For many in precarious financial situations, the option of filing for bankruptcy seems to be only found down a long and complicated road of legal red tape and confusing fine print. At Behm Law Group, Ltd., we understand that it’s entirely normal for people and small businesses without a dedicated legal department to be unfamiliar with the intricacies and terminology involved in the process of bankruptcy in the U.S. If you’re considering filing for bankruptcy in Mankato, MN, the attorneys at Behm Law Group, Ltd. are dedicated to providing information and legal assistance throughout the process.
If you’ve been wondering whether bankruptcy is the answer to your situation, you may have found yourself skimming online information about bankruptcy and encountered some terms that are unfamiliar to the jargon of everyday life. Some common terms used when discussing bankruptcy proceedings include:
Liens
Creditors can hold a lien over your property before and during your bankruptcy process. Essentially, a lien is a type of interest that secures your repayment of the debt you owe. Liens are most often used when speaking about mortgage debts and, in some cases, allow the lien holder to seize and sell your mortgaged property in the event of your inability to meet debt payments. During the bankruptcy process, there are options that allow you to forestall property seizure even if your creditors have a lien on your home or business.
Automatic Stay
During the filing process, U.S. Bankruptcy Courts can enforce an automatic stay on your creditors. In the event that an automatic stay is enacted, your creditors will be legally bound to halt their collection actions against you. When you petition for bankruptcy, your creditors are immediately put under automatic stay, protecting you against judicial proceedings, property seizure, lien enforcement, and the potential of a debt set-off.
Set-Off
In some bankruptcy cases, the debtor and the creditor owe money respectively to each other. With a checking account, for instance, a bank owes you the money in your checking account and must pay it to you on demand. Perhaps in you owe a debt to that same bank on a vehicle loan. If you are late paying your vehicle loan with that bank, the bank can offset what it owes you in your checking account against what you owe it on the vehicle loan. Instead of paying you what is in your checking account, the bank can offset what is in your checking account against what you owe it on the vehicle loan.
The many legal terms used in bankruptcy lingo are foreign to most people. We are here to help when it comes filing for bankruptcy in Mankato, MN. For more information, contact Behm Law Group, Ltd. at (507) 387-7200.
