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

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

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

Who are they?

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

What do they do?

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

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

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

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

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

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

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

Lawsuit Money With Chapter 7

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

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

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

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

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

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

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

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

Steps in Filing for Emergency Bankruptcy:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Non-Exempt Pensions

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

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

Automatically-Excluded Pensions

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

Automatically-excluded pensions include the following:

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

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

Getting Rid of Tax Debts with Chapter 7 Bankruptcy in Mankato, MN

Tax debts are a common problem for most struggling with accumulated financial burdens. Because taxes are so varied and ultimately required of every U.S. citizen able to work and own property, the debts associated with taxes are equally varied and unavoidable. While most of the time you cannot discharge tax debts with bankruptcy, there are times when it’s possible to treat those debts with Chapter 7 bankruptcy. Behm Law Group, Ltd. can help you determine if and how your tax debts can be cleared when filing for bankruptcy in Mankato, MN.

Although possible, it can be difficult to discharge your tax debts with bankruptcy. Only when your case meets several requirements can your tax debts be discharged.

Requirements for Discharging Tax Debts:

  1. Your tax debts must be income tax debts. While you may have several other types of tax debts, only your income tax debts can be discharged with Chapter 7 bankruptcy.
  2. Your tax debts must be three or more years old. If your tax debt was due at least three years before you petition for bankruptcy, these debts can be considered for discharge.
  3. You must have filed a return for your tax debt at least two years prior to filing your bankruptcy petition. This return must have been filed on time, your extensions cannot have expired at the time of filing, and the IRS cannot have filed a substitute return for you.
  4. You cannot have committed any purposeful fraud or evasion on your tax return at the time of the incurred tax debt. If courts determine you have used any means of illegal tax fraud, you cannot qualify for tax debt discharge.
  5. You must have your tax debt examined by the IRS 240 days before filing for Chapter 7 bankruptcy. This is called the 240-day rule, and is designed to determine whether your tax debt qualifies for discharge based on the previously listed rules. Your tax debt may also qualify for the 240-day rule if it has not yet been assessed before the time of your bankruptcy petition.

If, and only if, your tax debts meet ALL of these conditions can they be discharged with Chapter 7 bankruptcy. If you’re planning on filing for bankruptcy to rid yourself of primarily tax debts, be aware of the strict conditions. Behm Law Group, Ltd. can help you through the process of filing for Chapter 7 bankruptcy in Mankato, MN. Contact us today at (507) 387-7200 for more information.

What to Do When Creditors Harass You After Your Chapter 7 Debt Settlement in Windom, MN

Those who have accumulated debts they can’t handle alone often find rescue in filing for bankruptcy. Today’s U.S. Bankruptcy Code is designed to protect individuals and businesses from falling into even more critical financial situations. The idea of being bankrupt can leave a bad taste in one’s mouth and, while one might not enjoy having to go through bankruptcy process, there are many benefits. Filing for Chapter 7 bankruptcy alleviates debt and opens the door to a fresh start financially. Behm Law Group, Ltd. can help you through the process of filing for bankruptcy and completing your debt settlement in Windom, MN.

Chapter 7 bankruptcy is designed to discharge the majority of your debts and allow you to retain your assets. With this form of bankruptcy, you will have a clear beginning, middle, and end of the process.

Do debts still matter?

When you file for Chapter 7 bankruptcy, your debts are addressed, and when the process is over, your debts won’t come back into your life. They are permanently discharged.  The only lingering effect of Chapter 7 bankruptcy is that your case will stay on your public credit profile for 3 to 6 years. After filing for Chapter 7, the debts that were discharged are gone forever.  You will not have to handle other financial consequences from the debts discharged in your case.  Paradoxically, you will be more of an attractive credit risk for creditors than you were before your case was filed.  This is because future creditors know that the creditors discharged in your bankruptcy are gone for good and that they will now be able to be first in line for payment from you going forward and will not have to be in competition with your previous creditors.

In short, the debts addressed in a Chapter 7 case don’t matter anymore. You don’t continue making payments, and you won’t be in contact with your creditors again.

Why are my creditors still harassing me?

But if your debts don’t matter after you file for Chapter 7 bankruptcy, why are your creditors still in contact with you, and in many cases, still harassing you? There are several reasons why this might be happening. Most of the time, your creditors haven’t heard that you’ve entered into the bankruptcy process yet. Even if your case is not completed, your creditors are legally obligated to stall collections. However, it can take up to two weeks for your creditors to be notified that you’ve entered into the process. If it’s been over two weeks and your creditors are still harassing you, they may be trying to get away with illegal collections. Creditors may try to take advantage of your lack of knowledge about the nuances of bankruptcy by telling you that you filed for the wrong kind of bankruptcy, that your debts aren’t covered by your case, or that you still have to pay interest on a settled debt. Behm Law Group attorneys protect our clients from this fraudulent behavior as we work with you through the bankruptcy process.

If you’re considering filing for Chapter 7 bankruptcy and you’re concerned about your debt settlement in Windom, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today for a consultation.

How Filing for Chapter 7 Bankruptcy in Waseca, MN, Affects Types of Small Business Ownership

Small business owners are some of the bravest adventurers when it comes to finances. Not only does starting a small business often require a large investment in the form of a loan or personal funds, but the liabilities of starting and maintaining a small business are numerous. Sadly, many entrepreneurs are unable to keep expenses balanced with revenue, especially during the first few years of a startup. Although bankruptcy is a common occurrence for small businesses, the outcome of bankruptcy will change depending on the type of business and the ownership status. At Behm Law Group, Ltd., our attorneys work to protect small business owners throughout the process of filing for Chapter 7 Bankruptcy in Waseca, MN.

For most small businesses, there are three main forms of ownership. Each type of ownership is affected differently when the business enters the process of Chapter 7 bankruptcy:

  • Sole: If you own your business, you are the sole proprietor. As a sole proprietor, your finances are linked with your business finances. If your business (or you) are over your head in debt, you can only petition for a personal case of Chapter 7 bankruptcy. It’s not possible for your business to file for bankruptcy alone because there is no separate, distinct business entity apart of you, so the process must combine your personal and business debt into one case. You can, however, prevent many of your assets from being liquidated with your bankruptcy exemptions.
  • Partner: If your business is a partnership, it still is not a separate entity from you and your partner’s personal finances. When filing for a Chapter 7 partnership business case, the process is not really any different from a personal case. In partnership business bankruptcy, the partnership debts are collectible against you and all partners personally and your personal assets must also be listed in the bankruptcy petition.  However, you can still protect your personal assets with your bankruptcy exemptions.
  • Corporations and LLCs: A business owned as a corporation or an LLC is a separate and distinct legal entity from you and, therefore, it must file for a separate business bankruptcy.  In such a bankruptcy, however, there are no exemptions that can benefit the corporation or LLC. The trustee handles liquidation for corporations and LLCs. If your business is an LLC, you are required to eliminate any of your own debts with a personal bankruptcy case before filing a business case.

Filing for bankruptcy can give you the financial relief you need when there are no other options. For more information about filing as a small business for Chapter 7 bankruptcy in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200.

What, When, and Why With the Wildcard Exemption When Filing for Chapter 7 Bankruptcy in Fairmont, MN

When it comes to Chapter 7 bankruptcy, the idea established with the bankruptcy code was to find a balance between the discharging or getting rid of one’s debts and allowing one to retain enough assets to reorganize and not endure further financial hardship.  Indeed, it would not make much sense and it would not be of any public benefit to take all of a one’s assets.  In such a case, the person would only continue to struggle and could not get back one’s feet.  Certain precautions and allowances have been set in place to protect a person against complete destitution after Chapter 7 bankruptcy. Exemptions for qualifying properties are the saving grace for someone who files for bankruptcy relief. At Behm Law Group, Ltd., we can work with you to determine which exemptions would apply to your particular circumstances when filing for bankruptcy in Fairmont, MN.

There are several kinds of exemptions that you can use when filing for bankruptcy relief.  There are exemptions provided by the laws of the State of Minnesota and there are exemptions provided by the bankruptcy code. One exemption that allows you to protect certain assets from liquidation is the wildcard exemption.

What is the wildcard exemption?

When you file for bankruptcy relief, there are several exemptions that apply to specific types of property to prevent liquidation of those assets (e.g. homestead exemption or motor vehicle exemption). The wildcard exemption is a non-specific exemption that you can use to protect one or more assets from among several types of properties.  It is a spill-over or catch-all exemption that allows you to retain miscellaneous property for which there may not be a specific exemption.  In addition, it can allow you to double up on property. For instance if you own 2 vehicles, you could use the motor vehicle exemption to protect the first vehicle and the wildcard exemption to protect the second vehicle.  Alternatively, you could use the wildcard exemption to protect an asset, such as a snowmobile or a boat or a weapon, where there is no specific exemption that can be used to protect it.

When can you use the wildcard exemption?

Because the Minnesota exemption laws do not have a wildcard exemption, a bankruptcy filer can only use the wildcard exemption if one chooses the bankruptcy exemptions provided under the bankruptcy code. The current federal wildcard exemption amount is set at $1,250, but can change based on application. For example, when used in combination with one’s homestead exemption, one may use the federal wildcard exemption amount plus up to $11,850 of one’s unused homestead exemption amount for a total of $13,100.  One can use the wildcard exemption on any one item of property or one can split the amount between multiple items of property.

For example: If one owns a car worth $4,000, and one does not owe anything on the car, one’s equity is $4,000.  In this case, one could use the motor vehicle exemption of 11 U.S.C. §522(d)(2) to protect $3,775 of this amount and then use part of the wildcard exemption of 11 U.S.C. §522(d)(5) to protect the other $225.  Also, if one has a second car worth $5,000, one can use an additional amount of the wildcard exemption of 11 U.S.C. §522(d)(5) to protect it, too.

Why does the wildcard exemption exist?

The bankruptcy exemptions, including the wildcard exemption, were put in place to protect US citizens from irreparable loss and destitution. In the long run, allowing bankrupt individuals to keep assets with which to reorganize will in turn prevent unemployment from growing and keep the economy from falling.

For more information about filing for Chapter 7 bankruptcy in Fairmont, MN, and how exemptions can help you keep your property, contact Behm Law Group, Ltd. at (507) 387-7200.

Motor Vehicle Exemptions and Keeping Your Vehicle When Filing for Chapter 7 Bankruptcy Relief in Redwood Falls, MN

At Behm Law Group, Ltd., we have often found that our clients considering bankruptcy know they could benefit from filing for Chapter 7 but balk at the idea of possibly losing some of their assets.  However, the concern about losing assets is often exaggerated.  The drafters of the bankruptcy code understood the need for households to hold on to some of their assets to prevent the bankruptcy process from doing more harm than good and to allow people to retain assets with which to reorganize their lives and maintain their financial security.  Thus, the drafters of the bankruptcy code included various exemption laws, which are very generous, that allow people to retain assets in bankruptcy. Behm Law Group, Ltd. can help you work through the process of filing for bankruptcy in Redwood Falls, MN, including identifying which exemptions can be applied to your case.

One major concern of those entering into the process of Chapter 7 bankruptcy is the potential loss of their motor vehicle.  For many families and individuals, the loss of a vehicle means the loss of any means of transportation.  However, 11 U.S.C. § 522(d)(2) of the bankruptcy code allows for the exemption or retention of a motor vehicle. It is more accurate to state that the exemption allows the retention of an equitable interest in a motor vehicle rather than the retention of the vehicle itself.

The exemptible equity in your car is determined by its current market value balanced with the amount of your car loan. For example, if you own a car worth $5,000 and have a loan balance of $2,000, your motor vehicle equity is $3,000.  This $3,000.00 would constitute equitable interest that would be protected by or exempted with the applicable bankruptcy exemption.   It is possible to have $0 in equity if your loan is equal to the value of your car and it is possible to have a negative equity if your loan is greater than the value of your car. For instance, if your car is worth $5,000.00 and there is a $5,000.00 or $6,000.00 loan against it there would be no equity to protect or exempt with the applicable bankruptcy exemption.

Federal Exemption

The Federal motor vehicle exemption of 11 U.S.C. § 522(d)(2), among other federal exemptions, changes every three years according to economic conditions and other factors. The current motor vehicle exemption amount is $3,775.  This means that if you have equity in your car less than the exemption amount, the bankruptcy trustee administering your bankruptcy case would not be able to take your motor vehicle, sell it and use the sale proceeds to pay a dividend your creditors.

Minnesota Exemption

In Minnesota, those filing for Chapter 7 bankruptcy have the option of choosing either the federal exemptions or the Minnesota exemptions. The Minnesota motor vehicle exemption clocks in at a maximum of $4,600 in equity. The amount increases up to $46,000 for vehicles that accommodate physical disabilities and are eligible for handicapped parking spaces (but only if changes made to the vehicle are more than $3,450).

The bankruptcy exemption laws are designed to help you find ways to keep your motor vehicle and other assets, even if you file for Chapter 7 bankruptcy relief. For more information about exemptions you may qualify for and for help with filing for bankruptcy relief in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.