What Happens to Secured Property in Chapter 7 Bankruptcy in St. Peter, MN

When you file for bankruptcy, information about all your debts, income, and properties must be disclosed in your bankruptcy paperwork. Documentation about your financial history as far back as six months to two years must be reviewed for any bankruptcy chapter. Any material inaccuracies or omissions of debts, income, and properties can be considered fraudulent and result in a dismissal of your case. Because of the strict and thorough documentation requirements for any bankruptcy petition, filing without the help of a professional can be difficult and risky. The guidance and protection Behm Law Group, Ltd. attorneys provide will help you file a successful petition and receive long-term debt relief through Chapter 12, Chapter 13 or Chapter 7 bankruptcy in St. Peter, MN.

Chapter 7 bankruptcy is the most filed for individual consumers and businesses alike. Chapter 7 works to liquidate non-exempt assets in exchange for a discharge of debts. The value of your non-exempt liquidated property is distributed among your creditors. Because a key part of a Chapter 7 bankruptcy case is the liquidation of your non-exempt assets, it’s important to know how you can protect property from that process.

Protecting properties from liquidation is accomplished by asserting exemptions provided either under state law or under the bankruptcy code, but it can also be done through a reaffirmation agreement or through redemption.

  1. Exemptions: Allotted exemptions vary by state.  In most states, you are allowed to claim the federal exemptions provided under the bankruptcy code instead of the exemptions provided by a particular state if the federal exemptions serve your situation better. Typical exemptions claimed protect the home, car, and household appliances, clothing, life insurance policies, jewelry and many other items from liquidation. Exemptions also change over time as incomes and costs of living are adjusted. A recent list of common Minnesota exemptions can be found here.
  2. Reaffirmation agreement: In Chapter 7, if you are current on payments for a certain debt, such as your car loan, you can file a reaffirmation agreement to have that debt preserved or exempted out of the bankruptcy process. This basically leaves a debt as-is, meaning you can keep your property secured by the subject loan, but you still have to make payments on the debt as usual. More on reaffirmation agreements can be found here.
  3. Redemption: Finally, you can protect a property from the liquidation process through redemption. You indicate that you wish to redeem a certain property item when you file your initial bankruptcy petition paperwork. You notify the court and the creditor that has a lien that you wish to keep a certain item of property.   Through redemption you must pay a secured creditor the present value for the property that serves as the creditor’s collateral.  Typically, that value is paid in one lump-sum payment to the secured creditor.  However, sometimes the issue of what constitutes present or current value for that asset will be disputed.  If you and the affected secured creditor disagree on that value, the issue is presented to the court at a redemption hearing and the court determines what constitutes the present or current value for the asset.

These ways of protecting a property from the liquidation process can become complex depending on the circumstances of each loan, property type, creditor, and much more. Behm Law Group, Ltd. can help you work through this and many other parts of a Chapter 7 bankruptcy in St. Peter, MN. Contact us at (507) 387-7200 or stephen@mankatobankruptcy.com today to learn more.

 

Who Files for Bankruptcy in Jackson, MN?

The most common feelings of those who are in a difficult financial situation are a sense of being stranded, trapped, and alone. If you’re struggling to make debt payments on time, the truth is that you are not alone. Each year, thousands of U.S. citizens file for bankruptcy because of debts they will never be able to repay. The social stigma that may linger around bankruptcy today doesn’t take into account the fact that it is actually a vital part of a balanced economy.

The process of bankruptcy is designed to bring those feeling alone with their debts out of their financial stress so they can again become active, participating members of the economy. Behm Law Group Ltd. attorneys work with clients in diverse financial and personal situations, providing legal guidance and protection throughout the process of filing for bankruptcy in Jackson, MN, and the surrounding area.

While it may not seem so to some individuals, many, many people find long-term debt relief through bankruptcy each year. Many of our clients don’t know anyone else in their lives who have experienced it, which is a large part of why they may feel the process is daunting. However, because many are ashamed for having had to file for debt relief, it is not something that they readily share with other people.  It is quite likely that you interact with many people every day, including relatives, who have had to file for relief.

Demographics and other statistics of individual and business bankruptcy filings are reported annually. For the duration of 2021, the effects of the 2020 COVID-19 pandemic on bankruptcy rates can only be projected for now, but all recent reports in the past year tell us that there is no single demographic that never reports cases. This means cases are filed from all demographics regardless of age, marital status, ethnic background, property ownership, or types of debt.

When looking at the averages of that broad range of demographics, the individual and businesses filers look something like the following based on available 2020 reports:

Total bankruptcy cases:                      544,463

Total Chapter 7 filings:                      381,217

Total Chapter 13 filings:                    154,341

Total Chapter 11 filings:                        8,113

Total individual bankruptcy cases:     522,808

Total individual Chapter 7 filings:      369,020

Total individual Chapter 13 filings:    153,236

Total business bankruptcy cases:       21,655

Total business Chapter 7 filings:        12,197

Total business Chapter 13 filings:       1,105

Total business Chapter 11 filings:       7,561

This means the most commonly filed cases were Chapter 7 liquidation at 70.02%; the next most common of Chapter 13 reorganization drops to 28.35%, and finally, Chapter 11 reorganization drops to 1.49% (some additional uncommon chapters totaled to 0.14%).

While no demographic group is exempt from having to file for bankruptcy relief, there are ways to target which regions have the most cases each year. For 2020, the states that topped the list are mostly in the U.S. Southeast, including Alabama, Georgia, Mississippi, Arkansas, Kentucky, and Tennessee.

These averages can give you an idea about who files for bankruptcy, but the truth is that people and businesses of all kinds file. To learn more about the benefits of bankruptcy in Jackson, MN, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing stephen@mankatobankruptcy.com.

 

 

Could the Economy Recover Faster with Easier Bankruptcy in New Ulm, MN?

The U.S. economy fluctuates in response to various political, social, financial, and environmental effects. After World War II, for example, the economy thrived largely due to the Allies’ victory over the Axis powers and because the continental United States was never invaded or occupied. Today, we’re seeing the effects of the 2020 coronavirus pandemic on the economy. With hundreds of businesses forced to close during the shutdowns of the early pandemic and with many left without work, the U.S. unemployment rate rose 2.8% from January 2020 to January 2021. If you’re among those struggling to meet debts with a low income, you’re not alone. For those facing unmanageable debts, filing for bankruptcy is often the best solution during times of economic downturn. With Behm Law Group Ltd. attorneys, you can build a strong case for bankruptcy in New Ulm, MN, and the local regions.

We often work with individuals filing bankruptcy cases to either liquidate their non-exempt assets in exchange for debt discharge through Chapter 7 or to reorganize their debts into a manageable partial repayment plan through Chapter 13. However, we also have worked with many small sole proprietorship businesses that are able to file for Chapter 13 or want to file for Chapter 7 and close their business operations entirely.

Today, for either individuals or businesses, filing for bankruptcy may be the best way to grow and heal the U.S. economy at the municipal, state, and national levels. Stimulus packages have helped many businesses and households stay afloat during some of the most difficult times in the last year, but those packages and federal loans are not enough to stabilize things and prevent what could be an all-out long-lasting depression.

Throughout much of America’s history, failed small businesses were liquidated. While this may appear more logical than having the government and the American taxpayer pour billions of dollars to keep many struggling companies afloat, the fact is that allowing more bankruptcies during times of economic crisis has shown, on multiple occasions, to help the national financial system recover more quickly and avoid even more dire conditions.

The majority of U.S. businesses are not owned as sole proprietorships, which means that Chapter 11 reorganization bankruptcy is an available option that will prevent the company from having its assets liquidated. By allowing the reorganization of business debts through Chapter 11, companies maintain their operations.  They continue to participate in trading goods and services and they continue to buy from other markets and pay their workers. Allowing more businesses to have access to bankruptcy will support the economy in this way rather than eliminating them as participants in the national economic system.

Additionally, allowing more people access to Chapter 13 bankruptcy means more creditors will be repaid at least part of what they are owed.  It also means that individuals will still be allowed to use their discretionary income to act as consumers and participate more actively in the national economy.

If you’re considering filing for bankruptcy in New Ulm, MN, you may be able to play a role in supporting a faster recovery of the national economy. Contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com to learn more.

 

 

Healing from Physical and Mental Effects with Debt Relief in Worthington, MN

Anyone who has had trouble making payments on time for bills or debts knows the severe stress and anxiety this type of situation can cause. While the saying “money can’t buy happiness” may be true, those who have experienced financial difficulties know that having a reliable income will free up a lot of emotional, mental, and physical space for other emotionally healthy aspects of life. Unfortunately, over 10% of the U.S. population was living below the poverty line in 2019, and since the difficulties many faced during the 2020 coronavirus pandemic, that level is projected to rise to 13.7% in 2021. If you’re facing financial stress because of sudden or accumulated debts, finding positive debt relief will alleviate many negative physical and mental effects money troubles can have on your wellbeing. At Behm Law Group, Ltd., we help individuals and small businesses find long-term debt relief in Worthington, MN and the surrounding area through bankruptcy.

Bankruptcy may carry a stigma for the temporary damage it can do to your credit, but that impact is greatly outweighed by the permanent benefits it provides. For thousands of American households and businesses each year, bankruptcy provides long-term debt relief and effective financial education through credit counseling and debt management assistance.

Debt relief through bankruptcy alleviates the significant mental and physical health effects that financial struggles can have on your wellbeing, including:

  • Stress and Denial: No matter what your own general health conditions are, debt puts stress on your whole life. Not being able to pay that debt exponentially increases that stress. With stress comes many other effects, from digestion and blood pressure issues to anxiety and panic. Many will also deal with this stress through denial, which often increases financial instability and depression.
  • Regret and Anger: Owing a lot of debt can also have a lot of social stigma. Everyone handles this unnecessary and harmful stigma differently, but the most frequent negative reactions are regret and anger. Experiencing regret for having incurred debt you can’t repay may cause someone to make even more poor future financial decisions and may cause someone to have an unhealthy fear or paranoia about one’s finances in general. Filing for bankruptcy not only provides debt relief but also helps individuals learn more about how to manage their finances successfully and in a healthy and productive manner going forward.
  • Anxiety and depression: While stress, denial, regret, and anger all affect your life and health in many ways, those emotions and others caused by debt can also result in anxiety or depression. Anxiety and depression are more common than many realize. In several studies, more than 50% of those who reported having financial difficulties also suffered from anxiety and depression.

Compared to other questionable and fraudulent non-bankruptcy debt relief options like so-called debt consolidation, debt settlement, or debt assistance programs, bankruptcy is significantly more effective for treating financial instability with long-term positive results. To learn more about how Behm Law Group, Ltd. can help you work through bankruptcy for debt relief in Worthington, MN and the surrounding area, contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

 

Benefits of Choosing Behm Law Group, Ltd. as Your Bankruptcy Lawyer in Owatonna, MN

In the southern Minnesota, Behm Law Group, Ltd. is a law firm that devotes its practice exclusively to bankruptcy cases.  Stephen J. Behm is also a certified consumer bankruptcy specialist certified by the American Board of Certification.  We provide representation and guidance for Chapter 7, 13, and 12 cases.  If you’re struggling with debt, bankruptcy is often an effective option for long-term debt relief and financial stability and financial rehabilitation.  Although it helps thousands of Americans get back on their feet financially each year, bankruptcy can still be a complex and nuanced legal process. While it’s possible to file without an attorney, it’s not something we recommend. The help of a Behm Law Group bankruptcy lawyer in Owatonna, MN and the surrounding areas can be critical in navigating the bankruptcy code and filing a successful case.

Behm Law Group, Ltd. is a family-owned law firm with the best interests of all our clients always at the forefront. Our attorneys are skilled in helping people facing many different kinds of financial circumstances. Stephen J. Behm has worked with clients in the local region for twenty-three years, supporting those struggling with accumulated or sudden debt. Our goal as bankruptcy lawyers is to work our clients through a bankruptcy case from start to finish as quickly and as stress-free as possible.

When we hear back from previous clients about their experiences with a Behm Law Group bankruptcy lawyer, we hear a lot of the same great feedback. At Behm Law Group, the peace of mind of our clients is always something we are concerned about and try to promote and improve.  We understand that filing for bankruptcy can be a scary process.  We work hard to be direct with our clients and to apprize them of what they need to do and what documentation they need to produce to get through the bankruptcy process as efficiently and with as little disruption to their lives as possible.  However, we also remain sensitive to our clients’ fears and insecurities about the process.

These terms come up the most frequently from our past clients:

  • Professional: Our attorneys have the education, legal training, and expertise to handle even the most difficult bankruptcy cases. Behm Law Group is also a law firm that many other legal professionals in the area will contact for advice and guidance on financial and bankruptcy court matters. Both our clients and the legal community can rely on our professionalism and experience.
  • Direct: We don’t beat around the bush with our clients. Instead, we believe in delivering an honest evaluation about a case while remaining kind and sensitive to our clients’ worries and fears.
  • Fast: Depending on the chapter filed, our attorneys will work to complete a case from start to finish as efficiently and as quickly as possible without compromising the quality of results for our clients.
  • Knowledgeable: Our staff is proficient in handling a range of financial circumstances with sensitivity to the different life circumstances of all our clients.
  • Understanding: We’ve worked with those struggling to meet debts while also handling many life stresses. From raising children as a single parent to facing unemployment, we are empathetic to all client situations throughout a bankruptcy.
  • Caring: Not only do we wish to see our clients safely through a bankruptcy process with long-term stability for the future, but we also truly care about the emotional and mental well-being of our clients and we care about our community as a whole.

When you choose Behm Law Group, Ltd. for your bankruptcy lawyer in Owatonna, MN, you can trust us to guide you from start to finish in any case. To learn more about our services, contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Why You Can No Longer Choose to File for Chapter 7 Bankruptcy in Mankato, MN Anymore

Bankruptcy has long been an option to individuals and businesses that cannot repay their debts. In the United States, bankruptcy is designed to be the fairest possible process to filers, creditors, and other parties involved. However, since 2005, the consumer bankruptcy process changed significantly with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the establishment of the Means Test and other laws. This act limited individual qualification for chapter 7 bankruptcy, but it also helped streamline and simplify parts of the court process as a whole. If you are considering filing for bankruptcy and don’t know where to start, Behm Law Group Ltd. can help. We provide comprehensive legal protection and guidance for Chapter 13 and Chapter 7 bankruptcy filings in Mankato, MN, and the local areas.

 

For at least ten years before the BAPCPA was put into place, the issue of bankruptcy abuse in the United States was becoming more significant. Filers could choose to file for Chapter 7 bankruptcy with little to no limitations on their income-to-debt ratios and have debts discharged quickly. Because of this, it was the impression of many in Congress that people were taking advantage of the bankruptcy system and were too flippant about filing for bankruptcy relief.  In short, many in Congress believed that filing for chapter 7 bankruptcy relief had become too easy and that the process had become very unfair for the creditors involved.

 

In addition to fewer limitations for one to file for Chapter 7 bankruptcy relief before the BAPCPA was enacted, filers were not required to undergo a pre-bankruptcy filing credit counseling course. According to the BAPCPA, filers must now undergo a credit counseling course with a court-approved agency within 180 days before filing their bankruptcy petition.

 

The most significant change the BAPCPA enacted was the Means Test, which created a mathematical formula of determining whether a filer qualifies for Chapter 7 liquidation or Chapter 13 reorganization. The Means Test measures a filer’s income and debt amounts. If a person’s projected monthly income for a household of their size is equal to or  lower than the state median or average income of a similar-sized household, the person will qualify for Chapter 7 bankruptcy. If their projected income is higher than the state median or average income for a similar-sized household, the filer can only file for Chapter 13 bankruptcy.

 

In addition to stricter rules for qualifying for Chapter 7 bankruptcy and the credit counseling requirement, the BAPCPA also extended the period of time that needs to pass before one can file for chapter 7 bankruptcy relief again.  With the enactment of the BAPCPA, the waiting period was extended from six to eight years.  So, if someone filed for Chapter 7 bankruptcy relief on January 1, 2016, that same person could not qualify for chapter 7 bankruptcy relief again until January 2, 2024.

 

These are two of the main changes the BAPCPA created in the bankruptcy law, but there were several other changes made to protect creditors, such as limiting automatic stay provisions and lien avoidances, establishing stricter case dismissal rules, and changing bankruptcy exemption allowances.

 

Overall, with the passage of BAPCPA bankruptcy filers are unable to choose to file for Chapter 7 bankruptcy unless they satisfy the means test and meet certain other requirements. These limitations help the bankruptcy process maintain fairness and balance between the interests of creditors and bankruptcy filers and they help to prevent many types of potential bankruptcy fraud.

 

To learn more about how filing for Chapter 13 and Chapter 7 bankruptcy in Mankato, MN, and the surrounding areas will impact your debts and other financial circumstances, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing  stephen@mankatobankruptcy.com today.