Finding Business Debt Relief in the Aftermath of the COVID-19 Outbreak

Bankruptcy is not for everyone and anyone who practices bankruptcy law responsibly and ethically will not try to “sell” someone on the process.  It is appropriately viewed as a last resort.  It is not something to be afraid of but it needs to be approached with a degree of healthy respect.  There is, however, no denying the significant impact the COVID-19 outbreak is having on global, national, and local economies. With the dramatic rise and fall in demand of various goods and services, the temporary closure of many operations, travel bans, trade constriction, and the detriment of the virus itself, the economy may be looking at numbers even worse than the housing crisis of 2008.

Many economic experts projected from the beginning of March that businesses of all shapes and sizes would be impacted by the damages wrought during the COVID-19 outbreak. If you are a local business, you may not be alone if you’re considering filing bankruptcy to find debt relief. With the help of Behm Law Group, Ltd., you can find protection and long-term debt relief in Waseca, MN through Chapter 7 or Chapter 13 bankruptcy.

Whether you file for Chapter 7 or Chapter 13 will depend on several things. First, only sole proprietors or partnership companies in which the owners are personally responsible for business debt may file for Chapter 13 reorganization bankruptcy. The process of Chapter 13 bankruptcy restructures business and personal debts together into a manageable repayment plan lasting a three- to five-year period depending on your debt and income. If you qualify for Chapter 13, you can maintain business operations and slowly repay your debts on terms that are more favorable to you.

If you don’t qualify for Chapter 13 or if you can accept that your business may have to be closed down, you have the option to file for Chapter 7 bankruptcy.  This process will liquidate your non-exempt assets in exchange for the discharge of debts. While you might not be able to keep your business running, you will likely be able to protect and retain things like your home and car and other necessary assets from liquidation.  In chapter 7 bankruptcy, the exemptions allowing you to protect and retain assets are quite generous.  In the vast majority of cases, people are able to keep all of their assets and the only things that they lose are their debts.

A comprehensive outlining of what is happening to the economy throughout the COVID-19 outbreak was done by the Center for Strategic & International Studies (CSIS). This informational article describes the impact COVID-19 has had through the very beginnings of the global outbreak on the economy including the drop in exports out of China, the fall of tourism, the demand for sanitary products, and much more. If you’re seeing an impact on your business operations due to the coronavirus and trickle-down global effects, you’re walking a fine line with practically every other business in the world. Relief from that impact can be found in bankruptcy.

To learn more about finding debt relief in Waseca, MN through bankruptcy, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Chapter 12 Bankruptcy for Farmers Affected by COVID-19 Shutdowns

As we continue to move through the devastation of the novel coronavirus outbreak, more and more public gatherings and store fronts are closing down operations. While there are many business owners severely affected by this outbreak, farmers and fishers might be looking at even more long-term negative effects than any type of retail operations.

The COVID-19 outbreak has led to countless farmers’ markets, outdoor year-round markets, local groceries, and many other food sale outlets to be shut down. These closings are creating a serious deficit in family-owned farmer and fisher incomes. If you are struggling with these shutdowns as a family farmer or fisher, Behm Law Group Ltd. can help you find debt relief through Chapter 12 bankruptcy in Windom, MN.

Chapter 12 bankruptcy is a chapter of the bankruptcy code that is specifically designed for family-owned farming and fishing operations that are struggling to make debt payments from month to month. If at least 50% of your annual income is sourced from your farming/fishing operation, you can qualify for Chapter 12 bankruptcy relief.

As a reorganization type bankruptcy, Chapter 12 works to structure your debts into a manageable repayment plan that is suited to your income and through which the debts in your farming or fishing operations can be paid back under terms that are much more favorable to you than the loan terms you may have now. While maintaining fair treatment to your creditors, you can repay your debts under the supervision of a trustee with pre-determined monthly payments during a three- to five-year period.

With prices of farm goods already tipping many farmers and fishers to the point of dipping into their savings, the new blow that COVID-19 outbreaks have had on the global economy and the shutdown of many public markets puts local agriculturalists in a precarious position. Without a clear idea of how commerce will continue to move forward into the growing season, many farmers are unsure of how to plan for the coming months. If coronavirus shutdowns and bans against public gatherings continue in some areas, farmers and fishers may have to file for Chapter 12 bankruptcy relief or find other sources of income.

The additional uncertainty farmers have with the upcoming presidential election only adds more pressure to an already stressful situation. If you are a local farmer or fisher, and you find that your debts are piling up with no clear idea of how they will be resolved, you can turn to the relief provided in a Chapter 12 bankruptcy. Those filing for Chapter 12 are not alone, and many other farmers or fishers have found long-term debt relief through the process. Chapter 12 bankruptcy can provide the long-term relief that farmers and fishers need to constructively address overwhelming debt and stabilize their businesses.

If you are considering filing for Chapter 12 bankruptcy in Windom, MN, we can help. Contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information.

Chapter 12 Bankruptcy for Farmers Affected by COVID-19 Shutdowns

As we continue to move through the devastation of the novel coronavirus outbreak, more and more public gatherings and store fronts are closing down operations. While there are many business owners severely affected by this outbreak, farmers and fishers might be looking at even more long-term negative effects than any type of retail operations.

 

The COVID-19 outbreak has led to countless farmers’ markets, outdoor year-round markets, local groceries, and many other food sale outlets to be shut down. These closings are creating a serious deficit in family-owned farmer and fisher incomes. If you are struggling with these shutdowns as a family farmer or fisher, Behm Law Group Ltd. can help you find debt relief through Chapter 12 bankruptcy in Windom, MN.

 

Chapter 12 bankruptcy is a chapter of the bankruptcy code that is specifically designed for family-owned farming and fishing operations that are struggling to make debt payments from month to month. If at least 50% of your annual income is sourced from your farming/fishing operation, you can qualify for Chapter 12 bankruptcy relief.

 

As a reorganization type bankruptcy, Chapter 12 works to structure your debts into a manageable repayment plan that is suited to your income and through which the debts in your farming or fishing operations can be paid back under terms that are much more favorable to you than the loan terms you may have now. While maintaining fair treatment to your creditors, you can repay your debts under the supervision of a trustee with pre-determined monthly payments during a three- to five-year period.

 

With prices of farm goods already tipping many farmers and fishers to the point of dipping into their savings, the new blow that COVID-19 outbreaks have had on the global economy and the shutdown of many public markets puts local agriculturalists in a precarious position. Without a clear idea of how commerce will continue to move forward into the growing season, many farmers are unsure of how to plan for the coming months. If coronavirus shutdowns and bans against public gatherings continue in some areas, farmers and fishers may have to file for Chapter 12 bankruptcy relief or find other sources of income.

 

The additional uncertainty farmers have with the upcoming presidential election only adds more pressure to an already stressful situation. If you are a local farmer or fisher, and you find that your debts are piling up with no clear idea of how they will be resolved, you can turn to the relief provided in a Chapter 12 bankruptcy. Those filing for Chapter 12 are not alone, and many other farmers or fishers have found long-term debt relief through the process. Chapter 12 bankruptcy can provide the long-term relief that farmers and fishers need to constructively address overwhelming debt and stabilize their businesses.

 

If you are considering filing for Chapter 12 bankruptcy in Windom, MN, we can help. Contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information.

 

Understanding Why Some Tax Debts Are Excluded from Discharge in Bankruptcy

After tax season has come and gone, people with lingering tax debts may be wondering how to cope with repayment or they are searching for a source of relief from that debt. If you’re looking for relief from other debts on top of tax debts, you may be able to find positive, long-term relief through Chapter 7 bankruptcy. In many cases, income tax debts can be discharged if they are at least three years old and those tax debts have been assessed as being due and payable for at least two years. However, some types of tax debt cannot be discharged through the bankruptcy process. Depending on your tax debts, you may or may not be able to have them discharged in a Chapter 7 bankruptcy. With the help of Behm Law Group Ltd., you can determine if filing for chapter 7 bankruptcy in Mankato, MN, is right for you.

 

Chapter 7 bankruptcy works to discharge debts in exchange for the sale of non-exempt assets. Non-exempt assets are assets whose values exceed the applicable protective exemption amounts provided by the bankruptcy code.  However, tax debts can be complex and how they are treated in bankruptcy can be nuanced.

 

Generally speaking, the conditions for a tax debt to be discharged in bankruptcy are stringent. First, it must be an income tax type of debt.  Second, the debt must be at least three years old, and you must have filed the return for the tax year giving rise to the tax debt at least two years ago. Also, the tax debt must have been assessed (acknowledged as due and payable) by the taxing authority for at least 240 days before you file bankruptcy, and there must be no evidence that you have engaged in fraud or willful tax evasion. If the income tax debt meets these conditions, it can be considered hardship and proof that you were unable to pay that debt for reasons outside of your control and such tax debt can be discharged in a chapter 7 bankruptcy case.

 

Tax debts that are excluded from the bankruptcy process are typically non-dischargeable for good reason. Most of these debts directly impact another person, organization, business, or other third party.

 

With a few exceptions, the tax debts that will typically survive a chapter 7 bankruptcy case include:

 

  1. Property taxes: These affect your city, state, and federal government in many ways. Because property taxes typically impact a local government, they can have significant influences on housing costs, licensing, and other property requirements if they are left unpaid.  Usually, when a city or county is owed property taxes the city or county will be entitled to assert a secured lien against any subject real estate for the amount of the delinquent property tax debt.    For instance, if you owe $10,000.00 to a city for property taxes, the city will assert a secured lien against your home in the amount of $10,000.00.  Such liens are essentially like other secured liens, such as liens on motor vehicles.  In a chapter 7 bankruptcy proceeding, you could technically be relieved of such property tax debt but you would also have to surrender your house.  For example, presume that you own a house that is worth $100,000.00 and that there is a $90,000.00 secured mortgage on the home.  Presume further, that you are delinquent with property tax debt to the city in the amount of $10,000.00 and that the city has asserted a tax lien for that amount.  If you were to file for chapter 7 bankruptcy relief, both the $90,000.00 mortgage and the $10,000.00 property tax lien would be considered secured debts secured by the value of your home.  In a chapter 7 case, both the mortgage lender and the city would only have recourse/relief for such debts against the value of the house.  You could walk away from personal liability for those debts going forward but you also would have to accept that you would have to surrender or lose the home.
  2. Third-party taxes: These include taxes paid to trust fund parties such as FICA and Medicare. It also includes sales taxes paid to the debtor by customers.
  3. Tax liens: Some tax debts can be secured by a tax lien asserted by the Internal Revenue Service or the Minnesota Department of Revenue.  In this case, the lien filed by the taxing authority essentially becomes secured by pretty much everything you own, including 401(k) plans, IRA’s, checking/savings account deposits, furniture and appliances, etc.
  4. Employment taxes: These includes excise taxes and custom duties, depending on time periods.
  5. Tax return errors: If you were erroneously refunded more than you should have on a tax return, you owe that back as a debt to whatever government entity paid it to you. This can significantly affect local governments if you do not repay it.

 

If you are planning on filing for chapter 7 liquidation bankruptcy in Mankato, MN, and want to know how it will affect your tax debt, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

How Legal Aid Offices Can Offer Bankruptcy Assistance

If you’re struggling with a heavy debt load or an income that doesn’t make ends meet every month, you aren’t alone. Many individuals like you can find debt relief and can resolve troublesome financial issues for the long term with the help of bankruptcy. The two main chapters of bankruptcy, Chapter 7 and Chapter 13, offer debt relief options in the form of debt discharge in exchange for asset liquidation of non-exempt assets or as a reorganization of debts into a repayment plan. To determine if filing bankruptcy is the right choice for you, and to decide which chapter you should file under, Behm Law Group Ltd. offers expert legal guidance and comprehensive bankruptcy assistance in Redwood Falls, MN.

 

Bankruptcy is a highly complex and nuanced legal process that can be very difficult to navigate without the right knowledge and tools. Because of this, filing for bankruptcy with the support of an attorney is the best possible option for any filer. However, many filers have difficulty finding the money to hire a lawyer and they, sometimes, must find their own way through the filing process. In the scenario of helping to find an attorney who may agree to accept lower attorney’s fees, one of the best resources you can use is your local legal aid office.

 

Legal aid offices provide public, and sometimes free, legal information and support services. You can find a legal aid office/legal clinic near you through the American Legal Services Corporation. Legal aid offices are set up as a nonprofit, being largely donation- and volunteer-based programs. Participating lawyers and other legal professionals, as well as counselors and social workers, establish a system that can provide protection in some ways for those unable to completely afford legal representation, but primarily the organization operates as a resource of legal information.

 

If you plan to file for bankruptcy and you’re having trouble finding the money to hire an experienced bankruptcy attorney, you can turn to a local legal aid office for some direction.  Because bankruptcy can be a highly nuanced and complicated process, most legal aid offices do not have attorneys who handle bankruptcy cases.  However, many private attorneys may be affiliated with a legal aid office.  Attorneys who are affiliated with legal aid offices may agree to accept lower fee amounts for people who seek assistance through the legal aid office.  In order to possibly qualify for lower fees, you may have to undergo a screening process with the legal aid office and with an affiliated bankruptcy attorney.  In order to obtain assistance with the attorney’s fees, you really must, in good faith, not have any other options.  If you receive tax refunds or have a relative who can financially assist you, or have a life insurance policy or a 401(k) plan that you can borrow against, you typically will not qualify for lower bankruptcy attorneys’ fees through the legal aid office.  Generally, all of the basic information you’ll need to file a bankruptcy case can be available through the legal aid office, including information about:

 

  1. Pre-bankruptcy requirements
  2. Documents included in your petition
  3. How to find and fill out all the necessary paperwork
  4. How to pay and/or waive bankruptcy fees
  5. What debts you can have discharged or reorganized
  6. What assets you can protect from liquidation
  7. Post-petition requirements
  8. Overall court process

 

Certain more unusual or complex information may also be available, but you may find it difficult to know what to ask for that will be relevant to your specific situation.

 

If you are able to afford legal representation, it is generally recommended that you do so. Legal aid offices cannot always give information that will be helpful in the face of changes in your case. Each bankruptcy case is unique, and certain circumstances may cause unforeseen difficulties after you file a petition. Additionally, legal aid offices cannot protect you from creditor judgments or other obstacles that may arise throughout your case, whereas such assistance is available with the help of an experienced bankruptcy attorney.

 

To learn more about legal aid offices and bankruptcy assistance in Redwood Falls, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

Part 3: Costs of Filing for and Hiring Bankruptcy Assistance

In the previous Parts 1 and 2 of this blog, we covered what bankruptcy fees you will be required to pay if you file, and what an attorney may cost as well as why it costs this much. In Part 3, the final section, we cover ways for you to pay those costs and what you can do if you are truly unable to pay certain required costs. If you are considering filing for bankruptcy, you need to understand the fees you’ll have to cover and what the full cost of a bankruptcy case of any chapter may be. Behm Law Group Ltd. provides expert bankruptcy assistance in New Ulm, MN, and the surrounding area.

 

While there are many costs involved in the bankruptcy process, and we understand that attorney fees can seem daunting, there are many ways of covering those costs.

 

How to Pay

If you can, you’re certainly able to pay bankruptcy fees and attorney costs with one lump sum. However, some people are not able to pay the fees and costs in full and all at once. This makes perfect sense since they are in dire financial circumstances that are requiring them to file for bankruptcy debt relief in the first place. For those who cannot afford the fees and attorney costs up front, there are other ways to pay.

 

  1. Payment plan: If you are filing for Chapter 7 bankruptcy, you can generally set up a payment plan for the attorney’s fees and court costs. An installment plan can be established as long as your fees are paid in full before your petition is filed and in a minimum of four installments.  Any bankruptcy attorney who is decent and worth hiring will not agree to file your bankruptcy case and then agree to accept monthly payments from you.  Such an arrangement is highly irresponsible and unethical because the same attorney helping you through your bankruptcy would become one of your creditors.  Also, any credible attorney worth hiring would not expect you to ask a friend or relative to sign a personal guarantee for the payment of your attorney’s fees and costs.  Such an arrangement is also highly unethical and extremely inappropriate because it allows the attorney to legally pursue the friend or relative if you fail to pay.  Such an arrangement essentially allows the friend or relative to be drawn into your financial vortex of misery and that is simply not right.
  2. Waivers: For the bankruptcy court filing fee, you can request a waiver of the requirement to pay it. To qualify for a waiver, your income must be 150% under the federal poverty line and you must not be able to pay the court filing fee in an installment plan.  However, bankruptcy courts are generally extremely reluctant to grant such waivers because the bankruptcy court filing fees help fund the entire bankruptcy system from bankruptcy judges to bankruptcy court law clerks to bankruptcy court staff and more.
  3. Pro bono: Attorney costs can be high for those who are unable to meet the basic bankruptcy fees, but there are some lawyers who occasionally set aside time in their schedules to offer legal aid for free to those who truly cannot pay the attorney’s fees and costs themselves or are unable to rely upon other resources such as friends and relatives.
  4. Legal aid: Government legal aid is offered nationally for individuals who cannot afford an attorney. While these legal aid offices provide guidance and important information, not all of them will offer bankruptcy filing assistance.
  5. Friends and family: When all else fails, most filers can turn to their loved ones for financial support. Keep in mind that family debts must be disclosed in your bankruptcy if there is a legal contract or other official documentation or even if there is a non-written expectation that you should pay them back.
  6. Borrowing from a 401(k), IRA or Life Insurance Policy:  Sometimes people can borrow against their retirement plans or cash value life insurance policies to acquire the necessary funds to pay their bankruptcy attorney’s fees and bankruptcy court filing costs.
  7. Employer Provided Legal Insurance Plans:  As part of a benefits package for their employees, some employers offer legal insurance plans such as ARAG Legal Insurance.  Typically, legal insurance plans will pay up to $2,000.00 towards bankruptcy attorney’s fees.  However, you must still pay the bankruptcy court filing fee of $335.00 for a chapter 7 case or $310.00 for a chapter 13 case.

 

Some filers also sell some of their possessions that will be exempt from the bankruptcy process, such as electronics, antiques, furniture, jewelry, and so on in order to pay for their attorney’s fees and bankruptcy court filing costs.

 

Filing for bankruptcy should be the opposite of a financially crippling experience. Because of that, there are many ways to pay the required fees and to get legal aid. To learn more about receiving bankruptcy assistance in New Ulm, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

How to File for Bankruptcy with and without a Bankruptcy Attorney

If you’re struggling to meet monthly debt requirements as an individual or a business, you may want to consider filing for bankruptcy as a long-term debt relief solution. Filing for bankruptcy may seem like a drastic choice with some negative effects on your credit, but in reality, bankruptcy has helped thousands of debtors regain their financial footing and improve their quality of life with the reduction of debts.

 

If you’re planning on filing for bankruptcy, there are several ways to do it, with or without the assistance of a bankruptcy attorney. At Behm Law Group, Ltd., we know that there are many individuals who can’t afford a bankruptcy attorney in Jackson, MN and the surrounding area, and we want you to know your options.

 

Filing for bankruptcy is a legal process that’s done through the U.S. bankruptcy court system. Because of this, it requires a comprehensive amount of documentation and paperwork that covers your entire financial history, including debts and income. In addition to the required paperwork, there’s a significant amount of pre-bankruptcy requirements that must be done before you file a case.

 

Filing a petition is a complex process where one will greatly benefit from the guidance of a trained legal professional. With or without an attorney, there are four main ways you will file:

 

  1. Attorney filer: If you can afford a bankruptcy attorney, you’ll have the easiest and most positive experience in filing. An attorney will do many things for you throughout your case. Learn more about what an attorney does here.
  2. Non-attorney petition preparer: If you absolutely cannot afford an attorney and can’t find one that will offer pro bono services, you can use a bankruptcy petition preparer instead. A petition preparer will fill out documents and forms for you and give them to you to send in.  The BAPCPA has guidelines and warnings for working with a petition preparer.
  3. Federal bankruptcy forms: To prepare your petition yourself, it’s recommended you visit a legal aid center for guidance on how to file. You can access the federal bankruptcy forms on the U.S. court website and download all the documents you’ll need to fill out. These templates, while standardized, do not provide any guidance on filling them out.
  4. Bankruptcy software: Filers can pay to use a software program that functions similar to online tax programs. The program will walk the filer through their financial records, asking questions and providing digital forms. However, these programs can be inaccurate because they can have issues translating the more nuanced parts of a filer’s financial circumstances and they are not always accurately updated in a timely way.

 

In general, taking advantage of the knowledge and legal protection of an attorney is the best-case scenario for putting together your petition and filing your bankruptcy. To learn more about filing for bankruptcy with or without the help of a bankruptcy attorney in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200, or stephen@mankatobankruptcy.com.

Part 2: Costs of Filing and Hiring Bankruptcy Assistance

Part 1 of this blog covers the bankruptcy fees involved in filing an individual consumer petition and breaks down what each fee applies to. Part 2 covers the costs of hiring an attorney and why the fees are what they are. As a provider of bankruptcy assistance in Mankato, MN, Behm Law Group Ltd. understands the difficulty that many filers have in trying to come up with the legal fees to file for bankruptcy relief. Our goal is to offer a better explanation of what these fees cover and why it is still important to take advantage of the expertise of an attorney no matter what type of chapter you file for.

 

In Part 1 of this blog, we generally placed the cost of a Chapter 7 case between $1,000 and $3,500, and a Chapter 13 case between $2,500 and $6,000. The largest part of that cost will typically be the fee for hiring an attorney. Despite this cost, it is almost always recommended that you take advantage of an attorney to assist you.  The bankruptcy code is a very complex system that can be extremely difficult to pick apart without experienced assistance. Many filers have their cases dismissed or be otherwise unsuccessful, wasting time and money, when this wouldn’t have happened with the help of an experienced lawyer. But why should I pay a lawyer? Put simply, a bankruptcy lawyer will do a lot more than you may initially realize and the lawyer will be there for you from the start of your bankruptcy case to the end.

 

What Lawyers Do

Bankruptcy attorneys build your case for you: organizing documents, gathering financial information, examining all your debts and properties, and creating a financial plan for your future. They also help you meet pre-bankruptcy requirements and protect you from creditors. In addition to all of this, they take on the vast majority of communication and organization among all parties involved (you, your creditors, the trustee, and the court). Overall, a bankruptcy attorney takes a significant burden off of your shoulders in many ways.

 

 

Attorney Costs

The cost of an attorney largely depends on your financial circumstances and any anticipated complexities involved in your case. It may also depend on the attorney involved, since some more experienced attorneys – attorneys who specialize only in bankruptcy matters — can charge more than lesser experienced lawyers who may not have been practicing as long and who may not be nearly as experienced with the bankruptcy process. Minimum costs are around $1,000, while maximum fees can exceed $5,000. To prevent excessive charges, the bankruptcy court reserves the right to examine the charges and make sure that they are reasonable. Many attorneys offer free consultations, and there are lawyers that reserve some of their time to offer pro-bono services to filers who absolutely cannot pay for bankruptcy assistance. In Part 3 of this blog, we’ll cover how you can pay bankruptcy court fees and attorney costs.

 

To learn more about receiving bankruptcy assistance in Mankato, MN, or to get a fee quote today, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

Part 2: How the 2020 CARES Can Affect Your Debt Relief

In the first part of this blog, we covered what debt relief options the 2020 CARES Act (Coronavirus Aid, Relief, and Economic Security Act) offers for mortgages, student loans, car loans, and property tax debts. This CARES Act, put into place on March 27th, 2020 in response to the novel coronavirus pandemic, establishes several rules and options for individuals facing extreme difficulties concerning income, debts, and state lockdowns.

 

As we work through this global recession, it’s important to remember that there are many options available to you for debt relief. One tool that is always available to you is to file bankruptcy. While this may seem like a drastic move, Behm Law Group, Ltd. has seen many clients use bankruptcy as a positive way for debt relief in Luverne, MN, especially in trying times like these.

 

During the period the CARES Act will be in place, there are additional options for debt relief on top of bankruptcy.

 

CARES Act Provisions, Continued

 

  • Credit Card Debt: Most major credit card providers are offering relief for their customers during this time. This includes credit line extensions, payment skipping, and forbearances. Talk to your bank to see how they can work with you if you’re unable to make credit card payments. Many banks and credit unions are also offering financial aid resources and loans for individuals and businesses while we get through this recession. This includes help for local businesses offered through the U.S. Small Business Administration (SBA).
  • Utilities and Others: More and more states are beginning to put suspensions on utility shutdowns and waive late fees. If you’re unable to make utility payments on time, the CARES Act and your state government’s own orders may protect you from late fees and from having your water, gas, and electricity cut off. On top of this, most phone and internet providers are waiving late fees and/or postponing shut offs due to missed payments. Some internet providers are also supplying free services to new customers or unlimited periods for existing customers.
  • Stimulus Check: The most direct source of assistance the CARES Act will provide is a stimulus check for each eligible citizen. Individuals with an incomes under $75,000 will receive a check of $1,200. Taxpaying families will receive an additional $500 per dependent under the age of 17. Spouses who file joint tax returns will receive $2,400. Individuals with incomes over $75,000 will receive smaller checks, reduced by 5% of their income over $75,000 (e.g.  income of $80,000 = stimulus check of $950).

 

The stimulus check and other relief options that the CARES Act puts into place during this trying time are established with the goal of protecting U.S. citizens from severe debt and the hopes that our economy will be cushioned in some ways from the worsening of the current recession.

 

To learn more about your options for debt relief in Luverne, MN, and filing for bankruptcy, contact Behm Law Group, Ltd. at (507) 387-7200 today or stephen@mankatobankruptcy.com.

Part 1: How the 2020 CARES Act Can Affect Your Debt Relief

In the face of the deadly coronavirus contagion and the significant effects that the spread will continue to have on the global economy, the U.S. government took some extreme cautionary measures. In addition to declaring a national emergency and deploying Federal Emergency Management Agency (FEMA) and National Guard relief, the federal government passed the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) on March 27. This act provides financial support to individuals struggling with little to no income during these uncertain times. The act may help to an extent, but the longer the pandemic continues, the harder it will be for many to keep making ends meet. If you are unable to make debt payments each month, you can find other sources of debt relief in Marshall, MN. With the help of Behm Law Group Ltd., you can use bankruptcy as one option to secure debt relief and long-term financial stability.

 

Bankruptcy can seem like a drastic option, even for those struggling significantly, but it’s a government-sanctioned process that has helped countless millions of individuals and businesses find their way through a recession like the one we, as a country, are working through now. The CARES Act offers some more immediate options for debt relief to all individuals as we continue to work through state lock-downs.

 

CARES Act Provisions

 

  • Mortgages: Anyone struggling to meet monthly mortgage payments has options for relief. Many homeowners are eligible for forbearances that provide short-term relief of their mortgage debt. This means you may skip some payments and spread the amount skipped throughout future payments. You may also be able to make a lump sum payment on missed payments later. In addition, many major mortgage providers—including Freddie Mac, Fannie Mae, VA-guaranteed, FHA-insured, and some federally backed lenders—have an imposed 60-day moratorium on foreclosures.
  • Student Loans: The CARES Act effectively suspended all collection activities and interest accrual on federal student loans for the next six months (until September 30, 2020), and these suspensions will be applied automatically. This act also suspends the reporting of negative credit information on credit reports, wage garnishments, and other collection actions on behalf of student loans during the national emergency.
  • Auto Loans: While there are no official federal rules with the CARES Act, many auto lenders are providing leniency to debtors. If you are struggling to make payments on your car loan, contact your loan provider. There is a good chance you’ll be able to delay payments or make other debt payment modifications.
  • Property Tax: Those with property tax debt or who are facing foreclosure because tax debt delinquency might be able to take advantage of a moratorium many counties are implementing. That moratorium varies by county, so check with your county treasurer’s office for more information.

 

In the second part of this blog, we’ll cover the additional resources the CARES Act offers for debt relief in Marshall, MN, during the coronavirus pandemic. To learn more about the options bankruptcy provides, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.