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Repayment Plan Adjustments for Chapter 13 Bankruptcy in Pipestone, MN

Bankruptcy is a legal debt remedy that many people believe is limited to individuals struggling severely due to a low income and debts they cannot repay. Many people aren’t aware that Chapter 13 (aka “wage earner” bankruptcy) can provide just as much support to those with steady incomes and accumulated debts as Chapter 7 (aka “liquidation” bankruptcy) offers those at or below a state’s median or average income. Both chapters are valuable support systems for individuals in many different financial circumstances. Whether you plan to file for Chapter 7 or Chapter 13 bankruptcy in Pipestone, MN, Behm Law Group Ltd. can help you build a strong case and receive long-lasting debt relief.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy works to reorganize your debts into a three- to five-year repayment plan that fits your income. Over that time, you will pay only a percentage of your unsecured debts, like credit card debts and medical bills.  At the end of the three-to five-year period, the remaining balances on those unsecured debts will be discharged.

With secured debts, like mortgages or car loans, one can pay those debts in chapter 13 under adjusted and more favorable terms.  With a vehicle loan, for instance, one can lower the applicable interest rate.  Further, one must only pay the present value of the vehicle rather than what is actually owed on the subject loan.  This is called “cram down”.  For instance, if one has a vehicle that is worth $10,000.00 but one owes $20,000.00 on the subject loan, one must only pay the $10,000.00 present value.

Also, if someone is delinquent or past due with one’s mortgage payments, those past due payments can be paid back or “cured” through a chapter 13 plan and the mortgage lender will not be able to commence foreclosure proceedings.

Your submitted petition will include your proposed repayment plan that you and your attorney have worked out together. The trustee will review the plan and your creditors will be allowed to examine it as well.  Your bankruptcy plan will then be submitted to and approved by the bankruptcy court.

Although the court may take a month or two to review and approve a submitted plan, you will still be required to start payments to the trustee within thirty (30) days after the plan has been filed with the bankruptcy court.  During this time, however, it’s possible that you may have a change in financial circumstances that necessitates a modification to your plan even before it is approved by the bankruptcy court.

Submitting an explanation and documentation to the bankruptcy court denoting the changed financial circumstances will likely be an acceptable basis for the bankruptcy court to allow the plan to be modified before approving it.   Presume that you initially submit a three-year (36 month) plan that provides for monthly payments of $500.00.  Presume further that after you submit your initial plan your monthly income decreases so that you can only afford to make monthly payments of $200.00.  If you and your attorney provide the chapter 13 trustee and the bankruptcy court with documentation denoting the reasons for the income changes, you can file a modified three-year (36 month) chapter 13 plan that provides for monthly payments of $200.00.

If you have income or other financial circumstances that change after your plan is confirmed or approved by the bankruptcy court during your three- to five-year repayment period, you will be able to make further adjustments. If you’ve had a major life change like losing your job, getting divorced, or having a child, you can file a motion with the bankruptcy court to change the terms of your chapter 13 plan.

To learn more about repayment plan adjustments with Chapter 13 bankruptcy in Pipestone, MN, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

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Today’s Results of the Pandemic and Bankruptcy in Luverne, MN

While vaccination distribution is greatly improving worldwide conditions in the face of the coronavirus pandemic, there are still residual effects of a global economic shutdown negatively impacting the finances of many people and businesses so far in 2021.  The three stimulus packages in the United States have done their part in protecting many households and businesses from severe financial instability, but that financial support has limitations, and it is not something that people and businesses can rely on indefinitely.  The positive economic effects of the three Covid-19 stimulus packages have mostly been fully realized. Today, many businesses and individuals need to turn to bankruptcy to resolve their debts that were accumulated in 2020. While many different households and businesses can use bankruptcy for debt relief, the pandemic and subsequent shutdowns have greatly affected several industries much more than others. If you are considering filing for bankruptcy as a small business or as an individual consumer, Behm Law Group Ltd. can help. Our attorneys will guide and protect you throughout the process of filing for bankruptcy in Luverne, MN, and the surrounding areas.

 

We primarily work with individuals and small businesses filing for Chapter 7 liquidation or Chapter 13 reorganization bankruptcy. So far, the federal government’s stimulus support and many other aspects of the 2020 CARES Act have protected low-income households from bankruptcy.  Federal loans, federal and state grants and other Covid-19 related financing alternatives offered by various banks and credit unions have helped many small businesses stay afloat during the shutdowns. However, as previously noted, there are several industries that were more highly impacted by the pandemic, and we are beginning to see more and more bankruptcies in these industries.

 

Industries most affected and showing the most increase in bankruptcy rates include:

 

  • Real estate showed an increase in bankruptcies from 605 in 2019 to 985 in 2020.
  • Oil and gas had an increase from 236 bankruptcies in 2019 to 785 in 2020.
  • Restaurants showed an increase from 400 bankruptcies in 2019 to 660 in 2020.
  • Entertainment increased bankruptcy rates from 132 in 2019 to 524 in 2020.
  • Retail showed an increase from 284 bankruptcies in 2019 to 440 in 2020.

 

These numbers are just a sign of how devastating the pandemic has been for these industries as well as others such as tourism, gaming, and hotel industries.  As we saw with the effects of the 2008 financial crisis, the peak in bankruptcy filings that the economic recession directly caused didn’t happen until 2010.   It is likely that individual and business bankruptcies will begin to greatly surge during the second half of 2021 and throughout 2022 and into 2023.

 

Even with government assistance, many companies can only pay their workers what they’re owed before shutting down. These struggles will continue while our economy goes through its healing process.

 

The good news is that bankruptcy is always an option for individuals and businesses alike. The government-sanctioned process of permanent debt relief through bankruptcy has been and will continue to provide support for those struggling financially.

 

To learn more about how filing for bankruptcy in Luverne, MN, and the local region can help you get back on your feet as an individual or business, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

 

 

 

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Why Bankruptcy is Better for Debt Relief in Windom, MN Than a “Debt Relief Program”

There are a few options available for those struggling to make debt payments on time. One is to work directly with your creditors to find some kind of agreement to reduce your debt or negotiate lower temporary payments with a future lump sum. Another is to work through a debt consolidation, settlement, or resolution provider and pay them to work with your creditors on your behalf. You can also choose a route through the U.S. legal system and file for bankruptcy. For anyone straining to repay debts, one of these choices may be better suited than others, depending on their circumstances. At Behm Law Group, Ltd., we never recommend working with a debt relief program. Not only are these programs limited in the type of debt relief they can provide in Windom, MN, but they’re also extremely costly and highly detrimental to credit scores. While bankruptcy also has its costs and can impact your credit, it’s almost always a better option for those with multiple types of debts they can’t repay.

Debt relief programs like the U.S.’s largest, Freedom Debt Relief®, may seem like an easier path than going through the process of filing for bankruptcy. In reality, however, these programs tend to prey upon debtors who are unfamiliar with all their options or have outdated perceptions of the social implications of bankruptcy.

While debt relief programs might look good on the surface, and they certainly make an effort to advertise the “benefits” of choosing debt settlement, consolidation, or resolution with their services, potential customers of any relief program should make every effort to read the fine print before choosing.

 

Fine Print of Debt Relief Programs

  1. Debt relief programs are expensive. Program fees range from around 15% to 35% of the debt that’s being negotiated. That may not seem too large of a fee, but it’s taken out of every debt handled. If you have, for example, the debts that Freedom Debt Relief says is the average they handle ($25,000 across multiple credit lines), you will pay them between $3,750 and $8,750. With those same unsecured debts, you would have a Chapter 7 bankruptcy court filing fee of around $338.00, and a flat rate attorney fee of between $1,000 and $1,750.
  2. Debt relief programs take a long time. Freedom Debt Relief says they handle cases in a two- to four- YEAR-LONG time frame. Chapter 7 bankruptcy takes as little as three to four months. Additionally, debt relief programs typically extend the period you will spend repaying the debts they negotiate up to five years and even longer.
  3. Debt relief programs only handle specific debts. Generally speaking, debt relief program customers only have their credit card and medical bill debts negotiated. In contrast, bankruptcy handles those debts in addition to mortgages, car loans, tax debts, debts related to any other properties, and many others.

When you consider these facts, it’s clear that filing for bankruptcy is a less expensive, faster, and much more effective option. More importantly, with regard to your credit record, bankruptcy has a much more positive overall impact that debt relief programs.  With bankruptcy, your credit rating will fall but there will be a floor from which it will start to rehabilitate immediately after your case is filed.  With so-called “debt relief programs”, your credit rating will be negatively impacted every month for several years and there will be no chance for the rehabilitative process to start.

To learn more about why it makes sense to use bankruptcy for debt relief in Windom, MN and the surrounding areas, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

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Why a Bankruptcy Lawyer is Worth the Cost

Bankruptcy is a court administered legal process that almost always requires the support of a bankruptcy lawyer to be done correctly. Like most other legal processes, you can represent yourself in a case, but bankruptcy is a complex and nuanced procedure, and having the support of a bankruptcy lawyer will vastly improve your chances at filing and completing a successful case. In the United States, 8-10% of individuals filed a bankruptcy case without the help of a lawyer, and only around 2% of those cases were successfully completed. Compared to the 60% success rate of attorney represented cases, it’s undeniable that the guidance and support of a bankruptcy lawyer is crucial despite the modest costs involved. At Behm Law Group, Ltd. we can give you the protection and legal advice of an expert, skilled bankruptcy lawyer in Mankato, MN.

Specialize in Chapter 7,12, and 13

Our firm specializes exclusively in Chapter 7, 12, and 13 bankruptcy matters. We work primarily with both individual filers and businesses. As bankruptcy attorneys, we understand the financial difficulties clients are facing, but our guidance and protection is well worth the modest costs. Our assistance can actually save you time, stress and further legal costs.

What We Do

Behm bankruptcy lawyers help you build your bankruptcy case every step of the way, from determining what chapter to file to preparing paperwork and finalizing case details, to providing protection even after your case is closed if aggressive creditors continue to pursue you. This includes:

  1. Taking into account your current income-to-debt ratio and payments you may be delinquent with, such as mortgage payments or vehicle loan payments, to determine if Chapter 7 liquidation or Chapter 13 reorganization will be effective for you.
  2. Case preparation such as helping you with the Means Test, valuing your property so you can correctly disclose your assets to the bankruptcy court, guiding you with what exemptions to choose in order to protect your property, and helping you with budgeting and the planning of your finances after your case is closed.
  3. Working with the bankruptcy trustee and the bankruptcy court during the processing of your case, including completing all your paperwork and providing correct documents to the bankruptcy trustee, helping you prepare for your bankruptcy hearing, protecting you from creditors that may ignore the injunctive mandates of the automatic stay, negotiations with creditors you want to continue working with on reaffirmation agreements, and helping you create and propose an acceptable and effective Chapter 13 bankruptcy plan .
  4. Supporting you even after your case is closed with protection from creditor harassment and helping you make chapter 13 repayment plan adjustments when your financial circumstances change.

Even if your debts and financial circumstances appear to be simple, a bankruptcy lawyer will still play an essential role in helping you file a successful case, avoid the possible dismissal of your case, and protect you from aggressive creditors. To learn more about how a bankruptcy lawyer in Mankato, MN is worth the fees involved, contact Behm Law Group, Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com

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Bankruptcy Mills What You Need to Know

If you’re struggling financially, you need to know what support systems are in place to help you recover and get permanent financial stability. For many people each year, that support system comes in the form of bankruptcy. Filing for bankruptcy is a highly effective way to resolve debts and get relief from financial stress for those in many different circumstances. Whether you file for Chapter 7 liquidation bankruptcy or Chapter 13 reorganization bankruptcy, you can find debt relief through a legitimate legal process. If you’re considering filing for bankruptcy, getting help from a professional who truly has your best interests in mind is an important part of the process that will protect you from potential bankruptcy pitfalls. With the legal protection and guidance of Behm Law Group Ltd., you can file a successful case for bankruptcy in Waseca, MN, and the surrounding areas.

Specialize in Bankruptcy

There are other firms in the region who handle bankruptcy cases; however, at Behm Law Group, Stephen J. Behm has specialized exclusively in bankruptcy for nearly 20 years. Other firms might have the bulk of their attention on other civil or criminal cases, but our legal expertise is solely dedicated to individual and small business bankruptcy cases.   In fact, since 2003, Stephen Behm has been a certified consumer bankruptcy specialist certified by the American Board of Certification.

Anyone who practices responsibly in bankruptcy will not try to “sell you” on the bankruptcy process.  Everyone’s life circumstances are different.  Depending on the specific circumstances one is facing, bankruptcy is sometimes not the best option.  Any attorney who truly has your best interests in mind always needs to consider that dynamic.  Compared to our small, dedicated firm, “bankruptcy mills” are a dramatically different experience for filers who simply need help with their case.  From the benefit of nearly 25 years of bankruptcy practice experience, it is the opinion of Stephen J. Behm that anyone looking to file a solid, successful case should avoid bankruptcy mills and so-called national bankruptcy law firms.

What to be on the Alert For

Again, the following is based on the professional opinion of Stephen J. Behm.  The biggest sign of a bankruptcy mill or a national bankruptcy law firm is excessive advertising on bulletin boards, radio, and TV commercials; junk mail ads; and even bench signs. Bankruptcy mills advertise affordable prices, but those prices don’t mention their similar approach to every individual case. Bankruptcy mills usually will take on hundreds of cases. Their goal is to process as many cases as possible as fast as possible. They will often hold themselves out as being better and more highly rated or more highly qualified because of their size.  They will indicate that they have ‘filed thousands of cases” or “the most” cases in a particular area.  Some indicate that the bankruptcy process is an “easy process” where one only has to fill out “a bunch of forms”.  The filing of a bankruptcy petition is a serious legal matter and it requires work on your end to provide your attorney with all the documentation and information that your attorney needs to accurately and completely prepare your bankruptcy petition.  Your bankruptcy petition and related schedules are legal pleadings that you sign under oath and subject to penalty of perjury.  The factual representations made in those legal pleadings need to be accurate.  The filing of any bankruptcy case is certainly nothing to fear.  However, it needs to be done correctly and all the disclosures required by the bankruptcy code need to be made.

How They Work

Again, the following represents the opinion of Stephen J. Behm.  Bankruptcy mills and national bankruptcy law firms typically work hard at the initial consultation to get the filer to sign a retainer agreement and provide the first down payment. This initial consultation is usually done with a non-attorney staff member called an “attorney intake coordinator.” The client is then passed to a “prep team” of other non-attorney staff. This team gathers documents and files paperwork for the client.  A client may not even meet an attorney until the Meeting of Creditors.  Choosing to file for bankruptcy relief can be terrifying.  It is essential that one sits down across a desk with one’s attorney and visits personally and in a tactile manner with that attorney.  While videoconferencing tools such as Zoom, which is what we use at Behm Law Group, Skype and GoToMeeting are very helpful, nothing has more value and is more important in the bankruptcy process than being able to visit with your attorney in person.

To learn about the best way to file for bankruptcy relief in Waseca, MN or to determine if bankruptcy is even the right course for you, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.