2021 Means Test Information and Using Bankruptcy for Permanent Debt Relief in Worthington, MN

Every year, the cost of living, retail prices, and many other aspects of our economy and lives change slightly. The same is true for the bankruptcy requirements and the bankruptcy code because the way bankruptcy works from case to case reflects household debts and household incomes. If you are considering filing for bankruptcy, you may qualify for Chapter 7 if you pass the Means Test. Chapter 7 bankruptcy is the most commonly filed individual consumer case, and it provides the most direct relief by completely discharging most debts in a very short period of time. Behm Law Group, Ltd. can help you determine if you’ll qualify for Chapter 7 or if you would benefit more from a Chapter 13 reorganization bankruptcy case. Our attorneys provide legal guidance and protection throughout your case, helping you find long-lasting debt relief in Worthington, MN and the local region.

Debt Relief

The Means Test is a bankruptcy code mathematical formula that determines your debt-to-income ratio. If your debt-to-income ratio is lower than the state average or median for a similarly-sized household, you will qualify for debt relief through Chapter 7 bankruptcy. Because the Means Test deals with debt and income levels, the numbers used for various household sizes change over time.

Since May of 2021, the Means Test numbers for household sizes in Minnesota are as follows:

Size of Household Monthly Income Annual Income
1     $5,214.50              $62,574.00
2    $6,873.58             $82,483.00
3    $8472.42              $101,669.00
4    $10,009.17          $120,110.00
5    $10,759.17           $129,110.00
6    $11,509.17            $138,110.00
7    $12,259.17            $147,110.00
8    $13,009.17           $156,110.00
9    $13,759.17            $165,110.00
10 $14,509.17            $174,110.00

These income amounts are calculated as gross income, so the actual conclusion of the Means Test doesn’t come until after your debts and other expenses are subtracted from these gross income amounts. If you have children, own a home and a car, are married, or have other common life expenses that are shared among many filers, it’s likely you will be more able to qualify and file for Chapter 7 bankruptcy even if your income is on the higher end.

Means Test

Due to lower costs of living and fewer expenses, single filers or households of just two people typically have a harder time passing the Means Test. If you fail the Means Test, you’ll still be able to file a Chapter 13 case. Chapter 13 reorganizes your debts into a manageable three (3) to five (5) year repayment plan that is tailored to your monthly income and your monthly reasonable and necessary living expenses. Your unsecured creditors are only partially paid – usually anywhere from 10% to 30% (depending on the level of your monthly household income) — and your secured debts are usually repaid under more favorable terms than you had before your bankruptcy case was filed.

To learn more about the Means Test and using individual consumer bankruptcy for permanent debt relief in Worthington, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

How a Chapter 7 Bankruptcy in Owatonna, MN is Finalized

There are many ways to resolve debts that you would otherwise never be able to repay, but the fastest and permanent way is through bankruptcy. Depending on the type of bankruptcy you file, your case could be processed as quickly as three to four months. In comparison, debt relief programs can take up to two to four years to handle your case, are rarely successful, and, in the few cases that are successful, can greatly increase the costs and the amount of time it takes to repay your debts by up to five years. Individuals can file a Chapter 7 case, which permanently discharges debts in exchange for the  liquidation of non-exempt assets, or a Chapter 13 case, which reorganizes debts into a manageable repayment plan lasting three to five years where you pay only a portion of your debts at no interest, late penalties or fees.  If you’re considering filing for Chapter 13 or Chapter 7 bankruptcy in Owatonna, MN or the surrounding area, Behm Law Group, Ltd. can provide comprehensive legal support and protection throughout your case.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common kind of individual consumer case. However, it does require filers to pass the Means Test in order to qualify. The Means Test measures your debt-to-income ratio. If that ratio is lower than the state median or average income for a similarly sized household, you’ll be eligible for a Chapter 7 case.

Steps in Chapter 7 Filing

There are many steps to a Chapter 7 case, including pre-bankruptcy requirements, paperwork, and the meeting of creditors, but when the necessary, sensible and understandable steps are completed, the bankruptcy court will grant a permanent discharge of most of your debts.

Discharge of Debts

Once the bankruptcy court approves the discharge of your debts, the bankruptcy court will issue a discharge order and a “discharge letter” will be mailed to your creditors and to you, officially and permanently ending your legal responsibility to repay all discharged debts. This order will wipe out all qualifying debts, including credit card, utility, medical, and personal debts. The discharge letter/order is typically sent 60 days after your meeting of creditors.

Exemption Claims

If you have properly asserted exemption claims regarding your property, your case will be fully closed and you will be able to move past your bankruptcy and move forward to a better and brighter future with much less stress.  In the majority of cases, people can assert exemption claims as to all their property items.  In most cases, people do not lose any property.

Trustee Final Report

Your case is closed when the trustee files their final report. This report and the final decree of the court usually closes your case for good.  However, bankruptcy cases can be reopened for various reasons.  For instance, if a creditor you listed in your bankruptcy case is still bothering you for repayment of its debt, you can reopen your bankruptcy case to initiate a lawsuit against that creditor and ask the bankruptcy court to punitively sanction the creditor.  Also, if you forgot about an asset and did not disclose the asset in your initial bankruptcy paperwork, you could reopen your bankruptcy case to amend your bankruptcy schedules to list the asset.

Summary

To learn more about filing for Chapter 7 bankruptcy in Owatonna, MN and how cases are finalized, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Importance of a Bankruptcy Lawyer in St. Peter, MN If Your Case Reopens

Using bankruptcy to permanently resolve common debts like credit cards, medical expenses, mortgages, car loans, personal loans, and even tax debts can be an effective, yet complicated process. Bankruptcy law is nuanced and shifts in the way it handles the financial situations presented in each petition on a case-by-case basis. There are two types of individual consumer bankruptcy, Chapter 7 and Chapter 13. Chapter 7 works to discharge debts in exchange for non-exempt asset liquidation. Generally, filers can protect their assets like their house, car, furniture, and appliances from liquidation with the available exemption allotments provided either under the bankruptcy code or under Minnesota state law.  Chapter 13, on the other hand, reorganizes debts into a manageable repayment plan. Secured debts (vehicle loans, mortgage delinquencies) will generally be repaid under much more favorable terms that are adjusted to your monthly income and monthly reasonable and necessary living expenses.  Generally, unsecured debts are only partially repaid 0-50%.  The chapter 13 plan lasts three- to five-yeas. All your disposable income (monthly income not needed for your reasonable and necessary living expenses) will go towards making monthly plan payments to the chapter 13 trustee. If you’ve considered either of these bankruptcy options, Behm Law Group, Ltd. can help. With a Behm bankruptcy lawyer in St. Peter, MN and the surrounding area, you can receive guidance, support, and legal protection throughout your case.

Benefits of Having a Bankruptcy Lawyer

Not only does a bankruptcy lawyer essentially construct your petition with you, walk you through pre- and post-bankruptcy requirements, and represent you during your bankruptcy hearing, the lawyer is also there to support you even after your case has ended. If you file for Chapter 13 bankruptcy, your attorney will help you work through any changes in income or living expenses or plan adjustments throughout the three to five-year repayment period.

Chapter 7

If you file a Chapter 7 case, your attorney will help you work through any issues that might necessitate the reopening of your case. There are several reasons why a Chapter 7 case might have to be reopened even after you have received your discharge order and your case has been closed for several months or even several years.

Bankruptcy Lawyer Can Help With Harassment

  1. There are additional properties or assets that need to be disclosed in the bankruptcy paperwork that were not listed when the bankruptcy case was filed.
  2. The attorney for the filer needs to add creditors that may not have been included when the bankruptcy case was filed.
  3. The attorney for the filer needs to sue a creditor who may be harassing the filer and not respecting the discharge injunctive mandates of 11 U.S.C. § 524.

Some case re-openings are beneficial to the filer, such as:

  1. They need to add a debt they forgot to list in their petition.
  2. They forgot to disclose an asset that could result in the revocation of their discharge if discovered.
  3. They want to file a motion to avoid a judgment lien.
  4. They want to request the court to punish discharge violations by aggressive creditors.
  5. There are other mistakes they need to correct in their petition.

Other case re-openings are advantageous to your creditors or the court, including:

  1. Some party discovered assets that were not initially disclosed which could provide significant value for creditors.
  2. Creditors were prejudiced because they weren’t notified of a bankruptcy proceeding.
  3. Any other material or mistakes significant to your case were discovered.

If your case is reopened for any reason, the protection and assistance of a bankruptcy attorney will help you receive the most favorable outcome. To learn more about filing with a bankruptcy lawyer in St. Peter, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Qualifications for Using Bankruptcy for Permanent Debt Relief in Marshall, MN

People struggling with making monthly payments on any of their debts have likely looked into ways to resolve those debts in alternative ways. Bankruptcy is one of the ways that thousands of individuals use to find permanent relief from debts they would otherwise never be able to resolve each year. Individual consumer bankruptcy can permanently resolve credit card debt, medical bills, mortgages, car loans, and many other common kinds of debt. While bankruptcy can be extremely effective for debt relief, it does have several requirements for filers to qualify. If you’re considering filing for bankruptcy to find permanent and lasting debt relief in Marshall, MN, or the surrounding area, Behm Law Group Ltd. can provide legal guidance and protection throughout your case. Our attorneys can first determine if you will qualify for Chapter 7 liquidation or Chapter 13 reorganization bankruptcy.

Chapter 7 Qualifications

Chapter 7 bankruptcy works to liquidate filers’ non-exempt assets in exchange for the permanent discharge of their debts.  In most cases, people can fully protect or exempt all of their assets.

  • Filers must pass the Means Test, which measures your debt-to-income ratio. If this ratio is lower than the state average or median for a similarly sized household, you can qualify for Chapter 7 bankruptcy. If you are married, you can measure you and your spouse’s income-to-debt ratio jointly.
  • Filers who previously filed a Chapter 7 case, but had their petition dismissed for any reason, can’t file again for 181 days.
  • Filers cannot have obtained a Chapter 7 bankruptcy discharge within the past eight years.
  • Filers cannot have obtained a Chapter 13 bankruptcy discharge within the past six years.
  • Filers must attend a court-approved credit counseling course within 180 days prior to the filing their case.
  • Filers must pay all bankruptcy fees and submit a factually accurate petition to the court listing all of their debts and all of their assets.

Chapter 13 Qualifications

Chapter 13 bankruptcy works to reorganize filers’ debts into a manageable repayment plan that considers their monthly reasonable and necessary living expenses and their level of monthly disposable income.

  • Filers who don’t pass the Chapter 7 Means Test can choose to file Chapter 13 instead.
  • Filers cannot have unsecured debts over $419,275, including debts like credit cards and medical bills.
  • Filers cannot have secured debts over $1,257,850, including debts like mortgages and car loans.
  • Filers need to have sufficient monthly income that exceeds their monthly reasonable and necessary living expenses to be able to make the monthly payments outlined in their chapter 13 repayment plan.
  • Filers must attend a court-approved credit counseling course within 180 days of filing their case.
  • Filers must prove that they have filed all federal and state income tax returns for the past four years.

Generally speaking, filers for Chapter 7 and Chapter 13 should not have engaged in any fraudulent behavior, such as maxing out credit cards immediately before filing or hiding assets.

Debt Relief

To learn more about finding permanent debt relief in Marshall, MN, and the local area by filing a bankruptcy case, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing stephen@mankatobankruptcy.com.

Farmer and Fisher Repayment Plans for Chapter 12 Bankruptcy in Mankato, MN

Many farming or fishing operations face difficulties year-round, often from the financial conditions that have worsened over the last few years. Low farming and fishing commodity prices and volatile weather conditions have become major challenges, especially for family-owned operations. Due to these problems and more, the rate of family farmer and fisher bankruptcies has gradually increased over the years, and in 2020, hit its highest peak since the Great Recession in 2007–2009. While some cases of farmer or fisher bankruptcies are liquidation bankruptcies that effectively end business operations, the majority of family farmer and fisher bankruptcies are reorganization cases that help filers get back on their feet financially and find permanent debt relief. If you are considering filing a Chapter 12 bankruptcy in Mankato, MN, or the surrounding area to resolve debts and stabilize your family’s farming or fishing operations, Behm Law Group Ltd. can provide legal support and guidance.

Chapter 12 Bankruptcy

Chapter 12 bankruptcy is similar to Chapter 13 wage-earner consumer bankruptcy. Both reorganize the filer’s debts into a manageable repayment plan lasting three (3) to five (5) years, both can provide for the repayment of secured loans under adjusted and more favorable terms, and both will provide for at least some minimal payment to unsecured creditors – usually 10% to 25% of what was originally owed to those unsecured creditors. Another factor they have in common is that filers will be required to dedicate all their available disposable income – income left over after reasonable and necessary living and business expenses are paid – to making payments in a chapter 12 or chapter 13 repayment plan.

Differences Between Chapter 12 and Chapter 13

Yet, there are several differences between Chapter 12 and 13, with the main one being repayment plans and the ways filers make payments. Chapter 13 plans require monthly payments to the bankruptcy trustee, but family farmers and fishers often have incomes that fluctuate with the seasons, so a monthly payment plan can be hard to maintain. Therefore, Chapter 12 plans can allow for seasonal payments or bi-annual payments or even one large yearly payment.

Also, Chapter 12 is different from Chapter 13 in that past production expenses and past incomes from previous years can be considered when a chapter 12 repayment plan is drafted and submitted to the bankruptcy court. This gives chapter 12 debtors more control over the repayment terms of their various debts in the repayment plan.

Repayment Period

During their Chapter 12 repayment period, family farmers or fishers can also sell property designated as “farmland or farm equipment” without negatively impacting their repayment plan and without necessitating higher plan payments to the chapter 12 trustee. This helps farmers and fishers in Chapter 12 bankruptcy pay down their debts and clear secured liens faster.

Farmers

For farmers selling assets/property during their repayment period, there are also some tax advantages. Taxes from the capital gains of the sales of equipment or real estate are treated as unsecured debts, like credit card debts or medical debts, in a chapter 12 case.   Presume a farmer purchased a combine for $100,000 and then sold it for $150,000 while in a chapter 12 bankruptcy.  Any income tax debt as to the $50,000 capital gain from the sale would not have to be paid to the Internal Revenue Service (IRS).   Rather, the tax debt from the sale would be treated and paid as an unsecured debt.

Cramdown

Through Chapter 12 bankruptcy, farmers and fishers also get the benefit of “cramdown”, which means they can cram down the amount of debt on a particular secured loan to the present value of the property item that serves as collateral for the loan.  For instance, presume that a farmer purchased a pickup truck two (2) years ago for $50,000.  Presume that the loan for the pickup truck had an interest rate of 15%.  Presume further that the farmer presently owes $45,000 and that the pickup truck is presently worth $30,000.  In a chapter 12 repayment plan, one can cram the $45,000 debt down to the present $30,000 value of the pickup truck and one can also cram down the accompanying interest rate from 15% to 5%.

To learn more about repayment plans and other aspects of Chapter 12 bankruptcy in Mankato, MN, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

Replacing Your Bankruptcy Lawyer in Luverne, MN

Individuals working through a bankruptcy case have most likely been introduced to the complexity and nuances of the legal process and court requirements. When you file for bankruptcy, you are required to provide comprehensive details of your income sources, debts, properties, and all other financial information. Not only can this documentation be daunting for most individuals unfamiliar with the process, but other issues may arise in any case that will require additional court hearings, such as creditor objections to the discharge of certain debts, judgment proceedings, and more. The best way to navigate any kind of bankruptcy is to seek the support and guidance of a qualified attorney. If you are looking for an expert bankruptcy lawyer in Luverne, MN or the surrounding areas, Behm Law Group, Ltd. offers complete services to help you work through your case from start to finish.

Bankruptcy Lawyer

We strive to provide professional services for all our clients filing for Chapter 7,12, or 13. If you are working through a case, we are here for you. With a Behm bankruptcy lawyer, you can rely on our expertise for skilled legal services, efficiency, and understanding of how stressful the bankruptcy process can be for any household.

If you’re working through a case and find your current lawyer is unsatisfactory for any reason, you can always terminate their services and seek the help of a different attorney.

Why you might need a new lawyer:

There are many reasons why you might need to replace your current bankruptcy attorney. For example, they may not be maintaining good communication by returning your calls and emails or outlining the process at each step. They could also not have the experience needed to handle your specific case if unusual circumstances arise.

If your attorney doesn’t come to your appointments and court hearings, such as the meeting of creditors, you may find yourself wanting to examine your professional relationship with them. The same is true if they fail to meet filing deadlines or if they file incomplete documentation in your petition.

Lawyer Fees

If for any reason your attorney causes delays in your case, makes more unnecessary work for you, creates additional and unnecessary legal costs, or unexpectedly increases their fees for unexplained reasons, you may want to examine your relationship. When these issues arise, you should make every effort to respectfully engage your attorney first and fully discuss any concerns you may have.  You should always err on the side of caution and not make definitive conclusions and you should always provide your attorney with a good faith chance to redress any concerns you have.  It is important to understand that your attorney may not even be aware that anything is wrong or that you have significant concerns.  It is also important to understand that many attorneys won’t want to take a case where there has been a dispute between someone and one’s previous attorney.  Further, hiring a second/alternate attorney will result in additional legal costs.

Behm Law Group, Ltd. handles only bankruptcy cases. We have extensive experience in Chapter 7 liquidation cases, Chapter 13 reorganization cases, and family farmer and fisher Chapter 12 cases. To learn more about our services or to hire a bankruptcy lawyer in Luverne, MN, contact us at (507) -387-7200 today or stephen@mankatobankruptcy.com.

Recent Cases of Significant Student Loan Debt Relief in Pipestone, MN

Under today’s bankruptcy laws, it’s very difficult to receive a discharge of student loan debt. While some lawsuits and proposed laws might signal a change in the way student loans are handled in individual consumer bankruptcy cases in the future, they are currently almost always excepted from discharge. In order to have a student loan debt discharged in your bankruptcy case, you need to be able to prove facts substantiating “undue hardship.” This means you’re facing severe difficulties, both financial and otherwise, that make it impossible or highly impracticable to repay your entire student loan. If you believe you are facing undue hardship or if you plan to use bankruptcy for other kinds of debt relief in Pipestone, MN, Behm Law Group, Ltd. can provide expert attorney legal services to support you every step of the way.

Student Loans

Along with the recent McDaniels v. Navient case and the proposed Covid-19 Student Loan Relief Act of 2020, there have been several recent bankruptcy cases that resulted in large portions of student loan debts being discharged. Over the past two to three years, Mis Loe, Katy Adams, Kevin Rosenberg, and Jamie Mudd all used bankruptcy to effectively discharge significant student loan debts.

Debt Relief

Mis Loe: Californian Mis Loe received a 98% discharge of her student loans that had accrued to over $350,000 in 2021. Loe faced health issues after starting her undergraduate degree in 1992, and her income halted with the 2020 pandemic. Her student loans had accumulated to $356,637.82. With an adversary proceeding in her Chapter 7 case, she was finally able to find debt relief from those loans.

Katy Adams:

Katy Adams of Texas found relief from her $41,509 in student loan debts. Adams worked as a public servant for over 20 years, but personal events forced her to leave that career. With several lower-income jobs making her incapable of making loan payments larger than the monthly minimum payments, Adams filed for Chapter 7 in 2019 to totally resolve the student loan debts.

Kevin Rosenberg:

U.S. Navy veteran, Kevin Rosenberg, owed six figures in student loans for over 15 years. In 2020, the New York Bankruptcy Court granted the discharge of his $221,385.49 worth of student loan debts. Rosenberg was an attorney, but after realizing that a law career wasn’t his calling, he left to become an entrepreneur with relative success. However, the recession and some personal issues caused an irreversible and significant drop in his income, leading to the increase of his student loans.

Jamie Mudd:

Nebraskan Jamie Mudd had almost $90,000 in student loan debt discharged in her bankruptcy case in 2019 with an adversary proceeding. After earning two Associate degrees and working multiple retail jobs, Mudd had also begun caring for her developmentally-challenged grandson. Because of these circumstances, she was unable to materially reduce her student loan debts which had amassed to $89,525.38.

These are just some examples of discharged student loan debts through bankruptcy. To learn more about finding debt relief in Pipestone, MN with bankruptcy, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatel:%20(610)%20431-3553tobankruptcy.com.

Divorce Settlements and Chapter 13 Bankruptcy in Windom, MN

It’s very common for a bankruptcy to follow a divorce, and the legal settlements that a divorce establishes can be affected in various ways with a subsequent bankruptcy filing. While domestic support obligations, such as alimony and child support, are typically excepted from discharge in any bankruptcy filing, many other obligations incurred through a divorce can be discharged. Bankruptcy is a nuanced system that helps thousands of individuals and businesses find permanent relief from debts that they would never be able to repay. For those considering filing for Chapter 7 or Chapter 13 bankruptcy in Windom, MN and the surrounding area, Behm Law Group, Ltd. attorneys provide expert legal guidance and protection throughout the entire process. We help you construct your petition, file the necessary paperwork, documents, and forms, and navigate through all the legal requirements and court procedures.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, or wage-earner bankruptcy, is a reorganization process that restructures your debts into a three- to five-year repayment plan that is suited to your monthly income and monthly necessary living expenses.  If you file for Chapter 13 after entering a divorce settlement, the particulars of that legal arrangement can be impacted in different ways.

Divorce Settlements

Marriage settlement agreements are contracts that divide the assets the couple previously jointly owned among the two divorcing parties.  It can also assign responsibility for certain debts that the parties incurred during the marriage.  Also, it establishes and assigns domestic support requirements like alimony and child support. The domestic support obligations, such as alimony and child support, established through the divorce decree/settlement typically won’t be discharged in a subsequent bankruptcy proceeding.  For various public policy reasons, the drafters of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 wanted to hyper-prioritize obligations related to child support and alimony so that such obligations would be virtually immune to the bankruptcy process.

Divorce and Bankruptcy

However, sometimes divorce settlement agreements will require one spouse to pay certain debts that were jointly incurred during the marriage and hold the other spouse harmless or immune from such debts.  Also, where one spouse receives more hard assets or property than the other spouse, a divorce settlement agreement can require the spouse who is receiving more hard assets/property to pay a lump sum cash amount to the other spouse as an equalizer of sorts.  These sorts of obligations sometimes can be altered or discharged in a Chapter 13 case.

To learn more about why divorce often leads to bankruptcy and how divorce settlement obligations are handled in Chapter 13 bankruptcy in Windom, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Terms to Know: Bankruptcy Code in Waseca, MN

Bankruptcy can be a highly complex legal process.  However, it can and will help you permanently resolve debts you can’t repay. Understanding the nuances of bankruptcy law typically requires a law degree and extensive experience. While it’s possible to file for bankruptcy without the help of an attorney, it’s certainly not recommended. The bankruptcy court will require you to provide information about all your finances, including income sources, debts, and living expenses. There will also be pre-bankruptcy filing and post-bankruptcy filing documentation requirements in addition to having to provide the bankruptcy fees. Behm Law Group, Ltd. attorneys will support and guide you through the entire process of filing your bankruptcy petition and they will work with you through the rest of the nuances of the bankruptcy code in Waseca, MN.

Bankruptcy Code

There are many terms outlined in the bankruptcy code that might be unfamiliar to someone who has never filed for bankruptcy relief. Some basic bankruptcy terms include:

Trustee:

The bankruptcy trustee is a court appointed official, who is usually an attorney, who oversees and administers your case. The trustee collects and examines your paperwork concerning your bank accounts, tax returns, etc. The trustee is a fiduciary for your creditors, particularly your unsecured creditors.  The Chapter 7 trustee administers your bankruptcy estate and liquidates your non-exempt properties and distributes the resulting value to your creditors.  A Chapter 13 trustee receives your monthly chapter 13 plan payments and divides the monthly payments up among your unsecured creditors.  The Chapter 13 trustee also reviews your chapter 13 plan repayment proposal to ensure that the terms of your chapter 13 plan comply with the requirements of the bankruptcy code and are fair to your creditors.

Credit Counseling:

Credit counseling is a pre-bankruptcy requirement that must be done through a court-approved counseling agency within 180 days before the filing of your bankruptcy petition. The counseling will address the budget issues/problems that you have been experiencing and it will examine the reasons that forced you to file for bankruptcy relief.

341 Hearing:

The 341 hearing, also called the meeting of creditors, is an administrative hearing that is usually conducted thirty (30) days after a bankruptcy petition is filed. At the 341 hearing, you and your attorney meet with the trustee administering your bankruptcy case.  The hearing usually lasts only ten (10) minutes or so and the trustee asks you various questions about your financial situation and about your bankruptcy petition to ensure that you have disclosed all your assets and creditors.  You are sworn under other oath and you must answer the trustee’s questions truthfully.  Your creditors may also attend the hearing and ask you various questions about your assets and liabilities.  In most cases, however, no creditors attend the hearing and it is just you, your attorney and the trustee discussing your financial situation.

Secured Property:

Any debts tied to a property are considered secured. This typically includes home mortgages, car loans, financing on furniture and appliances, and mortgages on other real estate, such as business properties and rental properties.

Unsecured Property

: Debts that are not tied to property are considered unsecured. Most individuals have unsecured debts like credit cards, medical bills, personal loans, tax debts, student loans and more.

Means Test:

The Means Test is a mathematical formula that calculates your income-to-debt ratio. If this ratio is lower than the state median or average income for a similarly sized household, you can qualify for Chapter 7 bankruptcy. If it’s higher, you may have to file for Chapter 13 bankruptcy relief instead.

Automatic Stay:

When you file any type of bankruptcy petition, the automatic stay is immediately in effect. This stays most creditor collection activities while your case is being processed. After you file a bankruptcy case, creditors can’t continue collecting on debts that you owe and they can’t harass you with nasty telephone calls or abusive and threatening letters.

To learn more about bankruptcy terms to help you understand if you need to file for bankruptcy and to obtain more information about the bankruptcy code in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today or stephen@mankatobankruptcy.com.

Personal Chapter 11 Cases for Wage-Earner Bankruptcy in Fairmont, MN

At Behm Law Group Ltd., we provide legal guidance, support, and protection for individual Chapter 7, 12, and 13 bankruptcy cases as well as Chapter 7 and Chapter 13 business cases. Chapter 7 works to discharge your debts in exchange for the liquidation of your non-exempt assets. Both Chapter 13 and 12 work as reorganization processes in different ways. When you file for reorganization bankruptcy, your debts are restructured into a manageable repayment plan that lasts a predetermined amount of time (usually three to five years). If you have debts you know you can’t repay, even with a steady income, we can help you file for reorganization bankruptcy, AKA wage-earner bankruptcy, in Fairmont, MN, and the local area.

Wage-Earner Bankruptcy

Chapter 13 is the most common type of wage-earner bankruptcy filed. Chapter 12 is limited to family farmers and fishers with specific requirements for eligibility. Aside from Chapters 12 and 13, individuals can file one other type of reorganization bankruptcy: Chapter 11.

Chapter 11

Chapter 11 is usually a bankruptcy reserved for corporations, limited liability companies and other kinds of businesses, but in some circumstances, individuals can use Chapter 11 to resolve their debts. Almost always, an individual Chapter 11 involves real estate investment reorganization or the handling of unsecured debts that are too high for Chapter 13 relief.

Real Estate Investors

Real estate investors filing for Chapter 11 bankruptcy can rewrite mortgages, reduce interest rates, and extend the terms of repayment. For example, a filer could rewrite a mortgage on a property worth $80,000 tied to a mortgage in the amount of $100,000. That $100,000 mortgage could be rewritten or crammed down to the actual $80,000 value of the property. Then the terms of repayment could be extended up to an additional 30 years, making the monthly payment requirement much lower.

Unsecured Debt

If filers have unsecured debts higher than $419,275, they can use Chapter 11 to reorganize those debts and their secured debts into a repayment plan. This reorganization process works similarly to Chapter 13. Chapter 11 repayment plans, lasting a predetermined amount of time, will include terms for the payment of secured debts under more favorable terms to you.  Chapter 11 repayment plans will also provide for only the partial payment of your unsecured debts at 0% to 100% of what you initially owed.

Disposable Income

Filers will have to dedicate all their disposable income to meeting monthly payments. Filers also can reserve discretionary income for household expenses and necessities, such as food, gas, utilities, and more.

Individual consumer Chapter 11 cases are not common. For any Chapter 11 or Chapter 13 cases for wage-earner bankruptcy in Fairmont, MN, and the surrounding area, Behm provides expert attorney services. Contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com today to learn more.