How Case Issues are Handled in Court When Filing for Bankruptcy in New Ulm, MN

Individual consumers and businesses that are unable to meet monthly payments on loans and other debts for several months have few options for relief and recovery from these financial struggles. For many, debt relief outside of legal action doesn’t solve financial problems or reverse unwise decisions long-term. If you’re finding it impossible to make payments on your debts, filing for bankruptcy might be your best option.  Behm Law Group, Ltd. offers the professional legal advice you need to navigate complicated courts systems and the process of filing for bankruptcy in New Ulm, MN.

 

A critical responsibility of bankruptcy attorneys is to hold a deep knowledge of the legal intricacies of bankruptcy and an astute understanding of how the bankruptcy court works. Because Behm attorneys are trained and experienced in bankruptcy law, we can provide our clients insight into the court system and guidance when petitioning for bankruptcy.

 

The Bankruptcy Court

 

The bankruptcy court is a federal court, but it operates separately from other federal courts such as district courts or administrative law courts. This means that, while bankruptcy law is a federal concern, there are various aspects of state law that come into question when a bankruptcy case is filed. These “state vs federal” regulations in bankruptcy vary from state to state, but the majority concern the core issues of a case.

 

Core Issues when Filing for Bankruptcy

When you file for bankruptcy, you can choose from two primary ways the court system has established for handling your debts. You can file for liquidation (commonly Chapter 7 bankruptcy for both individuals and businesses), or debt reorganization (Chapter 13 bankruptcy for individuals and a mixed bag of Chapters 11, 12, and 13 for businesses, farmers and fishing businesses). The core issues involved in all types of bankruptcy cases include the major factors that determine the outcome of your case including income, debt value, property value, exemption amounts, types of debts, reorganization plans, creditors, and any other circumstances that directly affect your bankruptcy case.

 

Federal vs. State

 

For most of these core issues, federal law determines how your case is handled depending on which type of bankruptcy you choose. However, a few issues are resolved differently by the state, most notably exemptions. Additionally, non-bankruptcy issues that indirectly affect a bankruptcy case can be resolved by a district judge if the parties involved don’t accept the initial decision of the bankruptcy judge on the matter.

 

If you’re wondering whether filing for bankruptcy is right for you, a consultation with Behm Law Group, Ltd. Behm Law Group, Ltd. can help you make the best decision for your financial situation. Our attorneys can guide you through the process of filing for bankruptcy in New Ulm, MN and provide our knowledge of the inner workings of bankruptcy court. For more information about filing for bankruptcy and the counsel we offer, contact us at (507) 387-7200 today.

 

 

Handling Debt Sale When Filing for Bankruptcy in Worthington, MN

When an individual or business fails to meet debt obligations without excuse, they may start to experience more aggressive collection actions from creditors. If you have been struggling to make your debt payments for several months, filing for bankruptcy might be the best option to end creditor harassment and get a fresh financial start. Behm Law Group, Ltd. provides the legal support you need when filing for bankruptcy in Worthington, MN and get optimal results in your case.

 

Generally speaking, when  filing for bankruptcy you’re immediately protected by the automatic stay for the period of time it takes to resolve your case. This means the creditors of the debts that will be handled in your case can’t perform any collection actions. However, things can get complicated when one of your creditors sells one of your debts while you’re filing for bankruptcy or in bankruptcy.

 

A creditor may choose to sell a debt to another creditor at any time, even while you’re in the middle of a bankruptcy case. A creditor might choose to sell the debt if they don’t want to wait for your bankruptcy case to be completed to see if it will get paid anything by the trustee administering your case. By selling your debt, they will receive a small immediate sum, and the buyer of the debt will stand in the place of the original creditor.

 

How does this affect filing for bankruptcy?

 

In most cases, the sale of a debt doesn’t affect your bankruptcy case. Whether you owe a debt to the original creditor or to a debt buyer, you still owe the same amount for that debt. From your perspective, it will be handled in bankruptcy as if there was never a sale. However, the original creditor or the debt buyer must notify the bankruptcy court of the sale so that the party in charge of the debt can receive payments in the event that you file for a Chapter 13 bankruptcy and are scheduled for a three to five-year repayment plan.

 

A debt sale may affect you if the debt in question is discharged or scheduled to be discharged. Because the selling of a debt included in a bankruptcy is an act that is in violation of either the automatic stay injunctive provisions of 11 U.S.C. §362 or the discharge injunctive provisions of 11 U.S.C. §524, you may need to take action if this occurs. For example, presume you have filed for Chapter 7 bankruptcy and your credit card debt was discharged in the process. Presume further that, soon after, you’re contacted by a creditor who claims they bought one of your debts and is attempting to collect payments. In this case, you should provide the creditor with a copy of the Notice of Bankruptcy Filing that was issued by the bankruptcy court when your case was commenced.  If your bankruptcy case has been concluded, you should provide the creditor with a copy of the Discharge Order that the court issued.  If the creditor continues to harass you and continues collection activities, you may be forced to contact your bankruptcy lawyer and sue the creditor in bankruptcy court.

 

The sale of a debt will often not concern you as a filer and is simply business between creditors. To learn more about this process and to receive legal support when filing for bankruptcy in Worthington, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

Understanding Assignment and Bankruptcy in Mankato, MN

Businesses struggling with unmanageable debts have a range of options for debt relief at their hands. While debt consolidation and debt management plans are popular options that’ll keep a debtor’s overall credit in good standings, there are often situations when these debt relief options only act a bandage instead of a true healing process. When you’re unable to pay your debts and don’t have any way of increasing your income in the next few years, filing for bankruptcy is your best option. Behm Law Group, Ltd. offers the legal advice and assistance you need to successfully file for bankruptcy in Mankato, MN.

 

Bankruptcy is designed to help both debtors and creditors out of a sticky situation, but some creditors may try to dissuade you from filing for Chapter 7 bankruptcy and instead liquidate your business outside of court with an assignment process.

 

ABC

 

Assignment for the benefit of creditors (ABC) is an option for business debtors to privately sell assets and return the value of those sales to creditors. When creditors are awarded these sales, they’ll release debtors from payment obligations. This option might be a way to avoid attorney fees and court proceedings, but the process overall is more beneficial to your creditors than to you.

 

Why is Bankruptcy Better?

 

Filing for bankruptcy, despite its effect on your credit, is a better option for business debtors than ABC for a number of reasons:

  1. In bankruptcy, creditors are forced to allow asset liquidation for all dischargeable debts, but in an ABC, they can choose to forgo approval of discharge on debts higher than the secured collateral value. For example, if you owe $5,000 on an auto loan, but the car is only worth $4,500, the creditor would not have to discharge the debt in an ABC.
  2. Unincorporated businesses are not protected during an ABC against creditors seizing the business owners’ personal assets. This means you could be forced to liquidate your personal car or other property in an ABC. In bankruptcy, however, the debts and the assets of incorporated and unincorporated businesses are generally not involved with the liquidation of one’s personal property.
  3. Personal collateral guarantees and other forms of personal security interests on business debts are not removed in an ABC as they would be in bankruptcy. This means if your property was used to secure a loan, creditors can force you to liquidate that property even if it’s not connected to your business in other ways. Bankruptcy allows for exemptions to prevent you from losing your property even if it’s tied to your business debt.

 

ABCs have their benefits, but most of those benefits inure to your creditors. Filing a bankruptcy is the most effective way to remove debt with minimized liability to you and your property. To learn more about the advantages of filing for bankruptcy in Mankato, MN and to find out how we can help, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

 

How and Why Your Case is Public When You File for Bankruptcy in Luverne, MN

If you are struggling to make ends meet, filing for bankruptcy might be an effective way to find relief from crippling debt and get a fresh start. Individuals and businesses from a wide range of financial backgrounds can find the bankruptcy chapter that suits their situations and benefit from the process of filing. Behm Law Group, Ltd. offers legal counsel and expert advice and assistance for Chapters 7, 12, and 13 bankruptcy in Luverne, MN.

 

With the help of a Behm bankruptcy attorney, you can build a successful bankruptcy petition that will offer optimal results in a liquidation or reorganization bankruptcy. While a bankruptcy is often a financial success story for most individuals and businesses, it’s important to remember that filing for bankruptcy will affect your credit score and that your bankruptcy filing will become a matter of public record.

 

Bankruptcy case information, along with virtually all other district and appellate court proceedings, is available to the public eye. Cases and most case information are offered through the government-operated system of Public Access to Court Electronic Records (PACER). These electronic records will contain details about your bankruptcy case including dates, documents, parties involved, and more. (This excludes personal information such as social security numbers, dates of birth, and financial account numbers.)

 

While it may be unsettling to individuals and businesses that bankruptcy case information is public, they can take solace in the fact that there are several roadblocks for someone attempting to access that information. For example, the PACER system requires a registration account with extensive information about the registrant, payment by page for case documents, and several other requests along the way for information about the registrant’s reason for accessing a case.

 

Because of these requirements to use the PACER system, most of the users are attorneys, bankruptcy professionals, creditors, and some large businesses. In short, you won’t have to worry about your family, friends, colleagues, or employers accessing information about your bankruptcy case. Most individual cases of bankruptcy fly far under the radar and are, generally, no longer visible on credit reports 5 to 6 years after a case is filed.

 

The ability to maintain control over your finances through a Chapter 13 repayment plan, or the fresh start a successful Chapter 7 case provides will greatly outweigh the fact that your bankruptcy case information is a matter of public record. Even the effect a bankruptcy has on your credit report should not dissuade you from filing if bankruptcy is a viable path to take.

 

To find out if filing for bankruptcy in Luverne, MN, is the right choice to remedy your financial situation or to learn more about the benefits of each bankruptcy type, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

 

 

Cancellation and Charging-Off vs Debt Discharge in Bankruptcy in Marshall, MN

When you enter into a loan agreement, it’s implied and expected you’ll repay the debt in full with interest. However, nobody is perfect. There are many life events that can affect your ability to meet debt obligations, especially when you accumulate several debts over time. If you find yourself unable to make monthly loan payments, you and your creditors are faced with how to resolve that. There are several ways creditors can try to continue collecting a debt and there are several ways for you to relieve that debt. With the help of Behm Law Group, Ltd., filing for bankruptcy in Marshall, MN, can be a viable way to resolve debt issues.

 

The three primary ways a debt issue can be resolved is to cancel a debt, charge-off a debt, or discharge a debt. Debt discharge occurs through the bankruptcy process, but certain types of debt can be cancelled or charged-off. The process of charging-off or cancelling a debt is most often done outside of bankruptcy, but it can be accomplished during a case without significantly affecting the proceedings.

 

Debt Cancellation

 

If you’re unable to repay a debt, a creditor may choose to cancel/write it off. You can negotiate with your creditors to convince them to cancel debts even while you’re in the process of filing for bankruptcy. However, you will be taxed for the amount you owed on the debt because the cancellation of the debt is considered income for tax purposes. For example, if you owed $1,000 on a debt at the time of its cancellation, you will be taxed for that amount. The exception to this is if the debt amount was $600 or less.

 

Charging-Off Debt

 

Creditors can also choose to charge-off a debt if you’re unable to repay it. In this case, the debt record is removed from the creditor’s records and the creditor can either attempt collections in-house or sell the debt to a debt buyer. By selling the debt to a debt buyer, the creditor is able to claim a tax exemption.  You still have the obligation to repay the debt but your obligation is to pay the new debt purchaser instead of the original creditor.

 

Debt Discharge

Choosing to file for bankruptcy may be a difficult decision to make, but the benefits are many. Discharging your debts through bankruptcy is the most effective way to permanently end your repayment obligations without any tax liability. If you have your debts discharged through bankruptcy, you are not taxed on any debt so discharged.   In any event, there is a specific IRS form to be excused from having to file taxes on debt discharged in bankruptcy.

 

Filing for bankruptcy gets a negative reputation, but it’s an effective legal process designed to provide debt relief to individuals and businesses struggling with overwhelming financial burdens. Cancellations and charge-offs both have many catches and will still follow you to tax season.

 

With the help of a quality lawyer, you can file for bankruptcy and successfully discharge debts for good. If you’re considering filing for bankruptcy in Marshall, MN, contact Behm Law Group, Ltd. at (507) 387-7200 for more information about working with our quality bankruptcy attorneys.

Priority vs. Non-Priority Tax Debts When Filing for Bankruptcy in Waseca, MN

The U.S. tax system is complex and affects many aspects of business owners’ and individual consumers’ finances. While intricate and sometimes invasive, taxes are a necessary part of a well-functioning government and economy. Understanding when and where taxes will come into play when you make financial decisions is important to prevent negative consequences such as tax debt. If you are struggling with tax debts along with other severe financial difficulties, bankruptcy might be the right choice. Behm Law Group, Ltd. provides the guidance and counsel you need to successfully file for bankruptcy in Waseca, MN.

 

Tax debts can be accumulated through a wide range of sources from property taxes to income taxes. When you file for bankruptcy, these debts are broken into two primary categories: priority tax debts and non-priority tax debts.

 

Priority Tax Debts

 

The majority of tax debt obligations fall under priority tax debt. This means they generally can’t be discharged the Chapter 7 liquidation process and that they must be paid in full during a Chapter 13 repayment plan. Priority tax debts include income taxes that don’t fall under non-priority requirements, property taxes incurred within a year of filing for bankruptcy, taxes you withheld or collected, some employment taxes, some excise taxes, custom duties, and penalties that have been assessed to any priority taxes.

 

If you file for Chapter 7 bankruptcy, your priority taxes will not be discharged in the process and you must repay them in full after your bankruptcy has concluded. If you file for Chapter 13 bankruptcy, your priority taxes must be included in your 3 to 5-year repayment plan and they must be fully repaid.

 

Non-Priority Tax Debts

 

Any tax debts that are considered non-priority can be discharged in Chapter 7 and Chapter 13 bankruptcy because they will be categorized and handled like all your other non-priority unsecured debts (e.g., credit cards and medical bills). Non-priority tax debts only include income tax debts if they were due at least three years prior to filing, if you filed the return for the tax debt at least two years prior to filing, if the IRS has not assessed your tax liability within 240 days of filing, and if you did not incur the tax debt through fraudulent behavior.

 

In most cases, filing for bankruptcy with the goal of discharging your tax debts can be a complicated and detail-specific process. The majority of your tax debt might not be able to be discharged in either a Chapter 7 case or a Chapter 13 case.  For example, filing for Chapter 13 bankruptcy will not result in the discharge of most priority tax debts, but you will be able to bundle those debt obligations into a manageable three to five-year repayment plan, tailored to your income, in which you will be able to pay them in full and be relieved the associated interest and penalties.

 

If you are considering filing for bankruptcy in Waseca, MN and want to learn more about how your taxes and other debts are handled, contact Behm Law Group, Ltd. at (507) 387-7200.

Action and Advice: The Benefits of a Bankruptcy Attorney in Pipestone, MN

The process of filing for bankruptcy has a poor reputation for its effect on property and long-term damage to credit. The legal process of bankruptcy, however, is designed to help filers emerge from crippling debt with a fresh start and a manageable approach to finances. Whether you choose to file for Chapter 7 or Chapter 13 as an individual consumer or small business, you gain more than counsel when you work with a Behm Law Group, Ltd. bankruptcy attorney in Pipestone, MN.

While it’s possible to file for bankruptcy without the help of a trained legal professional, it’s not advisable unless you have a thorough understanding of the process. Bankruptcy attorneys are invaluable for filing a successful case and navigating the highly nuanced bankruptcy process. Court employees and bankruptcy judges are not able to supply legal advice to non-attorney bankruptcy filers, which makes a bankruptcy attorney your most valuable source of counsel and guidance.

Behm Law Group, Ltd. attorneys are committed to helping our clients navigate through the complexities of bankruptcy. Our goal as bankruptcy attorneys is to work with clients to build a successful case that has as little impact on their quality of life as possible.

To put together a strong and accurate bankruptcy petition and put that case through the wringers of the bankruptcy process, everything must start with the right choices and actions to build a viable foundation.

Actions and Advice with an Attorney

When you work with a Behm attorney, your case starts with wise actions and choices made from training and experience. Our counsel will provide professional guidance and expert advice to help you with the following:

  1. Understanding the process of bankruptcy from start to finish.
  2. Choosing the right type of bankruptcy for your financial situation and the types of debts you hold.
  3. Understanding which debts are discharged and why.
  4. Understanding how creditors and debts are defined.
  5. Completing the necessary standard bankruptcy forms for the chapter you choose.
  6. If necessary, completing specialized forms unique to your case.
  7. Building a repayment plan proposal suited to your financial situation if you file for Chapter 13.
  8. Choosing the most beneficial set of exemptions to claim if you file for Chapter 7.
  9. Protect you from negative creditor action.
  10. Eliminate mistakes and chances for accidental fraud in the highly nuanced workings of bankruptcy.
  11. Work with you from start to finish on your case, no matter what obstacles you meet during your bankruptcy process.
  12. Help you understand the short and long-term consequences of filing for bankruptcy, including effects on your taxes, credit score, and life overall.

Working through a bankruptcy case with the help and protection of an attorney creates positive outcomes that will affect your life and finances for years to come. Start your case with the experience and knowledge of a Behm Law Group, Ltd. bankruptcy attorney in Pipestone, MN, today by contacting us at (507) 387-7200.

Handling a Rental Property When Filing for Bankruptcy in Windom, MN

When filing for bankruptcy, you’ll have to take all your property into consideration. Your home, car, and even expensive jewelry are part of your bankruptcy estate and will be handled according to the exemptions you can claim, the equity in your property, and any additional claims your creditors make. Whether you file for Chapter 7 liquidation bankruptcy or Chapter 13 reorganization bankruptcy, there is a possibility that you might not be able to retain all of your property in the process. With the professional guidance of Behm Law Group, Ltd. attorneys, you can find the optimal solutions to resolving property issues and protecting your property when  filing for bankruptcy in Windom, MN.

One of the biggest concerns for homeowners filing for bankruptcy is whether or not they’ll lose their home in the process. That’s where the homestead exemption comes into play, protecting most homes from liquidation during Chapter 7 bankruptcy. Because debts are restructured in a Chapter 13 case, homeowners generally don’t have to worry about losing their homes in Chapter 13 bankruptcy.

However, there are cases where a filer owns multiple rental properties in addition to one’s principle residence. The homestead exemption you can use to protect your primary residence isn’t applicable to rental properties, so it can be more difficult to keep rental properties when filing for bankruptcy.

Rental Property in Chapter 7

If you have equity on your rental property and its value is higher than the debt you owe, you probably want to hang onto that property. To try and protect your rental property from liquidation during the Chapter 7 filing process, you have to assert an exemption claim. Because you can’t use the homestead exemption, your only choices include a portion of the un-used federal homestead exemption (up to $11,850) and the federal wildcard exemption (adding another $1,250). In Minnesota people can elect to utilize either the state or the federal exemptions, so it’s possible you can protect some value in your rental property depending on its worth versus how much debt is against it. If the value of your rental property is less than the debt against, the trustee will not attempt to liquidate it because the entire value is extinguished by the debt against it.  Essentially, the creditor that holds the mortgage or other secured lien has full and complete rights to it.  Generally, you can keep making mortgage payments on the rental property outside of bankruptcy.

Rental Property in Chapter 13

In Chapter 13, your property debts are reorganized with other applicable debts into a three to five year repayment plan. This means you’ll be able to keep your rental property and continue making the monthly payments on it.  However, you can only do this if there is equity or value in the rental property above the debt you owe against it and the property generates a positive income for you.  In other words, the income you receive from the rental property must exceed the associated monthly expenses (mortgage payment, utility payments, property tax payments, insurance payments, etc.). If the rental property generates negative revenue, however, you will be required to surrender it in Chapter 13. You may also be able to find options to cram down or strip liens off to keep a rental property that generates a negative cash flow.

Find Professional Help When Filing for Bankruptcy

If you’re considering filing for bankruptcy in Windom, MN and own rental property, Behm Law Group, Ltd. can help you work to retain that property during the bankruptcy process. Contact us at (507) 387-7200 for more information about filing for bankruptcy and how our expert bankruptcy attorneys can help you.

 

 

Judgment Liens and Handling Them With a Bankruptcy Lawyer in Fairmont, MN

Filing for bankruptcy is an option available to almost every consumer and business in the US. However, despite the layman’s access to filing for bankruptcy, the fact remains that it is a complex, highly nuanced legal process. While a debt from which a judgment lien is obtained is discharged in a bankruptcy proceeding, a judgment lien can still remain after a bankruptcy is concluded and a bankruptcy filer must take certain steps to fully remove it. This responsibility is best approached with the help of a professional. Behm Law Group, Ltd. offers the counsel of an expert bankruptcy lawyer in Fairmont, MN, throughout your petition.

 

What is a Judgment Lien?

 

In a state civil court case, after a judge or jury hands down a decision, or after a court-approved settlement, a judgment is entered by the court. As part of a typical judgment, the court orders the payment of money from one person to another. But the person who owes the money (the debtor) doesn’t always pay up. A judgment lien is one way to ensure that the person who won the judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to be paid a certain amount of money from proceeds from the sale of a debtor’s property.

 

In Minnesota a judgment lien can attach to any real estate a person has an ownership interest in (farm, house, condominium, etc.).  A judgment lien is automatically entered against any real estate that a debtor (the person against whom the judgment has been assessed) owns in the county in which the judgment was awarded.  If the person owns property in another county, a creditor can take a judgment and docket or file it in that county at which time it becomes a judgment lien against any real estate a debtor owns in that county, too.  A judgment lien can last up to ten (10) years and it can remain a lien on a debtor’s real estate for that entire time.  A judgment lien can also be renewed for successive ten (10) year periods.  If a judgment lien is levied against someone’s real estate, any sale of the real estate can’t be completed unless the judgment lien is paid or expunged/removed.

 

Judgment Liens and Bankruptcy

A discharge obtained through bankruptcy nullifies the debt giving rise to a judgment lien.  However, a discharge does not require a judgment creditor to take affirmative steps to remove a judgment.  In other words, a creditor is not required to go to the county in which it obtained the judgment and ask the court to remove the judgment lien from a debtor’s real estate.  Thus, even after a bankruptcy has concluded, a judgment lien becomes a nuisance lien that still clouds title to a debtor’s real estate and prevents any sale of the real estate from being consummated.

 

In order to remove a judgment lien from the real estate, a debtor must, after the bankruptcy has concluded, file an application to discharge or expunge the judgment lien with the state court in which the judgment and judgment lien were obtained in the first place.  Generally, one can only do this with regard to a judgment lien on real estate that one owns and actually occupies as one’s homestead.  Minn. Stat. §548.181 is the statute that one must use to remove or discharge a judgment from real estate that one owns.  There is a specific protocol that must be followed.  Navigating the procedure and making sure it is done correctly is extremely difficult without the help of a knowledgeable, trained professional. With the help of Behm Law Group, Ltd. and the expertise of a Behm bankruptcy lawyer in Fairmont, MN, filing for bankruptcy can be a successful experience that offers financial recovery. We can assist you with the removal of judgment liens following the completion of a bankruptcy case.  Contact us today at (507) 387-7200 today for more information.

Judgment Liens and Handling Them With a Bankruptcy Lawyer in Fairmont, MN

Filing for bankruptcy is an option available to almost every consumer and business in the US.
However, despite the layman’s access to filing for bankruptcy, the fact remains that it is a
complex, highly nuanced legal process. While a debt from which a judgment lien is obtained is
discharged in a bankruptcy proceeding, a judgment lien can still remain after a bankruptcy is
concluded and a bankruptcy filer must take certain steps to fully remove it. This responsibility is
best approached with the help of a professional. Behm Law Group, Ltd. offers the counsel of an
expert bankruptcy lawyer in Fairmont, MN, throughout your petition.

What is a Judgment Lien?

In a state civil court case, after a judge or jury hands down a decision, or after a court-approved
settlement, a judgment is entered by the court. As part of a typical judgment, the court orders the
payment of money from one person to another. But the person who owes the money (the debtor)
doesn’t always pay up. A judgment lien is one way to ensure that the person who won the
judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to
be paid a certain amount of money from proceeds from the sale of a debtor’s property.

In Minnesota a judgment lien can attach to any real estate a person has an ownership interest in
(farm, house, condominium, etc.). A judgment lien is automatically entered against any real
estate that a debtor (the person against whom the judgment has been assessed) owns in the
county in which the judgment was awarded. If the person owns property in another county, a
creditor can take a judgment and docket or file it in that county at which time it becomes a
judgment lien against any real estate a debtor owns in that county, too. A judgment lien can last
up to ten (10) years and it can remain a lien on a debtor’s real estate for that entire time. A
judgment lien can also be renewed for successive ten (10) year periods. If a judgment lien is
levied against someone’s real estate, any sale of the real estate can’t be completed unless the
judgment lien is paid or expunged/removed.

Judgment Liens and Bankruptcy

A discharge obtained through bankruptcy nullifies the debt giving rise to a judgment lien.
However, a discharge does not require a judgment creditor to take affirmative steps to remove a
judgment. In other words, a creditor is not required to go to the county in which it obtained the
judgment and ask the court to remove the judgment lien from a debtor’s real estate. Thus, even
after a bankruptcy has concluded, a judgment lien becomes a nuisance lien that still clouds title to
a debtor’s real estate and prevents any sale of the real estate from being consummated.

In order to remove a judgment lien from the real estate, a debtor must, after the bankruptcy has
concluded, file an application to discharge or expunge the judgment lien with the state court in
which the judgment and judgment lien were obtained in the first place. Generally, one can only
do this with regard to a judgment lien on real estate that one owns and actually occupies as one’s
homestead. Minn. Stat. §548.181 is the statute that one must use to remove or discharge a
judgment from real estate that one owns. There is a specific protocol that must be followed.

Navigating the procedure and making sure it is done correctly is extremely difficult without the
help of a knowledgeable, trained professional. With the help of Behm Law Group, Ltd. and the
expertise of a Behm bankruptcy lawyer in Fairmont, MN, filing for bankruptcy can be a successful
experience that offers financial recovery. We can assist you with the removal of judgment liens
following the completion of a bankruptcy case. Contact us today at (507) 387-7200 today for
more information.