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.

Understanding the Role of the Bankruptcy Trustee in Your Petition for Bankruptcy in Owatonna, MN

When you enter the process of filing for bankruptcy, you agree to follow the many stipulations of U.S. Bankruptcy Courts and U.S. Bankruptcy Code. These regulations play important roles in protecting you as a filer, protecting your creditors, and protecting others involved in your bankruptcy case. One such requirement involved in Chapter 13 and Chapter 7 bankruptcy cases is the appointment of a trustee to oversee the administration of the petition. Behm Law Group, Ltd. offers guidance throughout your own process of filing for bankruptcy in Owatonna, MN, and will work with your trustee to ensure optimal results.

Entering into a bankruptcy case means that you are automatically given a trustee to handle your petition. What a bankruptcy trustee actually does and who they actually are, however, may not be clear to filers.

Who are they?

In a nutshell, your bankruptcy trustee is a qualified individual the court will appoint to your bankruptcy case. Essentially, the trustee is a chaperone for your case. Your trustee is there to work through your case as a liaison between you and your attorney, your creditors, and the bankruptcy court. Bankruptcy trustees handle forms involved in virtually all kinds of cases, so they are well equipped to oversee your petition to the end.

What do they do?

The responsibility of a bankruptcy trustee is to administer your case. This includes the following:

  1. Examining your paperwork and all other information involved in your case
  2. Overseeing your confirmation hearing in a Chapter 13 case
  3. Overseeing your reaffirmation hearing in a Chapter 7 case
  4. Overseeing the meeting of the creditors
  5. Overseeing any other hearing involved (e.g. a hearing for a creditor’s motion for relief on an automatic stay)
  6. Identifying and selling all your nonexempt assets involved in a Chapter 7 case
  7. Evaluating your repayment plan in a Chapter 13 case to verify its fair treatment of you and your creditors
  8. Overseeing adversary proceedings if a lawsuit occurs during your bankruptcy process
  9. Overseeing the motion to dismiss your Chapter 13 case if you do not make repayment plan payments
  10. Ensuring legal accuracy throughout the process

Without bankruptcy trustees, the process of filing a petition and completing a case would be filled with confusion, unfair treatment of players involved, and probably a bit of foul play.

Our attorneys can also help you throughout the process of filing for bankruptcy in Owatonna, MN, with legal advice and assistance. For more information, contact us at (507) 387-7200.

How Lawsuit Money is Handled When You File for Bankruptcy in Marshall, MN

When you file for bankruptcy, your finances are very closely scrutinized. No matter what type of bankruptcy you file for, all your sources of income and debts must be considered in the process. When it comes to your income, this can mean anything from your normal job to money from a garage sale. Income you’ve gained from a lawsuit is no exception to this requirement, and in some cases, you may have to forfeit your lawsuit money. Behm Law Group, Ltd. can help you navigate through the process of determining how your lawsuit money is handled during a bankruptcy filing in Marshall, MN.

The two main types of bankruptcy—Chapter 7 and Chapter 13—treat your income differently. When you file for Chapter 13 bankruptcy, your income is considered in balance with your debts in order to determine a suitable repayment plan. This means that your lawsuit money is taken into account for your debt repayment, but it remains generally untouched. The process of Chapter 7 bankruptcy is when your lawsuit money really comes into question.

Lawsuit Money With Chapter 7

In Chapter 7 bankruptcy, your assets will be liquidated in order to repay your creditors and discharge your debts. While it’s almost always beneficial to Chapter 7 filers to have these debts discharged, they still have to sacrifice many of their property assets in the process.

Lawsuit money falls into the category of assets in a bankruptcy estate. This includes any money you have received/expect to receive/are entitled to receive from a lawsuit case. In some situations—for example, if you did not have many assets and were in a position to potentially file a lawsuit against a person or entity—your bankruptcy trustee has the right to pursue that claim on your behalf. However, the money from any lawsuit will be used to pay your creditors and discharge your debts unless you can use an exemption.

Exemptions can work to protect the income you’ve earned from a lawsuit. In Minnesota, you can exempt lawsuit money from liquidation if it’s protected under certain exemption laws. For example, Minnesota exemption laws protect lawsuit money from cases involving personal injury, wrongful death, and damaged exempt property (e.g. if your home is wrongfully damaged after it was protected with a Homestead Exemption.)

Federal exemption laws also protect lawsuit settlements involving wrongful death, personal injury, and future incomes lost. Depending on your financial situation, you may choose federal or Minnesota exemption laws to protect your lawsuit money.

Behm Law Group, Ltd. works with you through the process of filing for bankruptcy in Marshall, MN, to help you choose exemptions and protect your assets during Chapter 7 bankruptcy filings. For more information, contact us at (507) 387-7200 today.

Getting Automatic Stays Fast and Filing for Emergency Bankruptcy in Luverne, MN

There are times in many people’s lives when financial emergencies come suddenly. Whether it happens because of a failed investment, a major business loss, stock market crashes, or other unexpected life events, financial difficulties can arise in a matter of minutes. When issues like this loom over your income and assets, filing for bankruptcy may be your best option. When you file for bankruptcy, however, the process can take up to several months to reach the point where you have submitted all of the necessary documentation to your attorney. In cases where you need the protection of the bankruptcy code sooner rather than later, Behm Law Group, Ltd. can help you file for bankruptcy on an emergency basis in Luverne, MN.

The most important immediate result of filing for such a bankruptcy filing is getting the automatic stay fast.  The automatic stay of 11 U.S.C. Sec. 362 is actually a court-mandated injunction that blocks the collection activities of most of one’s creditors. If you have filed for bankruptcy relief, it’s almost certain that the automatic stay was in effect and prevented your creditors from collecting or contacting you during your bankruptcy proceeding.

Steps in Filing for Emergency Bankruptcy:

  1. Collect the required documents needed to file for emergency bankruptcy. The attorneys at Behm Law Group, Ltd. will help you throughout this process
  2. To get the automatic stay as quickly as possible, you must file a Voluntary Petition (Form 1), a statement of your SSN (Form 21), and Mailing Matrix information denoting the addresses of your creditors
  3. Once your initial forms have been processed and the automatic stay is in effect, you must complete the filing of the remaining required bankruptcy forms within 14 days of the filing date. This period can be extended upon request by your attorney.

Filing an emergency bankruptcy petition is a way for individuals and businesses to access the bankruptcy system immediately and get some “breathing space” and time to gather all other necessary paperwork without ongoing creditor harassment.  The process of emergency bankruptcy does not eliminate any of the other necessary standard forms needed to complete your petition, but instead rearranges the order in which you complete the majority of those forms. By completing Forms 1 and 21 along with a mailing matrix listing your creditors, attorneys, debt collectors, or any other agencies seeking payment, the automatic stay will be immediately in place.

Getting an automatic stay quickly when you’re in serious financial trouble is the best benefit of an emergency bankruptcy filing. This rearrangement for the process of filing for bankruptcy in Luverne, MN, allows a quick automatic stay to prevent continued financial struggles throughout your bankruptcy process. For more information about how an emergency bankruptcy can benefit you, contact Behm Law Group, Ltd. at (507) 387-7200.

Resolving Your Debts With Repayment Plans in Chapter 13 Bankruptcy in Windom, MN

Of the two common bankruptcy options available to individual filers, Chapter 13 is the more varied and personalized code applicable to your debts. The repayment plan established when you file for Chapter 13 is unique to your own case, and it may be very different from the repayment plan of another individual. The financial situation—the balance of debts, income, and assets—of the individual dictates how the repayment plan is structured. Behm Law Group can offer legal advice and assistance to help you determine how your repayment plan will affect you during your petition for Chapter 13 bankruptcy in Windom, MN.

To understand how your repayment plan will resolve your financial situation, you must first look at how each type of debt is considered in Chapter 13 bankruptcy.

 Priority debts are always included in a repayment plan. This means you will have to pay back the entirety of all your priority debts. The benefit of having a repayment plan is that this payback will happen little by little, usually at no interest, with payments that fit your unique financial situation. Priority debts include child support, alimony, and tax debts incurred in the last 3 years, compensation owed to your employees, or money you owe to an employee fund. These debts are not subject to discharge with any form of bankruptcy.

 Secured debts are an optional part of your repayment plan. These debts include properties you owe payments for, such as vehicles or homes. If you want to keep any properties bound by secured debt, you will have to include the present value of the property securing that debt in your repayment plan and repay that value over time.  Sometimes the value of the property securing a debt is a lot less than the amount of the debt itself.  In such a case, you only have to pay the actual value of the property. For example, if you owe $15,000.00 on a vehicle that is presently worth $5,000.00 and the debt on the vehicle is more than 910 days old, all you would have to pay is $5,000.00.  Tax liens are also considered secured debts that you must pay back within a Chapter 13 bankruptcy plan.

 Unsecured debts vary the most when it comes to determining the right repayment plan for you. What you will pay back on unsecured debts is decided based on the balance of your nonexempt properties with your disposable income and the total period of your repayment plan. These unsecured debts include credit debt, medical bills, and several other forms of consumer or non-property debts.

As a side note, you will also have to pay the entirety of your bankruptcy fees for the process of filing for Chapter 13 bankruptcy. This includes trustee compensation and any fees due to your bankruptcy attorney.

The comprehensive help that Behm Law Group, Ltd. offers with our expert bankruptcy attorneys can be key in guiding you through the process of filing for Chapter 13 bankruptcy in Windom, MN. For more information, contact us at (507) 387-7200 today.

Holding on to Retirement Plans and Pensions When Filing for Bankruptcy in Pipestone, MN

Sometimes financial difficulties arise when least expected, and tackling the burdens of debt can prove more and more trying as time passes. Even with the relief that the U.S. Bankruptcy Code can provide to households and individuals in need of debt alleviation, the stripping of assets with debt liquidation or the reorganization of debts with repayment plans does not solve all problems. If you’re considering filing for bankruptcy in Pipestone, MN, Behm Law Group, Ltd. can provide assistance with your petition so you can make the best out of a sticky situation.

For the majority of bankruptcy cases, pensions and retirement plans are left untouched. The U.S. Bankruptcy Code was designed to protect the filer as much as possible during and after the bankruptcy process, including shielding all pension funds and retirement plans with only a few exceptions.

Non-Exempt Pensions

The few pensions that do not qualify for an exemption from bankruptcy filings include the following:

  • Employee Stock Purchase Plans (ESPP)
  • Plans that are not considered legitimate retirement plans under sections of tax code indicated in the bankruptcy process
  • Plans that are not fully funded or that are incorrectly funded
  • Plans that are not in compliance with tax code in any other way, including roll-overs or transfers and plans without approval from the Internal Revenue Service
  • An Individual Retirement Account (IRA) inherited from anyone not your spouse

Automatically-Excluded Pensions

There are many types of pensions that are untouchable during the bankruptcy process because they are considered excluded from your asset stockpile (your estate). As such, you do not need to claim them as exempt, but you should still offer information about these accounts to your trustee and attorney.

Automatically-excluded pensions include the following:

  • Plans under IRC 414(d) (most government retirement plans)
  • Plans under IRC 567 (most deferred compensation plans)
  • Plans under IRC 530(1)(b) (most educational IRAs)
  • Plans under IRC 403(b) (most tax deferred annuity plans)
  • Plans that qualify under the Employee Retirement Income Security Act of 1974 (ERISA)

There are also several forms of non-excluded retirement funds and pensions that you can claim as exemptions in your bankruptcy case; however, these codes change between state exemption laws and federal exemption laws. You can elect to choose either state or federal exemptions when you file for bankruptcy in Pipestone, MN, depending on which will benefit you most in the long term. Behm Law Group, Ltd. can provide the legal advice you need to make these kinds of decisions throughout the bankruptcy process. Contact us today at (507) 387-7200 for more information.