If you are facing debt you know you won’t be able to repay, filing for bankruptcy could be the most effective option for permanently resolving your financial issues. While filing for bankruptcy might seem scary, it’s actually a government-administered process that provides long-term, effective debt relief for thousands of households and businesses each year. There are several types of bankruptcy that handle debt in different ways. Chapter 7 liquidation bankruptcy is the most common format for an individual consumer case. In this process, the filer’s non-exempt assets are liquidated in exchange for the discharge of several kinds of secured and unsecured debts. For filers who don’t qualify for liquidation bankruptcy because their debt-to-income ratio is too high, Chapter 13 reorganization bankruptcy is another option for debt resolution. This process restructures debts into a three- to five-year repayment plan suited to the filer’s income. The adjusted payment terms are much more favorable than outside of bankruptcy. No matter what kind of chapter you file, Behm Law Group, Ltd. can provide legal guidance and complete bankruptcy assistance in Redwood Falls, MN and the surrounding areas.
Behm attorneys can help you determine if bankruptcy will be the best choice for resolving your financial situation. If it’s the best course of action, we can help you start the planning process for your petition with expert bankruptcy assistance.
Before you file your petition, keep in mind several financial practices you can implement to get the most out of your case and to protect yourself from the consequences of fraud:
Financial Practices
- Upcoming bills: Depending on the case details, bankruptcy will most likely eliminate any utility debts. However, any utility debt you incur after your bankruptcy case is filed will be considered “new debt” that will not be included for discharge in the bankruptcy process. This is also true with several other debts including medical and credit card debt.
- Fund transfers: When you file for bankruptcy, your financial transactions will be examined by your bankruptcy attorney and by the trustee assigned to administer your bankruptcy case. All your income, debts, assets, and accounts are examined, particularly your financial transactions for the six months prior to your bankruptcy filing. Before you file your petition, avoid any unnecessary transfers between credit cards. That is, do not pay off one credit card with another credit card that may have a slightly lower interest rate. If you engage in such a transaction, make sure that it’s reported in your petition. Also, transfers of any assets to other people can appear as fraudulent conduct if it seems like you’re moving assets to prevent the trustee from possibly liquidating them.
- Reasonable spending: Other actions that may look like attempts at bankruptcy fraud are certain spending patterns. If you charge excessively on a credit card right before filing a petition, such as taking a trip to Europe, it might look like you’re abusing the bankruptcy process to purposefully have that debt discharged. The same is true for purchasing luxury items and engaging in any other extravagant spending. Instead, be as frugal as you can while still trying to meet your living expenses.
Bankruptcy Assistance
To learn more about planning before filing your petition and getting the permanent bankruptcy assistance in Redwood Falls, MN you need, please contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.
