At Behm Law Group Ltd., we provide legal guidance, support, and protection for individual Chapter 7, 12, and 13 bankruptcy cases as well as Chapter 7 and Chapter 13 business cases. Chapter 7 works to discharge your debts in exchange for the liquidation of your non-exempt assets. Both Chapter 13 and 12 work as reorganization processes in different ways. When you file for reorganization bankruptcy, your debts are restructured into a manageable repayment plan that lasts a predetermined amount of time (usually three to five years). If you have debts you know you can’t repay, even with a steady income, we can help you file for reorganization bankruptcy, AKA wage-earner bankruptcy, in Fairmont, MN, and the local area.
Wage-Earner Bankruptcy
Chapter 13 is the most common type of wage-earner bankruptcy filed. Chapter 12 is limited to family farmers and fishers with specific requirements for eligibility. Aside from Chapters 12 and 13, individuals can file one other type of reorganization bankruptcy: Chapter 11.
Chapter 11
Chapter 11 is usually a bankruptcy reserved for corporations, limited liability companies and other kinds of businesses, but in some circumstances, individuals can use Chapter 11 to resolve their debts. Almost always, an individual Chapter 11 involves real estate investment reorganization or the handling of unsecured debts that are too high for Chapter 13 relief.
Real Estate Investors
Real estate investors filing for Chapter 11 bankruptcy can rewrite mortgages, reduce interest rates, and extend the terms of repayment. For example, a filer could rewrite a mortgage on a property worth $80,000 tied to a mortgage in the amount of $100,000. That $100,000 mortgage could be rewritten or crammed down to the actual $80,000 value of the property. Then the terms of repayment could be extended up to an additional 30 years, making the monthly payment requirement much lower.
Unsecured Debt
If filers have unsecured debts higher than $419,275, they can use Chapter 11 to reorganize those debts and their secured debts into a repayment plan. This reorganization process works similarly to Chapter 13. Chapter 11 repayment plans, lasting a predetermined amount of time, will include terms for the payment of secured debts under more favorable terms to you. Chapter 11 repayment plans will also provide for only the partial payment of your unsecured debts at 0% to 100% of what you initially owed.
Disposable Income
Filers will have to dedicate all their disposable income to meeting monthly payments. Filers also can reserve discretionary income for household expenses and necessities, such as food, gas, utilities, and more.
Individual consumer Chapter 11 cases are not common. For any Chapter 11 or Chapter 13 cases for wage-earner bankruptcy in Fairmont, MN, and the surrounding area, Behm provides expert attorney services. Contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com today to learn more.
