How to Handle Becoming a Creditor Involved in a Chapter 7 Bankruptcy in Owatonna, MN

As a firm of bankruptcy attorneys, Behm Law Group, Ltd. is often most concerned with how a bankruptcy case affects and works out for the people and businesses filing it. However, we believe it’s important to provide information for everyone involved in the case if they’re unfamiliar with the process in any way.

 

There’s an unfortunate standard of thinking in bankruptcy that there are two sides of a battle with the creditors on one side and the filers on the other, while the bankruptcy trustee oversees the fight. The truth is that everyone is in it together, and a bankruptcy process is designed to provide as fair a treatment as possible for all those involved. If you’ve found yourself involved in a Chapter 7 bankruptcy in Owatonna, MN in any capacity, Behm Law Group, Ltd. can provide the advice and guidance you need.

 

Creditors of anyone who has filed for bankruptcy know that the process is a difficult one for each and every lender who is now facing the possibility that they won’t be repaid in full. In more cases than not, a bankruptcy has several creditors who don’t typically provide loans and may not know what to do when their lendee can’t repay a debt.

 

Suddenly a Creditor

The creditors that have the hardest time handling a bankruptcy case are those who’ve never dealt with this situation or given a loan before, such as:

  1. Friends and family who have given the bankruptcy filer a personal loan.
  2. Customers who have prepaid for a service from a business that is now going bankrupt.
  3. Customers who are financing a product (a car, for example) and the provider has gone bankrupt.
  4. Companies with services/products given to any party on Net 10, 15, 30, or 60 terms.

If you’re listed as a creditor in a bankruptcy case, there are certain actions you must take if you want debt repayment in any capacity. If you’ve received a “Notice of Bankruptcy Filing” and are listed as a creditor, you may have to file a proof of claim to avoid losing any chance of repayment. Filing a claim is simple, but requires specific documentation. To accurately file a claim, you must fill out U.S. Bankruptcy Court forms included in a Proof of Claim. While your repayment might not be in full, you’re entitled to some debt accommodation or repayment as a creditor.

 

If you’re caught up unexpectedly in a Chapter 7 bankruptcy in Owatonna, MN as a creditor or considering filing for bankruptcy as an individual or business, Behm Law Group, Ltd. can help. Contact us at (507) 387-7200 to learn more today.

 

 

Navigating through Bankruptcy Delays with the Help of a Bankruptcy Attorney in Marshall, MN

Bankruptcy can be a highly effective way to find the financial relief you need for long-term stability. It can also be one of the most emotionally difficult legal processes you ever go through. Because bankruptcy is such a legally-nuanced process, it can be one of the most trying court-administered procedures for individual consumers to face—especially if they choose to start a case without the help of a knowledgeable bankruptcy attorney. If you are struggling to meet debt payments, but are hesitating to take the leap into filing for bankruptcy for fear of the difficulty and emotional toll it may take, it may be time for you to seriously think about how a lawyer can help. Behm Law Group Ltd. provides the legal counsel, advice, and comprehensive guidance you need from a bankruptcy attorney in Marshall, MN, and the surrounding area if you plan to file.

Whether you choose (and qualify for) Chapter 7 liquidation bankruptcy or decide to restructure your debts into a three- to five-year repayment plan with Chapter 13 bankruptcy, Behm attorneys can navigate each step of the process as well as advise you on the best bankruptcy choice before you even have to make a decision. When you enter a bankruptcy case, lots of information is thrown your way. While this can be overwhelming, our bankruptcy attorneys are here to tell you what everything means and how to proceed.

One part of bankruptcy many past filers have found difficult to work through is the occasional delay the court may have to pause action on your case.

 

Delays

Bankruptcy case delays occur for a number of reasons, some of which may be your responsibility and some of which may not. While there are many types of delays to a case that can occur out of unusual circumstances, the most common types of delays include:

  1. Missing information: If you have information the court needs that is not a part of a standard petition, your case may be put on delay while you gather the necessary documents and during the court’s review of them.
  2. Creditors’ requests for information: If creditors request information about your case, the court may put a pause on the proceedings until the creditors are informed in full.
  3. Creditors’ claims: Sometimes, creditors may have grounds to claim an asset is their property or that their debt is non-dischargeable. This may occur for a wide range of reasons, but if it does, it’s incredibly important to have the protection and assistance of a bankruptcy attorney.
  4. Your income: If you have initially filed for Chapter 7 and your income changes before you start your case (with a new job, for example), the court may delay your case while it decides whether you qualify for a Chapter 13 bankruptcy.

 

If you are considering filing for bankruptcy, don’t underestimate the necessity of a bankruptcy attorney in Marshall, MN, and the surrounding area. Contact Behm Law Group Ltd. at (507) 387-7200 to learn more today.

Secured Tax Debt and Filing for Bankruptcy in Worthington, MN

Around this time of year, we all take a look at our past 12 months of finances. Filing taxes forces us to recount our incomes, debts, and overall monetary matters. On top of all our typical credit card debts, medical bills, car loans, and other debts, we can all be susceptible to tax debts.

 

If you’re struggling to pay tax debts in addition to meeting your other debt obligations, it might be time to look at debt relief options. When the point comes where your debts are severely affecting your quality of life, it’s important to take positive action to find balance for your finances. With the help of Behm Law Group, Ltd., you can gain the many advantages that debt relief through filing for bankruptcy in Worthington, MN provides.

 

Filing for bankruptcy can help you resolve many types of debt in two ways: discharge or reorganization. If you file for Chapter 7 bankruptcy, the majority of your debts will be discharged and you can claim exemption amounts to protect your property from liquidation. With a steadier income, you can choose to file for Chapter 13 bankruptcy and have your debts reorganized into a repayment plan limited to three to five years, and some of your debts will be discharged at 0-100%.

 

While many debts are discharged and reorganized in the process of bankruptcy, there are some priority debts that are exempt from all types of bankruptcy cases. For many, this includes tax debts. Some tax debts can be discharged in Chapter 7 bankruptcy or included in a repayment plan under Chapter 13.

 

Though some tax debts are not discharged through the bankruptcy process, there are other tax debts that can be treated in bankruptcy, including income tax debts secured by the government. Put simply, secured tax debts are debts that the IRS has placed a lien on your property to protect their right to repayment. This typically occurs when a debt has been left unpaid for an extended period or when the government foresees your inability to pay a tax debt.

 

Liens on tax debts turn into levies when collection action is taken. You can prevent collection action by filing for bankruptcy and getting an automatic stay placed on all creditor action – including the IRS. Additionally, you may be able to completely dissolve the lien and the debt in your bankruptcy case. In fact, most secured tax debts that qualify for the bankruptcy process can be resolved with the best outcome for you.

 

Understanding the difference between priority and non-priority tax debts is important for all bankruptcy cases that involve tax debts in any capacity. If you suspect or know for sure your tax debt is considered a secured debt by the IRS, contact Behm Law Group, Ltd. at (507) 387-7200 to learn more about its treatment in bankruptcy. If you’re ready to start filing for bankruptcy in Worthington, MN today, the advice and assistance of Behm attorneys is important to building a successful case.

Understanding the Pros and Cons When Filing for Bankruptcy in Luverne, MN

If you’re struggling with debt, you’re not alone. Many people you may see every day at work, on the street, or within your circle of friends may be working through financial difficulties just like you. Unfortunately, there’s so much social stigma around debt that many of us may feel shame and a need to hide our debts. While it’s true this may protect you from the judgment of others, it may also prevent you from facing your debts as a real issue. If debt is negatively affecting your life, you can benefit from taking direct action to resolve those financial problems. With the help of Behm Law Group, Ltd., you can achieve debt relief by filing for bankruptcy in Luverne, MN.

 

Because of the negative images the word debt brings to mind, it’s not unexpected that bankruptcy also receives its own kinds of undesirable judgment. Whatever images bankruptcy has socially, in reality it’s a highly effective way to recover from debt with what is essentially a government blessing. If you’re struggling with some of the most common debts in the U.S. (i.e. credit card debts, medical bills, mortgages, and car loans), you can benefit from filing for bankruptcy.

 

While bankruptcy is often a remedy for debts, it comes with its own negative effects like many other legal processes. The pros often outweigh the cons, but occasionally, bankruptcy might not be right for you. Understanding the full weight of what bankruptcy means is important for anyone who is struggling with debt.

 

Pros

 

  1. You receive an automatic stay that prevents your creditors from collecting debts as soon as you file for bankruptcy.
  2. Your unsecured debts will be discharged in full in a Chapter 7 bankruptcy, and discharged 0-100% in a Chapter 13 reorganization bankruptcy.
  3. Your secured debts will be discharged in a Chapter 7 bankruptcy, and sometimes you’ll be able to keep the properties serving as collateral for those debts by engaging in post-bankruptcy agreements with the creditors that have more favorable terms.
  4. Your secured debts will be reorganized into a Chapter 13 repayment plan that fits your budget and limits the repayment period to three to five years.
  5. Overall, you receive debt forgiveness and are offered a way to work through debt issues with court administered remedies.

 

Cons

 

  1. Your credit will drop, and a bankruptcy remains on your public record for up to five years.
  2. Some debts are more difficult to discharge during the bankruptcy process, including two of the most common debts in America: student loans and tax debts.  These debts are not discharged after the ordinary bankruptcy process has concluded.  In order to try and get such debts discharged, one must commence an adversary proceeding and sue the creditors and such proceedings can be both expensive and protracted.
  3. You will have to pay a bankruptcy filing fee to the bankruptcy court, and to truly file a successful case, you will have to pay attorney’s fees to a bankruptcy attorney.

 

Though there can be downsides to filing for bankruptcy, many who file experience positive benefits that far outweigh the negatives. If you’re considering filing for bankruptcy in Luverne, MN, contact Behm Law Group, Ltd. today for more information about how it will affect you as an individual or business.

 

Handling Lawsuit Judgements When Discharging Debts Through Chapter 7 Bankruptcy in Pipestone, MN

There are many reasons to file for bankruptcy—from resolving credit card debts to reorganizing a mortgage into a repayment plan. And bankruptcy can be a highly effective way to fix financial problems that would otherwise fester and grow worse. Because every part of the bankruptcy process is handled through the U.S. Bankruptcy Court, filing for bankruptcy is a protected legal process and one of the most effective immediate and long-term solutions for financial difficulties. If you are struggling with debt in your life as an individual or a business, filing for bankruptcy can help. For those with a low income or a failing business, Behm Law Group Ltd. can work with you to build and file a successful case for Chapter 7 bankruptcy in Pipestone, MN.

 

Chapter 7 bankruptcy is a liquidation process for individual consumers or businesses. In exchange for debt discharge, Chapter 7 trustees can sometimes sell certain assets you own and return the value gained to your creditors. This process may seem like a drastic measure, but the court protects you from losing any properties that you need for day-to-day life (home, car, etc.) with exemption allowances. Plus, your debts connected to unsecured loans will also be discharged (credit card debt, hospital bills, etc.).

 

In addition to debt recovery, filing for bankruptcy provides several other financial and legal remedies. One more unusual legal issue that can be resolved through bankruptcy is any lawsuit your creditors file because of your lack of debt payments. These suits become judgement lawsuits in a bankruptcy case, and they can be treated in one of two ways.

 

  1. Your lawsuit progress is halted as soon as you file for bankruptcy and is eventually dissolved in your Chapter 7 case. This occurs if your lawsuit is connected to a low-impact debt. For example, credit card debts, car loans, medical bills (with an exception addressed later), personal loans, mortgages, and more are all low-impact debts when they are put into the light of a pending lawsuit and bankruptcy case. When you file for Chapter 7 bankruptcy, these lawsuits are halted and you will not be held responsible for any costs.
  2. Your lawsuit progress is halted as soon as you file for bankruptcy, but is deemed a high-impact case and is not dissolved in your Chapter 7 case. High-impact cases typically involve actions you made that directly affected another person’s health, life, or well-being. For example, common high-impact suits connected to a debt you owe include those involving your payment of alimony or child support, any fraud or criminal activity, your drunk or reckless driving that caused injury, or other causes of injury to another person (two reasons your medical bill-related debts might be non-dischargeable). These cases can also be connected to priority debts like tax debts.

 

If you are considering filing for Chapter 7 bankruptcy in Pipestone, MN, and have a lawsuit connected to a debt, contact Behm Law Group Ltd. at (507) 387-7200 to learn more.

 

Living with Success on a Repayment Plan Budget after Chapter 13 Bankruptcy in Mankato, MN

March is the time when determination for New Year’s resolutions start to waver. If you’ve made your New Year’s resolution based on your budget, that wavering can significantly damage your financial well-being. Those who have filed for Chapter 13 bankruptcy in the past know they don’t have any other option than to adhere to the budget outlined in their repayment plan. If you’re struggling with your budget, filing for Chapter 13 might mean long-term debt relief and better spending practices. With the help of Behm Law Group Ltd., you can file for Chapter 13 bankruptcy in Mankato, MN, and structure a repayment plan that will set you up for success.

Chapter 13 reorganizes your debts into a three- to five-year repayment plan. This is a great option for those with a steady income who want to receive court-approved debt relief with a structured budget for the repayment plan period. With a Chapter 13 bankruptcy, filers will have to repay their priority debts, like amounts owed for taxes, criminal fines, child support and alimony, in full, but most can receive a debt reduction up to 100% on unsecured debts.  Even secured debts, like vehicle loans and mortgage delinquencies, can be paid under different and more favorable terms.

 

After you file, you have the opportunity to restructure your debts into a plan proposal. The plan lasts three or five years depending on your income. When the court approves your plan, you will make monthly payments to a chapter 13 bankruptcy trustee.

 

Although the concept of a Chapter 13 repayment plan is highly attractive, some might find it difficult to adhere to that plan, especially if a wavering budget sent them into bankruptcy in the first place. Sticking to your repayment plan means you have to take some things into consideration:

 

  1. Your plan is structured around your income, so any income changes (a new job, for example) must be reported immediately to your bankruptcy trustee or your plan may be dismissed for lack of good faith.
  2. Because your plan is structured around your income, it also takes in the fact that you have monthly expenses for food, travel, utilities, rent, and more. The money you will have to spend to live each month is accounted for in your plan.
  3. While your necessary spending is taken into account in your repayment plan, your unnecessary spending is not. All of your disposable income (any money left over after reasonable and necessary monthly expenses) will have to be paid to the chapter 13 trustee for your unsecured creditors involved in your repayment plan.  You and your lawyer can work with the chapter 13 trustee on your budget to determine your reasonable and necessary expenses.  While the chapter 13 trustee is a fiduciary for your creditors, the trustee is not intransigent or inflexible in this process.
  4. Sudden income sources like tax refunds, bonuses and commissions may or may not have to be paid to the chapter 13 trustee and into your repayment plan. This is something that can be negotiated at the time it occurs.

 

It is completely possible to live month to month during a Chapter 13 repayment period. In fact, the entire goal of reorganization bankruptcy is to allow filers to live their lives as normally as possible while they repay debt. If you are considering filing for Chapter 13 bankruptcy in Mankato, MN, and are concerned about sticking to a tight budget, contact Behm Law Group Ltd. at (507) 387-7200 for more information today.

What Happens to Your Business When Filing Bankruptcy in Windom, MN?

Running a small business is one of the most difficult ways to make a living, no matter where you’re located. Startups close down even before they gain momentum, family-owned businesses go under, partnerships collapse, and countless businesses of all kinds file for bankruptcy as a result of a wide range of factors.

Anyone who owns a business knows these difficulties for themselves, and many business owners view the last gasp of failure as a bankruptcy filing. The fact is, however, that bankruptcy may be a viable solution to keeping your business running successfully in the long-term. Behm Law Group, Ltd. offers legal counsel and protection for businesses filing bankruptcy in Windom, MN, and we can guide you through the process of saving your business for the long run.

The type of bankruptcy that most business owners think of when they view it as a “failure” resulting in closing up shop is Chapter 7 liquidation bankruptcy. While it’s true that the majority of Chapter 7 business bankruptcies will end with a closed down business, there are exceptions and other types of bankruptcy that can support debt relief without forcing a shutdown.

 

Chapter 13 vs. Chapter 7

If you want to keep your business in operation with a goal of long-term debt relief, then filing for Chapter 13 or Chapter 11 bankruptcy is most likely the best option. Both of these types of bankruptcy work to reorganize your debts into a repayment plan that fits your business budget. Businesses that are not sole proprietorships (LLCs, partnerships, or corporations) are generally not appropriately addressed in Chapter 13 but for those businesses Chapter 11 has its own advantages. For sole proprietorships, Chapter 13 bankruptcy is a better option than Chapter 11 because you can include both your business debts and personal debts in the repayment plan. Additionally, in a Chapter 13 repayment plan you have the option to protect your business property with exemptions, reduce overall debt amounts for unsecured nonpriority debts, and structure your debts overall into a court-approved repayment plan.

Even though most Chapter 7 business bankruptcies result in a closing of that operation, there are times when that shutdown doesn’t occur in a liquidation bankruptcy. Specifically, sole proprietorship businesses can continue to operate their business after a Chapter 7 filing, and like with a Chapter 13 plan, filers can include their personal and business debts in the liquidation process. The types of businesses that continue to operate most successfully after a Chapter 7 liquidation are those with few assets. For example, personal trainers, therapists, consultants, freelancers, and other similar service providers can continue to operate successfully in the face of asset liquidation.

If you’re a business owner struggling to repay debts, filing for bankruptcy can help you continue to operate your business and gain long-term debt relief. To learn more about filing bankruptcy in Windom, MN as a business owner or individual, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Benefits of Choosing Bankruptcy over Debt Adjustment in Waseca, MN

There are many ways to incur debt, from credit cards to car loans. If you are struggling to make ends meet each month because of your debts, don’t despair. There are several ways you can get debt relief, whether that means you work out an agreement with your creditors, or take legal action and file for bankruptcy. Despite the negative image bankruptcy tends to receive, the process is one of the most effective ways to get debt relief in the long term. In fact, bankruptcy can resolve your debts without the “band-aid effect” other kinds of debt relief result in. With the help of Behm Law Group Ltd., you can rid yourself of unmanageable debts by filing for bankruptcy and steering clear of the negative impacts of debt consolidation, debt settlement, and debt adjustment in Waseca, MN.

 

Almost all non-bankruptcy forms of debt relief (with the exception of debt forgiveness) create similar situations for the debtor and treat debt in similar ways. Debt adjustment, settlement, and consolidation are three common methods of debt relief outside of bankruptcy. However, they may only give you temporary relief with the added damage of more debt in the long run.

 

 

How Common Debt Relief Methods Work

 

  • Debt adjustment is an agreement you can work out with your creditor to lower your monthly payment amount, allowing you to pay that debt off over a longer time period. While this means you’ll have to pay less each month, it also means you’ll end up paying more to your creditor overall because of the added interest.
  • Debt settlement is another agreement you can make with your creditor and a debt settlement company. In this case, you and your creditor agree on a reduced debt amount and you begin making payments to the settlement company. However, the company can withhold your payments from your creditor, making your credit decrease significantly when your financial records show that you’ve defaulted or made late payments on your debt. In addition, you typically will get taxed on any debt that may be forgiven or written off.
  • Debt consolidation agreements between you and a third party creditor work to take out a loan from that creditor to repay all your other debts, effectively consolidating all your debts into one. These debts often have interest rates that increase over time and force you to be in debt longer.

 

 

Why Bankruptcy Is Better

Debt relief options like debt adjustment, settlement, and consolidation provide quick fixes without addressing long-term solutions. They will most likely put you into a situation where you pay more in interest for a much longer period of time. Choosing bankruptcy instead gives you a chance to resolve your debts under the administration of a court-protected process as well as the added protection of a bankruptcy attorney. While it will cause your credit to drop (just like most other debt relief processes), bankruptcy will effectively discharge or restructure your debts into a reduced plan spanning over a predetermined payment period.

 

 

To learn more about filing for bankruptcy over debt adjustment in Waseca, MN, or other forms of debt relief, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

 

Understanding More about Debt Cramdown with Chapter 13 Bankruptcy in Fairmont, MN

A common misconception about bankruptcy is that filers will lose all their property in the process. This could not be further from the truth. While there are some  Chapter 7 bankruptcy cases in which assets are liquidated, there are many more occasions when filers can claim exemptions to protect their property from liquidation. Additionally, the process of Chapter 13 bankruptcy works to restructure filers’ debts into a repayment plan suited to their income without bringing liquidation into question. If you are considering filing for Chapter 13 bankruptcy in Fairmont, MN, Behm Law Group, Ltd. offers counsel and protection from start to finish to help you get the most out of your case.

 

One aspect our bankruptcy attorneys work to promote in certain cases is helping filers successfully petition for debt cramdown. When you owe more debt on a property than the value of that property, you are considered to be “upside down” on that debt. If this is the case, you are eligible for debt cramdown in certain circumstances.

 

How It Works

 

Cramdown is a process available for several types of secured debts, but because of the fast depreciation of vehicles, cramdowns are applied mostly to auto loans. If your debt is upside down, you can use a cramdown to reduce the debt amount. For example: You took out an auto loan of $15,000 to finance a car of the same value, and you repaid $3,000 of that loan over the course of three years. After those three years passed, your car’s value decreased to $10,000. However, you still owe $12,000 on your auto loan.

 

When you file for Chapter 13 bankruptcy and request a cramdown, the repayment plan will include only the current value of your car as secured debt. In this example, you would have the $10,000 value of your car loan rolled into your plan as secured debt, while the remaining $2,000 you would pay outside of bankruptcy is rolled into your plan as unsecured debt. This cramdown process may not eliminate all of your debt, but because Chapter 13 plans don’t often require you to repay unsecured debt in full, you can significantly decrease the debt you pay in the end.

 

Additionally, most cramdowns allow you to reduce your interest rates on the remainder of the secured debt included in your plan. Auto loans that qualify for cramdown must also have been taken out more than 910 days before you file for bankruptcy.

 Find Professional Help when Filing for Chapter 13 Bankruptcy

If you’re considering filing for Chapter 13 bankruptcy in Fairmont, MN, and think you may be eligible for a cramdown, Behm Law Group Ltd. can offer you advice and assistance in the process. Contact us at (507) 387-7200 to learn more or to get started on your petition today.

How to Use Your Tax Refund While Filing for Bankruptcy in Redwood Falls, MN

As tax season approaches, everyone filing has to take time to look at their finances in more detail than usual. For many individuals and businesses, a financial overview may show just how much they are struggling with the weight of debt. For those with too much debt than they know what to do with, tax season may be the perfect time to consider a long-term solution. At Behm Law Group, Ltd., we’ve found that there are many cases where tax season was the most effective time for those considering filing for bankruptcy in Redwood Falls, MN to take the next step forward.

 

Whether you have credit card debt, mortgages, or most other forms of debt, filing for bankruptcy can act as a recovery system that helps you resolve those debts under government protection. For most with a steady income that overbalances their debt-to-income ratio, the process of Chapter 13 bankruptcy is the most effective as it restructures your debts into a three- to five-year repayment plan suited to your own financial situation.

 

Because of the demand that a Chapter 13 plan puts on all your disposable income, you will most likely have to forfeit some of your yearly tax refunds you receive to your trustee for the repayment of your unsecured debts. While your trustee may allot some of that refund for you to spend or save, you will not be able to retain all of it.  To get the most use out of your tax refund if you plan to file for bankruptcy, you should plan to use it before you file your petition.

 

If you use your tax refund prior to filing for bankruptcy, you will have to spend it all or you may have to surrender some of your tax refund to the trustee. To get full use of your refund without being at fault when the time comes to file, you should expect to only use the refund for:

 

  • food and prescription medicine
  • mortgage or rent
  • home maintenance and repairs
  • utilities
  • education costs
  • clothing
  • insurance
  • medical or dental costs
  • car payments, repairs, and maintenance
  • homeowners association fees

 

The best use of your tax refund if you plan on filing for bankruptcy is for it to go to these expenses. When you use your refund for these purposes, it’s also critical to keep accurate and legitimate records of all your spending. With the help of a Behm attorney, you can record and collect necessary information and documents that will fully demonstrate your use of your tax refund for these expenses rather than other debt payments. Your trustee will most likely require a tax return for the year prior to and the year you file for bankruptcy on top of the additional bankruptcy petition documents.

 Find Professional Help When Filing for Bankruptcy

To learn more about how to use your tax refund before filing for bankruptcy in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.