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Chapter 12 Bankruptcy to Support Minnesota Farmers in Worthington, MN

Maintaining a farm in a time of imports and automation can be a complex and financially stressful venture in the Worthington, MN area. But Minnesota values its farmers, and Behm Law Group is no exception. With the support of our lawyers, struggling local farms can start their journey towards financial recovery with Chapter 12 bankruptcy and continue to share in the bounty of our state for years to come.

Financial Recovery

Farming is an unpredictable profession, and few other professions are so utterly left to the whims of nature. Irregular weather patterns can impact crop yields, illnesses may leave cattle or other livestock under-producing, and market prices can spike and drop with little warning. Even a consistently effective and productive farming family can find themselves in need of financial recovery at what may feel like a moment’s notice. In these situations, it’s important to remember that legal options exist that will help you forge a path forward.

Chapter 12 Bankruptcy

U.S. bankruptcy law has concessions built in to provide relief for farmers caught in a tough spot. Chapter 12 Bankruptcy is one such concession. In order to make payments on any money owed, bankruptcy hits the pause button on your debts and gives you an opportunity to reorganize your income and debts. Reorganization under Chapter 12 bankruptcy generally gives you three to five years of structured repayment, so you can spread out any debts into manageable monthly payments instead of existing overwhelming loan terms.

Chapter 12 Bankruptcy for Farms

At Behm Law Group, our financial recovery law professionals can help guide you and your family through a farm recovery program. We’ll work closely with you to create a comprehensive and customized plan. Bankruptcy doesn’t have to feel like a losing game, and with our lawyers on your side, we can help you find your farm’s financial solutions.

Farmers in the Worthington, MN area interested in learning more about Chapter 12 bankruptcy or looking for avenues for financial recovery can contact Behm Law Group at (507) 387-7200 or our website. Call today to discuss bankruptcy options and start making a plan that allows you to keep your farm, keep production going, and keep contributing to Minnesota at large.

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An Experienced Bankruptcy Attorney Can Help You Understand Bankruptcy Law in Mankato, MN

The days leading up to making a decision to file for bankruptcy relief can be utterly chaotic. Filing for bankruptcy can be very stressful and scary because bankruptcy is highly nuanced and many people, including many attorneys, don’t have a working understanding of the process. With Behm Lawn Group , bankruptcy attorney on your side, you can navigate the particulars of bankruptcy in Mankato, MN and know that you’re making the best possible decisions for you and your financial future.

Bankruptcy Attorney can Help You Consider Bankruptcy

Deciding that it’s time to consider bankruptcy can feel devastating. For many, the decision is preceded by months or even years of intense financial and emotional stress. In many cases, many people invest years of hard work to try and earn enough to avoid having to consider bankruptcy.  Considering whether to file for bankruptcy relief and, after due consideration, going through the process doesn’t have to be overwhelming. While bankruptcy law can be complex, a qualified bankruptcy attorney can help walk you through the legalities of completing the process and guide you into a new, much less stressful future.

Increase Chances of Success

It’s important to understand that even if you think you have a clear-cut case, hiring a bankruptcy attorney to help you figure out a plan will increase your chances of success. Plus, having a seasoned professional who specializes in bankruptcy law can help you establish peace of mind and stability throughout the entire process. When everything else feels uncertain, having someone on your side who is very familiar and comfortable with the process can make a huge difference.

A major benefit of having an expert bankruptcy attorney is having someone familiar with all the paperwork, documents, and record-keeping necessary to reach a successful arrangement. No matter how organized you are as an individual or business owner, knowing exactly what forms and documents you need to present can strengthen your case and give you a better idea of what to expect going forward.  Missing necessary paperwork can weaken and complicate your case.

Rather than leaving anything to chance or simply a lack of expertise, a bankruptcy attorney can provide the support you need to file a bankruptcy that appropriately fits your financial circumstances. With the support of Behm Law Group on your side, you don’t need to be an expert in bankruptcy law in order to successfully file for bankruptcy relief and obtain a true financial fresh start. Our bankruptcy attorneys will walk you through your bankruptcy step-by-step and ensure that you find a financial balance that will allow you to move forward in your financial life. Mankato, MN residents in need of a bankruptcy consultation can contact us today at (507) 387-7200 or visit our website for more information.

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Chapter 13 Bankruptcy Provides Recovery for Full Time Workers in Owatonna, MN

Coming back from bankruptcy as a fully employed worker can feel as difficult and daunting as one dare imagine. A lack of time outside of work, the stress of managing daily life or a family, and the logistics of financial stress can keep you running in place perpetually. The benefits of Chapter 13 bankruptcy are how it allows you to press pause on your debt and create a plan that will give you the space you need to make a full financial recovery. Our Owatonna, MN team at the Behm Law Group can help you navigate your way up the hill and beyond into a relieving new year.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is also known as wage-earner bankruptcy or a “wage-earner plan,” as it can only be claimed by individuals with a consistent income. This may be income from social security, full-time employment, or other sources, but it must be steady. A key part of this type of bankruptcy is how much flexibility plan development allows. You will work side by side with your Behm Law Group support team to create a plan that fits your financial abilities.

Lack of Interest Accrued

A major boon to declaring bankruptcy is that interest, late fees and penalties, which cause debts to be unmanageable outside of bankruptcy, are immediately terminated. Wage-earner bankruptcy can also stop foreclosure proceedings and prevent creditors from demanding higher payments than what the court, the chapter 13 trustee and your attorney determine are fair. After developing a payment plan, individuals will have between three to five years to make their predetermined payments.

The process of developing a monthly plan is coordinated between our lawyers and you. If you are looking for a bankruptcy recovery plan that can be precisely catered to your situation, wage-earner bankruptcy might be the solution you need.

For more information about Chapter 13 bankruptcy or the other ways Behm Law Group can support your recovery in Owatonna, MN, contact us today at (507) 387-7200 or visit our website.

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Navigating Debt Reorganization Bankruptcy for Businesses in Waseca, MN.

Facing overwhelming debt is beyond daunting in our current economy. For many businesses in Waseca, MN, however, debt reorganization bankruptcy may offer a path towards financial recovery. The debt reorganization process allows debtors to restructure their debts, develop a manageable repayment plan, and regain control over their financial future. If you’re a business owner struggling with bankruptcy recovery, the Behm Law Group is here to offer support and counsel throughout the reorganization process.

Debt Reorganization Bankruptcy

Reorganization bankruptcy is a structured and court-supervised approach to debt relief. It is particularly well-suited for business owners who are hoping to continue operations while addressing their debt issues. If you survive on your business, this method of bankruptcy will give you an opportunity to catch up on missed rental payments, loans, or other secured debts without risking company operations.

Stopping the Calls

This process comes with the added benefit of stopping the calls from debtors and giving you room to breathe, so to speak. Once you file, you have a few months to craft a repayment plan with your legal team and advisors. It’s a legal way to press pause without losing the business you’ve built.

Limitations

Debt reorganization bankruptcy does come with limitations. If your business is struggling to make ends meet, you may still be advised to sell off assets or liquidate your business, even if it’s not explicitly required by the court. The ultimate goal may be to pay off your debt without losing your current assets outright, but if it’s not financially possible to do so, other strategies will be employed.

Making the Right Choice

If you’re not sure if debt reorganization bankruptcy is the right choice for you and your business, be sure to consult with a lawyer before filing. Making a snap decision about the type of bankruptcy that applies to your situation can lead to unexpected legal pitfalls. The legal team at Behm Law Group can help you understand the pros and cons of each bankruptcy type and bankruptcy recovery to guide you towards a complete financial recovery.

Business owners large and small in the Waseca, MN area can contact Behm Law Group today for bankruptcy recovery consultations. Make an appointment by calling (507) 387-7200 or by visiting our website to find out more information.

 

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Chapter 7 Bankruptcy Helps in Reconstructing Your Future in Mankato, MN

Rebuilding your future after Chapter 7 bankruptcy is a journey that requires resilience, determination, and no small amount of professional expertise. Though it’s the most common type of bankruptcy, Chapter 7 bankruptcy is different for everyone. That’s why it’s essential to find a bankruptcy lawyer who will closely review your individual case and personalize your guidance. Behm Law Group wants all Mankato, MN residents to know that with the right mindset and individualized support, anyone can navigate beyond bankruptcy and on towards a brighter future.

Bankruptcy Recovery

Chapter 7 bankruptcy recovery addresses immediate financial concerns and lays the groundwork for long-term stability. It’s a chance to assess financial habits, reevaluate priorities, and make informed decisions to avoid similar pitfalls in the future. Individually speaking, your journey might begin with creating a budget, developing a savings plan, or focusing on rebuilding credit, but practically speaking, there’s a lot of paperwork and bankruptcy court filings to get through before recovery can really begin.

Chapter 7 Bankruptcy Lawyers

The Chapter 7 bankruptcy lawyers with Behm Law Group can help you handle the most overwhelming parts of the bankruptcy process. We offer guidance for everything from reviewing forms and submitting paperwork to ensuring that your assets are accounted for and protected as much as possible. You can rely on us to lead you through the entire court process and make legal decisions that will best support you going forward.

The hardest part of bankruptcy is often the tedious nature of gathering the requisite documentation. When you’re in the midst of trying to manage a new financial reality, keeping your paperwork organized can feel like half the battle. Let our bankruptcy attorneys shoulder some of the burden and walk you through what you’ll need to come out on the other side.

Rebuilding after bankruptcy isn’t just about numbers; it’s about rebuilding confidence and setting new goals. Patience and persistence are key, as recovery takes time. Mankato, MN area residents who are considering Chapter 7 bankruptcy or are in need of bankruptcy recovery support can reach out to Behm Law Group today to consult with our bankruptcy team. We’re here to help. Contact us today at (507) 387-7200 or visit our website to find out more.

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Risks of Bankruptcy in Waseca, MN: When Your Spouse Is Liable for Your Business Debt

Any business venture comes with some risk. Most businesses don’t become profitable for at least two years. Unfortunately, about 20% of new businesses fail within two years; 45% fail within five years; and 65% fail within ten years of opening. There are many reasons why businesses fail, from low financing to overly rapid expansion, but the majority of business failure happens because of a complex combination of factors. If you’re facing business debt you know you cannot repay, it may be time to consider taking more direct actions to resolve those financial issues.  Bankruptcy can greatly aid your financial recovery. You need to know what the risks of bankruptcy are.

Risks of Bankruptcy

Bankruptcy is one way many businesses recover from overbearing debt, either in a reorganization bankruptcy that allows the business operations to continue, or with a liquidation case that cuts their losses and closes the company. If you own your business as a sole proprietor or a partnership, Chapter 13 bankruptcy could be the best choice for restructuring your company and personal debts into a repayment plan. If your business is a limited liability or a corporation, and you are ready to liquidate and shut down operations, Chapter 7 bankruptcy might be the best answer. Behm Law Group Ltd. can help individuals and small businesses filing for Chapter 13 or 7. Our attorneys provide legal protection and guidance throughout your case, including giving important information about the benefits and risks of bankruptcy in Waseca, MN, and the surrounding area.

In the Risks of Bankruptcy Usually Benefits Outweigh Risks

In most situations, the benefits far outweigh the risks of bankruptcy if you’re in the right circumstances to file an individual or business case. However, the structure of your business determines who is responsible for the business debt included in your case. In some instances, you and your spouse may both be personally liable for business debts.

First, you are always responsible for your business debt if your company is a sole proprietorship or if you are a general partner in a business. If this is the case, your personal and business debts would be included together in your bankruptcy.

Business Debts is

If you and your spouse own a business together and the business is structured as a partnership, both the individual debts for you and your spouse and the business partnership debts would need to be included in a Chapter 7 or Chapter 13 bankruptcy case.  Another example where you and your spouse would be personally liable for business debts in a bankruptcy case is if your business is a corporation and you and your spouse signed personal guarantees with the creditors. In this case, even if your business is organized as a limited liability company or a corporation, you and your spouse would be personally liable for any business debts.

Summary

For more information about why the benefits often overrule the risks of bankruptcy in Waseca, MN, and the local region, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

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Mississippi Delta Farmers’ Lawsuit and the Complexities of the Bankruptcy Code in Windom, MN

For individual consumers and businesses, several different types of bankruptcy are available. Individuals can file Chapter 7 liquidation cases that discharge debt in exchange for the sale of non-exempt property (in most cases, a person’s property is fully exempt and one does not lose property), or they can file Chapter 13 reorganization cases that restructure debts into a 3 to 5 year manageable repayment plan fitting their particular income and reasonable and necessary living expenses. Individuals who gain the majority of their income from a family-run farming or fishing operation can also file Chapter 12 reorganization bankruptcy. You need help with the complex bankruptcy code.

 

This bankruptcy is similar to Chapter 13, but offers some benefits specific to family farmers and fishers. All types of businesses can file Chapter 7 liquidation, but this chapter generally forces the company to shut down operations. To file bankruptcy and maintain business operations, sole proprietorships or partnerships can file Chapter 13, while limited liability companies and corporations can use Chapter 11 reorganization to repay their debts in a structured plan. For Chapter 7, 12, and 13 in Windom, MN, and the local region, Behm Law Group Ltd. provides trusted legal protection and guidance through the complex bankruptcy code.

Chapter 11 Case

Not only does the bankruptcy code affect the filer, attorney, and court process, it can also impact other third parties involved, especially in large Chapter 11 cases. One recent example of a complicated situation came with the Chapter 11 bankruptcy of Express Grain, a Mississippi-based grain elevator and biodiesel refinery.

Bankruptcy Code

Express Grain was forced into an involuntary bankruptcy by UMB Bank due to its $70 million in loans. The bank is collecting grain harvest sales proceeds as collateral for the debt. However, there are many farmers who sold their grains to the Express Grain and have not yet been paid. In cases like this, farmers are often not paid for their labor and harvest until after the collateral grain silos are liquidated. The problem is that the farmers cannot sue Express Grain due to its September 2021 bankruptcy petition.

Rather than take action against Express Grain, three farmers (representing almost 100 farms across the Mississippi Delta) named as plaintiffs have filed a class action lawsuit against UMB Bank. The farmers’ lawsuit claims that the bank was well aware of Express Grain’s significant debt and potential collapse, but kept the agricultural company afloat through the 2021 harvest season in loans.

Bankruptcy Code Used by Express Grain

When the season ended, the bank forced Express Grain into bankruptcy while its grain silos were full. This meant the bank could liquidate the full silos for a much better repayment than it would receive if it had not supported Express Grain through the harvest. Express Grain was also able to mislead farms in the region of its financial stability by using UMB Bank loans to pay salespeople to convince farmers across the Mississippi Delta to sell their harvested crops to it.

Summary

No matter what the outcomes of this lawsuit and the bankruptcy will be, the situation has impacted the lives of many family farmers. To learn more about how farmers can use the bankruptcy code in Windom, MN, to their benefit, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

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Picking the Best Time to File a Chapter 7 Liquidation Bankruptcy in Jackson, MN

There are several ways in our economic system to find permanent relief from debts that are significantly compromising your quality of life. These solutions range from working out an agreement with your creditors to filing for court-administered bankruptcy relief. If you have the right kinds of debt and your income isn’t meeting your expenses, bankruptcy might be the most effective and fastest way to permanently rid yourself of several burdensome financial obligations that you will never be able to repay. For anyone considering filing a liquidation Chapter 7 bankruptcy in Jackson, MN or the surrounding areas, Behm Law Group, Ltd. can help. Our attorneys will work with you every step of the way, from the filing of your petition to the issuance of your discharge order by the bankruptcy court.

Liquidation Bankruptcy

Liquidation bankruptcy is also known as Chapter 7 bankruptcy. This chapter works to discharge your debts in exchange for the sale, or liquidation, of your non-exempt assets. However, it is rare that you lose property in a Chapter 7 case because most filers are able to protect important belongings like their home, primary vehicle, appliances, and furniture, from liquidation by asserting the available bankruptcy exemptions. Each state offers a different selection of exemptions in varying amounts. In Minnesota, filers can choose between federal exemptions propounded under the bankruptcy code or exemptions propounded under Minnesota state law.  They cannot mix and match between the two.

Learn more about qualifying for Chapter 7.

Generally speaking, if some or all of the following are true, it’s a good time for you to file for bankruptcy relief:

  • Your dischargeable debt is $10,000 or more
  • Your credit score is 600 or below
  • Your property doesn’t have much value
  • Your house is about to be foreclosed on
  • Creditors are threatening wage garnishment, or threatening a levy on your bank accounts or threatening starting a lawsuit against you
  • You would pass the Means Test with your income-to-debt ratio
  • You wouldn’t be able to make your monthly debt payments and materially reduce your debt within the next year
  • Your vehicle is about to be repossessed
  • Your electricity is about to be shut off

Liquidation in Chapter 7 Bankruptcy

While a Chapter 7 case might be highly beneficial for finding debt relief, if these conditions describe your situation, there might be circumstances that make it best to wait to file your case. If the following is true, you may want to hold off on filing a case for the time being:

  • Your income recently increased. The court will examine your last six (6) months of employment and income.  If your income is high, you may not qualify for chapter 7 bankruptcy relief.  However, if you have had high income and you were recently laid off, you may be able to qualify for chapter 7 bankruptcy relief by simply waiting a few months.  If you have low income during most of the six (6) month look-back period, you will be more likely to qualify for chapter 7 bankruptcy relief.
  • You can’t protect assets with the bankruptcy exemptions.  Depending on the exemption format you need to use, there may not be an exemption for an asset that you have.   For instance, presume you recently received either an inheritance of $10,000.00 or a tax refund of $10,000.00 and you need to use the Minnesota state exemptions.  Generally, one is not able to fully protect such assets with the Minnesota state exemptions.  Sometimes, it is necessary for you to spend down such assets on food, furniture, vehicle repairs, home repairs, medical costs or other necessities before you file for Chapter 7 bankruptcy relief. In such a case, you absolutely need to keep receipts for how you deploy or use the money.  The trustee administering your bankruptcy case will ask you about how you used the money and you will want to have supporting documentation.   You must not repay debts to friends or relatives or buy things for friends or relatives or transfer assets out of your name.
  • You predict you’ll have more debt in the near future. If you know you’ll have to take out another pay day loan or incur more utility debt or have significant medical expenses that you won’t be able to pay in the near future, you may want to wait to file for Chapter 7 bankruptcy relief.  You can only qualify for Chapter 7 bankruptcy relief once every eight (8) years.  It would be counter-productive for you to file for bankruptcy relief and discharge the debts you presently have and then, after your case concluded, incur new debts and be burdened with those debts for a full eight (8) years until you are able to qualify for Chapter 7 bankruptcy relief again.

Summary

If you’re wondering when the best time would be to file for liquidation Chapter 7 bankruptcy in Jackson, MN, Behm Law Group, Ltd. can help you prepare. Contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

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Stopping Wage Garnishment with Chapter 7 Bankruptcy in Mankato, MN

Dealing with debts you can’t consistently pay off each month can be one of the most stressful situations for individuals and households to face. Whether you’ve accrued debt from your mortgage, car loan, and credit cards, or had unexpected medical expenses, job losses, and other circumstances, those financial obligations can seriously compromise your quality of life. There are ways to deal with debts outside of routine repayment, including debt relief programs, consolidation, and other types of settlement. These options might be workable for very few people in certain situations.  More often than not, however, they are very risky, slow, costly, and ineffective and will only postpone an eventual bankruptcy filing.  In fact, filing for individual consumer bankruptcy may be the most direct and reliable and permanent way to resolve debts through a government-sanctioned process. Additionally, if you are facing creditors who are threatening actions like foreclosing on your home or wage garnishment, filing for bankruptcy can quickly put a halt to those dangers. Behm Law Group, Ltd. can help you determine if filing for Chapter 7 bankruptcy in Mankato, MN and the local region is the right choice for your financial circumstances. Our attorneys will support and guide you every step of the way to find permanent debt relief through the filing of a bankruptcy case.

Chapter 7 Bankrupcty

If you are behind on debt payments, utility bills, and even medical expenses, creditors can garnish your wages by filing a lawsuit and getting a money judgment in court. Some creditors, like those to whom you owe student loans, taxes, or child support, can even garnish wages and levy on your bank accounts without court action. Generally, there are limits to how much creditors can garnish. State law regulates garnishment activities for judgment creditors, student loan collectors, tax authorities, and child support collectors.

Chapter 7 Bankruptcy helps with Debts

Through Chapter 7 bankruptcy, debts like credit card bills, medical debts, mortgages, car loans, personal loans and many other debts can all be permanently discharged. Filing for bankruptcy will also give you the benefit of the automatic stay. The automatic stay injunctive mandates of 11 U.S.C. §362 prevent your creditors from engaging in collection activities while your bankruptcy case is being processed. This means that you won’t have to continue making debt payments, that the foreclosure proceedings on your house will be stopped, and any wage garnishment activities will cease.

A general exception to the automatic stay is child support collection activity. If your child support creditors are garnishing your wages, they will generally be allowed to continue even after your bankruptcy case is filed when the automatic stay is in effect.  Secured creditors – creditors who have debts that are secured by some of your property (mortgage lenders, vehicle lenders, etc.) — can request the lifting of the automatic stay  if they believe that the property securing their debts will either greatly depreciate in value or be severely damaged during the bankruptcy process.  However, the court will only grant the request after conducting a formal hearing and only if a creditor can show “good cause”.

Summary

Filing for bankruptcy is the quickest and most effective way to stop wage garnishments and other creditor actions, but it might not be the right choice for everyone. To learn more about Chapter 7 bankruptcy in Mankato, MN and whether your overall financial condition will benefit from the process, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

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How Unsecured Debt is Handled with Chapter 13 Bankruptcy in Redwood Falls, MN

If you’re facing debt you can’t repay, you might have considered some debt resolution options like one on one settlements with your creditors, a relief program, or debt consolidation. These options can be effective in relieving your debts in a few ways but none is as quick, reliable, efficient and permanent as a bankruptcy case. Filing for bankruptcy might seem like a last resort choice, but it’s actually a highly effective process that helps thousands of households find permanent financial stability in the U.S. annually. For individual consumers or spouses filing jointly, there are mainly two kinds of bankruptcy cases that can be used to handle debts. The most common type is Chapter 7 bankruptcy, which discharges your debts in exchange for the liquidation of your non-exempt assets. If your debt-to-income ratio does not pass the requirements set by the bankruptcy Means Test (if your household income is higher than the Minnesota median or average income for a similarly-sized household), you can file a Chapter 13 case instead. Chapter 13 works to reorganize your debts into a manageable repayment plan. Behm Law Group, Ltd. offers legal guidance and protection for anyone working through Chapter 13 bankruptcy in Redwood Falls, MN and the surrounding area.

Chapter 13 Bankruptcy

A Chapter 13 repayment plan lasts three to five years, a period that’s determined by your income. Secured debts like mortgages, car loans, and other debts tied to properties or liens are repaid in full under adjusted and more favorable terms.  Also, priority debts like child support, alimony, criminal fines and penalties and tax debts are fully paid over three to five years with no interest.  Your unsecured debts like credit card debts, medical bills, bounced checks, old utility bills, past due rent and personal loans, will be only partially paid anywhere from 0-50% and, generally, they will not be paid with interest.  The amount that is paid to the unsecured creditors included in your plan will be dictated by your disposable income (income not necessary to cover your reasonable and necessary monthly living expenses), the length of your chapter 13 plan and the best interests of your creditors.

Disposable Income

In any chapter 13 bankruptcy case, you and your bankruptcy lawyer prepare a monthly budget.  The budget will address all your ordinary monthly living expenses, such as food, mortgage payments, vehicle loan payments, children’s tuition expenses, gasoline for your vehicle, vehicle insurance, homeowners’ insurance, home repairs, recreational expenses, charitable contributions and many other expenses.  However, in chapter 13 you are not allowed to utilize/practice the same budgetary habits that you employed before and which may have helped cause your financial problems.  Your claimed monthly living expenses are viewed through and limited by the “reasonable and necessary” test.  In other words, your living expenses must be reasonable and they must be necessary for you and your family to live comfortably without causing undo prejudice to your creditors.  For instance, living expenses such as food, mortgage payments, vehicle loan payments would be reasonable and necessary.  Expenses such as monthly motorcycle payments, payments for boats, snowmobiles, motor homes and other non-essential luxuries would not be reasonable and necessary. Any remaining income after your reasonable and necessary living expenses are paid is considered “disposable,” and you are required to use that income to repay unsecured creditors in your Chapter 13 plan every month. In this way your income determines the amount your unsecured creditors will receive.  If your income changes during your repayment period, you and your attorney may need to make plan adjustments to either increase or decrease your plan payments.

Best Interests of Creditors

The other aspect of your financial circumstances that will determine the overall amount your unsecured creditors receive is “the best interests of the creditors” test.  With every chapter 13 case, the attorney must conduct a “liquidation analysis” of your financial situation.  Essentially, the attorney must look at your case from the perspective of a hypothetical chapter 7 case filing.  The attorney must determine the total value of all your property.  The attorney must determine how much of that property you would be able to protect with the available bankruptcy exemptions.  And, the attorney must figure out how much of your property would be non-exempt or surrendered in a chapter 7 proceeding.  For instance, presume $10,000 worth of property would be non-exempt or surrendered in a hypothetical chapter 7 case.  To satisfy the “best interests of the creditors” test in a chapter 13 case, your unsecured creditors would have to receive at least $10,000 over the three-to five-year chapter 13 plan repayment period.

If this test is not satisfied, a chapter 13 repayment plan can not be approved by the bankruptcy court and the chapter 13 case will be dismissed.

If you’re filing for Chapter 13 bankruptcy in Redwood Falls, MN or the local region, contact Behm Law Group, Ltd. today at (507) 387-7200 or email stephen@mankatobankruptcy.com for more information.