Good Faith and Debt Repayment Plans With Chapter 13 Bankruptcy in St. Peter, MN

Your disposable income plays a large part in determining your path when it comes to filing for bankruptcy as an individual. This income is taken into consideration with your debts and the value of your assets and properties. The result decides whether you qualify for Chapter 7 or Chapter 13 bankruptcy. If your results don’t pass the Means Test, you may opt to work with a bankruptcy trustee to build a repayment plan and file for Chapter 13 bankruptcy. If you’re considering filing for Chapter 13 bankruptcy in St. Peter, MN, Behm Law Group, Ltd.  can provide legal assistance with your repayment plan and your petition.

A debt repayment plan with Chapter 13 bankruptcy is designed to reorganize your standing debts while keeping things balanced and fair between you and your creditors. You can’t propose a repayment plan to your trustee and the courts, however, if you don’t prove your good faith in repaying debts in full within a five-year period.

Good Faith:

Filing your petition for Chapter 13 bankruptcy covers most of the required information, forms, and schedules for the process, but you must also provide your proposal for a repayment plan. The outline of your plan proposal describes your monthly payments towards priority debts, secured debts, and unsecured debts, and the term in which the selected amount of those debts will be repaid. This is where your “good faith” comes in.

In order for your petition to be fully-approved by U.S. Bankruptcy Courts, your bankruptcy trustee must be able to approve your good faith in using all your disposable income to meet your monthly repayment requirements.

Lacking Good Faith:

There are several reasons why your bankruptcy trustee may determine that you’re not in good faith for your repayment plan. Most of the time, if you’re lacking good faith, there will be some inconsistencies with your income, deductions, or petition. For example, if your current monthly income is subject to change during your repayment period and you do not notify the courts, your plan may be denied. If you’re found lacking in good faith, you may respond with an explanation, and your trustee may reexamine your standing.

Behm Law Group, Ltd. can help you navigate the process of determining a repayment plan and holding a good faith standing when you file your petition for Chapter 13 bankruptcy in St. Peter, MN. If you’re considering bankruptcy contact us at (507) 387-7200 today.

Claiming Excessive Exemptions and What You Can Buy Before Filing for Bankruptcy in New Ulm, MN

Making prudent use of the financial help that filing for Chapter 7 bankruptcy can provide is one of the smartest things you can do if you’re overwhelmed by accumulated debts and financial obligations. Chapter 7 was designed to help people recover from crippling debt and get back on their feet financially. The U.S. Bankruptcy Courts have to treat each case with fairness to debtors and creditors alike, so Chapter 7 works as a balanced process. Behm Law Group, Ltd. helps filers with legal advice and assistance throughout the process of filing for Chapter 7 bankruptcy in New Ulm, MN.

To keep things balanced between creditors and debtors, Chapter 7 bankruptcy works to discharge your debts while simultaneously liquidating your nonexempt assets, if any, to repay your creditors.  Most cases, however, are “no asset” cases which means that all of one’s assets are exempt and creditors don’t get paid anything.  It’s your job as a debtor to claim your own exemptions to prevent assets from being unnecessarily liquidated. The flipside to claiming exemptions, however, is that it’s possible to claim too many for your case.

Excessive Exemption Planning

Generally speaking, exemption planning—taking assets you may not be able to keep in bankruptcy and liquidating them and using the money to pay down your mortgage or purchase assets that you would be able to keep so you can maximize your exemptions—can be a tricky process. In fact, it can be considered fraudulent behavior and can be a basis for the dismissal of a bankruptcy case or a denial of all and any debt relief. That being said, there are times when exemption planning is possible when it comes to making purchases before filing for bankruptcy.

Purchasing Before Bankruptcy

Many purchases you make on credit before filing for bankruptcy can be construed as fraudulent use of credit and can render the subject credit debt non-dischargeable. For example, any debts you gather within 90 days before filing for bankruptcy that exceed $675 in total can be considered non-dischargeable. This applies to “luxury goods,” a term that covers most purchases that are not necessary to your household like televisions, furniture, trips to Hawaii or Europe. Purchases that you are allowed to acquire credit debt for within the 90-day period before filing for bankruptcy includes necessities like food, gas, rent, and auto care. These debts may still be petitioned for discharge.

Your spending during the 90-day period prior to filing for bankruptcy is flexible. If you make some bad choices, however, by “maxing out” your credit before filing for bankruptcy, many of your debts may not be discharged, and your case may even be dismissed. Behm Law Group, Ltd. can help you navigate exemption planning and purchasing before you file for bankruptcy in New Ulm, MN. For more information, contact us today at (507) 387-7200.

Converting Assets and Exemption Planning When Filing for Bankruptcy in Jackson, MN

If you plan to file for Chapter 7 bankruptcy, having a bankruptcy lawyer is essential. In some cases, a person may have assets that he or she would not be able to retain either because the value of the assets are too high or there are no applicable bankruptcy exemptions to protect the assets.  Before filing for bankruptcy relief, you generally are allowed to rearrange your finances and property in a way that’s legal and allows you to maximize your bankruptcy exemptions to benefit you as much as possible. The more exemptions you can claim, the more of your assets you can protect from the liquidation process involved in a Chapter 7 case. The bankruptcy attorneys at Behm Law Group, Ltd. can assist you during this time and throughout the process of filing for Chapter 7 bankruptcy in Jackson, MN.

It’s possible for you to work with your attorney and convert many properties or cash itself into exempt assets without crossing the line into excessive exemption planning or fraud. The help of a bankruptcy attorney is crucial.  You first must determine the values of your assets and whether there are exemptions available that will protect them.  Also, you must determine if the value of a particular asset exceeds the allowance of the particular exemption with which you intend to protect it.

Nonexempt vs. Exempt

Generally speaking, if an asset is determined to be a basic need to the filer, it’s considered an exempt asset. U.S. Bankruptcy Courts do not want to strip filers of all their property, even if the value of those assets could be used to repay creditors for debts that are dischargeable. Homes, means of transportation, wages, and other important properties are categorized as exempt in the majority of Chapter 7 cases.

Nonexempt properties, however, are often involved in a Chapter 7 case. Many assets are considered nonexempt from the liquidation process because their value is needed for repayment in order to keep the process balanced between debtors and creditors.

Converting Assets

Spending your nonexempt assets (i.e., the money in your bank accounts) is one lawful way to make use of them for your benefit, but keep in mind you should only spend them on necessary items like food, gas, repairs to your vehicle.  You must not pay debts to friends or relatives or make gifts to friends or relatives or put assets into someone else’s name.  Also, you must remember that you will be asked by your lawyer and by the bankruptcy trustee administering your case for a thorough accounting concerning how you spent any non-exempt money and how you disposed of any non-exempt assets.  The Bankruptcy Code requires you to do this and you could be denied bankruptcy relief if you don’t do it.   Spending that money on luxury items such as expensive trips or fancy furniture or big screen televisions could also be considered excessive and could be scrutinized. Chapter 7 code also allows you to sell nonexempt properties and use the money gained to buy exempt assets (for example, selling a yacht and using that money to buy a household vehicle).

Unfortunately, it can be easy to cross the line from legitimate exemption planning and engage in conduct can be viewed as fraudulent or inappropriate. The help of our bankruptcy attorneys prior to filing for Chapter 7 bankruptcy in Jackson, MN, is the key to doing exemption planning right. For more information, contact Behm Law Group, Ltd. today at (507) 387-7200.

Understanding Debt Repayment In Chapter 13 Bankruptcy in Mankato, MN

Most individuals considering filing for bankruptcy have two main options: filing for Chapter 7 bankruptcy or filing for Chapter 13 bankruptcy. In the case of Chapter 7, a filer has qualified for this type of bankruptcy after passing the Means Test, determining that their debts and financial obligations outweigh their disposable income and estate value. The process of Chapter 7 liquidates assets, uses asset value to repay creditors, and discharges debts. However, even if a high income prevents qualification for Chapter 7, accumulated debts can cripple finances. If you cannot file for Chapter 7, you may choose debt reorganization with Chapter 13 bankruptcy. For any type of petition, Behm Law Group, Ltd. can help you through the process of filing for bankruptcy in Mankato, MN.

Chapter 13 bankruptcy is designed to take your monthly reasonable and necessary living expenses and weigh them against your monthly “net” take home income and the value of your assets. This type of bankruptcy reorganizes your debt repayment, effectively restructuring the process by which the creditors are paid to the best possible advantage to you.  Generally, unsecured creditors (credit card debts, medical debts, etc.) and priority creditors (tax debts, child support arrearages, etc.), receive no interest, no late fees, or any other default fees through the Chapter 13 process.

Because Chapter 13 cases vary so widely, it can be difficult for prospective bankruptcy candidates to apply the basic description of debt reorganization onto their own situation. Though the provisions of a Chapter 13 repayment plan may change from case to case, there are some constants across the board.

Amount to Pay

With most debts, a Chapter 13 repayment plan doesn’t change the amount you have to pay each particular creditor.  Rather, you make one monthly payment to a Chapter 13 trustee and the trustee divides that payment among your creditors pursuant to the provisions of your Chapter 13 plan.  The debts you will have to pay in full can include:

  1. Priority debts, such as alimony, child support, tax debts, and wages owed to employees.
  2. Mortgage delinquencies, if you plan on keeping your home throughout the bankruptcy process.

Other debts, however, may only be partially paid. This portion can be between 0% to 100% of what you originally owed the creditors. What you will have to pay is determined by your nonexempt estate value, your disposable income available to repay debt, and the period of your repayment plan.

Repayment Plan Length

Simply put, your income level directly determines the period of your repayment plan. There are two basic options when it comes to balancing your income with your debt repayment.

  1. If your monthly income is higher than the monthly median income in Minnesota for a household of similar size to your own, you will be required to file a five-year repayment plan.
  2. If your monthly income is lower than the monthly median income in Minnesota for a household of a similar size to your own, you may opt for either a three-year plan or a five-year plan.

Chapter 13 bankruptcy may seem more complicated than Chapter 7 bankruptcy, but for many, it’s exactly the right choice for financial recovery. For more information about filing for bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200.

Protecting Your Money and How Filing for Chapter 7 Bankruptcy in Owatonna, MN, Affects Your Bank Accounts

If you’re struggling financially, your debts and obligations may seem looming and unmanageable, but for many, the idea of bankruptcy is even more alarming. At Behm Law Group, Ltd., we find that many of our clients have had no reason to become familiar with the process of bankruptcy in the past and have unwarranted fears of how bankruptcy may impact them. If you’re balking over filing for bankruptcy because of an apprehension of negative side effects, let us help you. Bankruptcy is designed to help debtors regain their financial footing, and with Chapter 7 bankruptcy in Owatonna, MN, you can get the fresh start you need.

Many individuals hesitating at the thought of bankruptcy have worries about how the process will impact their credit and properties. For example, the fear of how your bank account will be handled is a common source of anxiety during bankruptcy.

These fears, however, are unnecessary nearly 100% of the time. In fact, for the vast majority of individuals filing for bankruptcy, a case in itself will not affect your bank accounts in any way. Checking, savings, and other types of bank accounts are left untouched in the typical individual consumer Chapter 7 bankruptcy case.

When Your Bank Account is Impacted

Although most of the time an individual filer’s bank accounts will not be touched during a bankruptcy case, there are a few unusual circumstances that may affect the status of an account or the value within. These circumstances include:

  • If a debtor has a total balance across all accounts that is greater than the exemption allowances they are allowed with which to protect property
  • If a debtor owes funds to the bank or credit union where their accounts are held
  • If a debtor owns accounts with banks or organizations that freeze accounts during a Chapter 7 case (e.g. Wells Fargo or Union Bank or Bank of the West)

Except for these uncommon circumstances, a Chapter 7 bankruptcy case does not generally impact bank accounts.

Protection with Exemptions

When filing for Chapter 7 bankruptcy in Minnesota, individual filers may choose to use state exemptions or federal exemptions. In the case where your bank account funds are not exempt from the process of liquidation, those funds are considered assets and are surrendered to the bankruptcy trustee. If your funds can be protected by an exemption, however, they will remain untouched during the bankruptcy case.

Exemptions that protect your bank account funds vary from case to case depending on how you choose to use certain transferable exemptions, such as the federal wildcard exemption.

The fear of losing the money in your bank accounts should not prevent you from filing for Chapter 7 bankruptcy in Owatonna, MN. For more information about how your bank accounts are impacted during the bankruptcy process and for bankruptcy consultations, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Understanding Priority Debts When Filing for Chapter 7 Bankruptcy in Marshall, MN

Those who are considering filing for bankruptcy most likely have more than one debt to tackle among their financial obligations. In fact, virtually every bankruptcy filer faces several debts accumulated over years. From mortgages to credit card debt, filers often have a wide range of debts to repay. If these filers pass the Minnesota Means Test, they qualify for Chapter 7 bankruptcy, which allows the majority of their debts to be discharged. If you qualify for Chapter 7 bankruptcy in Marshall, MN, Behm Law Group, Ltd. can help you throughout the process of petitioning and filing with professional legal advice and assistance.

When it comes to discharging your debts in Chapter 7 bankruptcy, the process is determined by your exemptions, your qualifying debts, and a number of other factors regarding your household status. In a case where the bankruptcy trustee is able to collect money to pay some dividend to your creditors, the question remains of how the money will be allocated. First and foremost, any financial obligations falling into the category of “priority debt” will be paid something before any other debts such as credit card debts, medical debts, etc. receive anything.   11 U.S.C. §507 sets for the priority of how debts are to be paid in bankruptcy cases.

Priority debts will be paid first.  If there is any money left after those debts are paid, then other creditors with lower priority, such as credit card debts or medical debts, will receive a dividend from the trustee. Unfortunately for the filer, most priority debts are not subject to discharge and must be fully repaid.

Priority Debts: Debts involved in individual consumer bankruptcy cases are considered priority if they are categorized as the following:

  1. Deposits up to $2,850 for property purchases, leases, or rentals
  2. Deposits up to $2,850 for services pertaining to household, family, or personal use that were not provided
  3. Alimony, child support, or other familial maintenance and obligations
  4. Wages, salaries, commissions, or other compensations owed to employees up to $12,850 per person within 180 days of filing for Chapter 7 bankruptcy
  5. Debts owed to farmers and fishermen up to $6,325 each
  6. Income taxes owed within three years before filing for bankruptcy
  7. Taxes withheld from employees but not paid to the taxing authorities by employers
  8. Any customs, duties, and penalties due to the federal, state, and local governments
  9. Personal injury or death claims against you from driving under the influence

With the help of our experienced bankruptcy attorneys, you can navigate your own case when it comes to priority debt, asset liquidation, and debt discharge. For more information about filing for Chapter 7 bankruptcy in Marshall, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Understanding Non-Dischargeability Complaints When Filing for Chapter 7 Bankruptcy in Luverne, MN

Filing for bankruptcy throws one’s debts into question in front of a Bankruptcy Court, one’s attorney, and one’s creditors. If one has passed the Means Test and is qualified to move forward with Chapter 7 bankruptcy, the dischargeability of one’s debts is generally not in dispute. Throughout the process of bankruptcy, however, questions and concerns are can arise from all parties involved. Behm Law Group, Ltd. provides legal advice and assistance to those filing for Chapter 7 bankruptcy in Luverne, MN.

In some chapter 7 bankruptcy cases, non-exempt assets (assets one is not able to protect with one’s bankruptcy exemptions) are liquidated and the sale proceeds are used to pay some dividend to one’s creditors.  The good news is that, in most cases, all of one’s debts are discharged, leaving one permanently free of many crushing financial obligations. However, sometimes creditors may have a legal basis to file a non-dischargeability complaint against a debtor under 11 U.S.C. §523.  This means that sometimes a creditor has a good reason to ask a bankruptcy court not to grant a debtor debt relief as to a particular debt.

Non-Dischargeability Complaints

A complaint filed about the legitimacy of the discharge of one’s debt is technically a lawsuit and it is labeled an “adversary proceeding”. If a creditor files a non-dischargeability compliant, one will be given a summons and the process will take place partially by mail and partially in the bankruptcy court. The complaint is served on the defendant and the defendant has the right to respond in his or her own defense (and with the help of an attorney).  Some examples of grounds justifying a non-dischargeability complaint are:  1.) One has incurred significant debt on a credit card within a short time before filing a bankruptcy; 2.) One has misrepresented one’s financial condition, either verbally or in writing, to a lender and the lender has made a loan relying on the misrepresentations; 3.) One has willfully and intentionally caused financial injury or physical injury to someone.

If a creditor has filed the complaint without proper legal standing, or if the complaint is unclear to one as a debtor, one may file a motion to dismiss the claim or force the creditor to provide a complaint with more specificity. Complaints filed against fraudulently incurred debts or other scenarios, as listed above, must be identified correctly and clearly or one may file a motion to dismiss the complaint.

Responding to a clearly defined complaint against the dischargeability of a debt requires an answer to each paragraph of the compliant provided by the creditor. The help of a bankruptcy attorney during this response time is crucial for one to have optimal access to legal information and to assert one’s rights as a defendant. If one does not respond to the complaint, the case will proceed by default, and the debt in question will be excepted from discharge.

For more information about a non-dischargeability complaint and why it’s important to take advantage of the help an attorney can provide during this time, contact Behm Law Group, Ltd. at (507) 387-7200. You can also count on us for advice and assistance if you are considering filing for Chapter 13 bankruptcy or Chapter 7 bankruptcy in Luverne, MN.

Debt Collector Laws and Handling a Violation With Your Bankruptcy Attorney in Pipestone, MN

When you reach the financial point where filing for bankruptcy becomes a very real option, your relationships with debt collectors often start to change. When your creditors and debt collectors handle your missed payments on file, they start getting more aggressive.  However, for debt collectors in particular, there are laws to prevent harassment, illegal contact, and a number of other unpleasant activities. These laws are designed to protect you, and with the help of Behm Law Group, Ltd. and our experienced bankruptcy attorneys in Pipestone, MN, you can also be protected during the process of filing for bankruptcy.

While your creditors are usually not subject to these laws, debt collectors from any agency are legally bound to collect under the Fair Debt Collections Practices Act.

Fair Debt Collections Practices Act (FDCPA)

Debt collectors are any entities whose professional purpose is to collect debts on behalf of a creditor that a debtor owes to that creditor. They are third parties involved in collecting debt for a creditor. A creditor, on the other hand, is an entity collecting debts directly from those who owe it. The FDCPA prevents debt collectors from illegal action against the debtor.

Though the fair collections laws apply primarily to debt collectors, there are times when they also apply to creditors. This can happen when creditors are debt buyers, when they use fake names to collect, or when they use flat rate collection companies.

Illegal Collections Practices

The FDCPA makes the following illegal for debt collectors:

  1. Calling if you have revealed that you are represented by an attorney
  2. Calling you at a place you have stated is inconvenient
  3. Calling outside of the hours of 8:00 AM and 9:00 PM or calling at any other times you have stated as inconvenient
  4. Not identifying themselves when they call or attempting to mislead you about their identity
  5. Using predial or autodial tactics to contact you (this also applies to text messages)
  6. Revealing your debt situations to others
  7. Contacting your family, friends, or acquaintances about your debt
  8. Mailing you debt collections papers with no envelope (i.e. postcards)
  9. Leaving you voicemails talking about your debt
  10. Contacting you after you request for them to stop
  11. Not informing credit recording agencies when you dispute a debt
  12. Not informing you of your right to request a debt collector to verify the legitimacy of the debt in question
  13. Threatening or harassing you in any other way
  14. Threatening you with going to jail

If you are overwhelmed by debt, you may want to consider the actions of your debt collectors and creditors. In many cases, those struggling with financial difficulties should also consider their options with bankruptcy. Behm Law Group, Ltd. can provide the assistance you need throughout the process of filing for bankruptcy with our bankruptcy attorneys in Pipestone, MN. For more information, contact us at (507) 387-7200 today.

Spouse Debts, Incomes, and Assets Under Common Law and Filing for Joint Bankruptcy in Windom, MN Bankruptcy in Windom, MN

Bankruptcy is an option for any U.S. citizen or business struggling financially. Because the U.S. Bankruptcy Code is a device meant to help entities out of major debt and get back on their feet, it’s a process that’s adaptable to many situations. Expanding a household inevitably increases financial obligations, and many bankruptcy cases involve the assets, debts, and income between spouses. If you and your spouse are considering filing for bankruptcy in Windom, MN, Behm Law Group, Ltd. can help you throughout the process with expert legal advice and assistance.

Filing for bankruptcy as a household can be the best way to handle your debts alongside your spouse’s debts. Because Minnesota is a Common Law state, how your debts, assets, and incomes are handled in a bankruptcy petition will depend on whether they are considered joint or separate under the U.S. Bankruptcy Code.

Joint

Any debts that were accumulated from financial obligations that benefited the marriage or household are considered a joint debt—for example: food, shelter, and transportation. This means these debts will be included in any single household bankruptcy case. Any debts that are owed through a jointly-undertaken contract that both spouses have signed, or for which both spouses’ credit scores were considered, are also joint debts.

When it comes to joint incomes and assets, how they are considered in a bankruptcy case is similar to debts. Incomes are considered joint if they used to cover joint expenses. Assets and property are jointly owned if both spouses’ names are listed on the title certificates, deeds, and registration cards concerning those items. They are also considered as joint if they were purchased with joint income.

Separate

When filing a joint bankruptcy petition, the majority of the household debt is considered in the case. The debts that are not considered are debts separately incurred by the spouses. This includes business debts, any loans not jointly contracted, and other debts not incurred by spouses as one entity.

The income of each spouse can be considered as separate income. This applies to outside incomes like inheritances, investments, and gifts if they are given or devised to only one spouse and not both. If any properties or assets are purchased with a separate income or have the name of only one spouse on the legal documents, these are also considered separate.

If you’re considering filing for bankruptcy in Windom, MN, or if you have questions about whether certain debts, incomes, and assets can be applied to a joint bankruptcy petition, contact Behm Law Group, Ltd. at (507) 387-7200 for more information.

2017 Retail Bankruptcy in Mankato, MN, and Its Effect on Small Businesses

As the Internet continually plays a larger and larger role in our lives, online shopping is slowly taking priority over shopping in physical stores. This is especially true when it comes to the many retail items readily available on Amazon.com. The result of this growth in Internet shopping is a significant surge in retail closures. However, there may be some benefits to small businesses facing the necessary potential of filing for bankruptcy in Mankato, MN.0

Behm Law Group, Ltd. attorneys will work to help any business filing for Chapter 7 bankruptcy, but in the coming months, financial situations may change for some.

In 2016, several retail giants announced their steps towards filing for bankruptcy, and many other companies planned to close a large number of their outlet locations, making 2017 the year where the effects of these closures will show their true colors.

 Who is filing for bankruptcy and/or closing?

Over 70 major US retailers announced plans to close high numbers of store locations and several of these companies filed for bankruptcy in the last few months. Among these retailers, Macy’s, Sears, Kmart, CVS, Kohl’s, and Walmart will close 30-100 store locations each, with more to be announced over the rest of the year. Mall-oriented stores like American Eagle, The Children’s Place, Aeropostale, and Finish Line are also working through plans to close locations over the next few years.

Of these retailers, several have declared bankruptcy in the past year, and others are entering into full-on bankruptcy in the next month.

Why are they closing?

While online shopping has added to the neglect of physical retail stores over the past 10 years, it’s not necessarily where the root of the problem lies. The fact is that the US retail market is oversaturated. The big retail companies had a long heyday before the Internet poked its head in the door, but in the early 2000s, the decline for large retail companies had already begun. The popularity of mall and retail shopping quickly decreased as the Internet offered more variety within the same categories of retail, wholesale, other cost-effective options, and specialty products. Because each store closure spirals even further shutdowns for each retailer, the process may cause a rapid plummet in the next few years.

How can this benefit small businesses?

Because so many large retailers are in the process of reducing their store footprint, there is more and more space opening up to smaller businesses. Not only do these openings include physical store space, but they also include more spaces on the market for the unique products small businesses specialize in that may be difficult to find online or in the remaining large retail outlets.

While small businesses can look forward to openings in the coming future, the changing market could affect companies of all sizes. Behm Law Group, Ltd. can offer legal advice and assistance for any small business or individual considering filing for bankruptcy in Mankato, MN. For more information, contact us at (507) 387-7200.