being permitted to file for bankruptcy relief again and the potential of criminal prosecution. However, even if there is no intentional fraudulent behavior or abuse of the bankruptcy system involved in your case, there is still the possibility of that your case could be dismissed without prejudice. Dismissal without prejudice is highly improbable with the expertise and legal aid of an experienced lawyer. If you choose to file without the support of an attorney, you will have a greater chance for dismissal of your bankruptcy case without prejudice.

 

In fact, dismissal without prejudice can occur if you:

 

  1. Do not file the correct bankruptcy forms or fail to fill out a form accurately
  2. Do not submit full documentation of your financial standing that supports your bankruptcy paperwork
  3. Do not perform all pre-bankruptcy requirements, including the attendance of a credit counseling course with an approved credit counseling agency
  4. Do not attend the 341 hearing
  5. Do not make monthly payments to your trustee in the event you file a Chapter 13 case and have a repayment plan approved and put into motion for a three- to five-year period
  6. Fail to meet any additional deadlines or paperwork requirements that may be specific to your case

 

If the court dismisses your case without prejudice, you can file again right away with corrections made and other failures remedied. However, if you file again right away, the automatic stay placed on your creditors’ ability to collect debts is limited to 30 days. Also, if you have two or more cases dismissed within the past year, you will receive no automatic stay protection when you file again.

 

To learn more about receiving bankruptcy assistance in St. Peter, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

The Fair Debt Collection Practices Act and Finding Debt Assistance

No matter what your financial situation is, you don’t deserve to be harassed by creditors and collection agents. In fact, any aggressive or manipulative debt collection practices are illegal, thanks to the 1962 Fair Debt Collection Practices Act (FDCPA). If you’re struggling to meet debt payments each month, you may begin to see some of the nastier collection practices creditors employ. If you’re experiencing that kind of aggression, remember that it’s illegal and you can protect yourself against it. At Behm Law Group Ltd., we see many clients take action to protect themselves from creditors by finding effective debt assistance in Mankato, MN, and the surrounding area by filing a bankruptcy case.

 

While there are ways to protect yourself against aggressive creditor action without filing for bankruptcy, the advantage you gain with a bankruptcy petition and the subsequent automatic stay can be extremely impactful. As soon as you file a bankruptcy petition, the court places an automatic stay on the collection actions of your creditors. If they attempt to continue collections, they may be facing legal repercussions and significant punitive, monetary sanctions. With the additional protection of a Behm Law Group attorney, you can be sure you will be safe from creditor harassment for the duration of your bankruptcy case and afterward.

 

Even if you aren’t filing for bankruptcy, you can still trust in the FDCPA to protect you from creditor misconduct. Under the laws outlined in this act, creditors are prohibited from the following:

 

  1. Calling you without identifying themselves as your creditor, a collection agency, or other related party tasked with collecting on your debt.
  2. Calling you with excessive persistence.
  3. Calling you during inconvenient hours of the day or any time at night (9 pm to 8 am).
  4. Call you or otherwise contact you at your workplace if your employer does not allow it.
  5. Contacting any third parties other than your original creditor (if they are a hired collection agency), credit reporters, and your attorney. The exceptions to this are spouses, co-debtors, and parents of minor-age debtors—all of whom they can call unless you have a written request for them to stop contact.
  6. Claiming to be an attorney.
  7. Claiming you owe more money than you do or adding extra interest, fees, and charges that are not legally included in your contract.
  8. Sending you fake legal documents.
  9. Threatening you with violence.
  10. Using profanity or obscene language with you or other parties.
  11. Telling you that you will go to jail if you don’t pay the debt.
  12. Telling you that the non-payment of your debt is a criminal offense.

 

If you are experiencing any of these illegal actions with your creditors or collection agencies, you have the power to stop them. You can ask them directly to stop in a formal letter, which often works. You can also document their illegal actions if you suspect it will be used in court, file a complaint with the Federal Trade Commission (FTC), and/or sue them in court.

 

To learn more about creditor actions and bankruptcy debt assistance in Mankato, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.