Posted on

Defining “Undue Hardship” – Bankruptcy Law in Mankato, MN

Mankato, MN Bankruptcy Law with Behm Law Group, Ltd.

Generally speaking, discharging student loans via bankruptcy can difficult endeavor. However, when you’re facing outright bankruptcy—which can be challenging and stressful enough—it can’t hurt to explore all your options. It may surprise some people to learn there is a section of the Bankruptcy Code (11 U.S.C. Sec. 523[a][8]) which addresses student loans specifically. It basically states: “Student loans can be discharged as long as one can show that excepting [excluding] such debt from discharge (debt relief provided through bankruptcy) would impose an undue hardship on the debtor and the debtor’s dependents. Behm Law Group, Ltd. provides professional bankruptcy counsel in Mankato, MN in your time of need.

The key term here is “undue hardship,” a term which only government lawmakers could conjure that sounds ridiculously simple.  However, what constitutes “undue hardship” is a very factually intensive inquiry.  In order to establish “undue hardship”, one must review all of the circumstances surrounding someone’s financial situation.  Serious medical conditions, job losses, the likelihood of being able to get higher paying employment and one’s other living expenses and sources of income are only a few factors that need to be considered.  Discharging student loans in bankruptcy can be done and, indeed, has been done in many cases.

One example of a fact substantiating “undue hardship” is to show you’ve incurred a disability since graduating from college that prevents you from being able to realistically carry out the necessary tasks that are part of any job aligned with your college degree. Let’s say you graduated with a degree in astronomy that requires you to look through a telescope, but after graduating you became permanently blind. You may be able to show and convince a bankruptcy judge that this constitutes “undue hardship.”

If you’re filing for bankruptcy protection, and you’re interested in exploring whether you qualify for a student loan bankruptcy discharge, you should seek out professional bankruptcy counsel. In Mankato, MN and the surrounding communities, Behm Law Group, Ltd. should be your first point of contact when considering your bankruptcy options. We have highly trained bankruptcy attorneys with extensive experience when it comes to making sense of the Bankruptcy Code and how it applies to our clients’ unique situations.

Let us guide you through the bankruptcy process. We know how bankruptcy law works and how it can work for you. Contact Behm Law Group, Ltd. today to discuss your bankruptcy options.

Posted on

Beware Fraudulent Transfers | Bankruptcy Law Tips

Minnesota Bankruptcy Lawyers at Behm Law Group Ltd.

If you wish to keep your friends and family members in your good graces, don’t attempt to transfer property to them if you anticipate filing for bankruptcy within the next two years and they don’t pay you a reasonable market value for the property. Embarking on such a path may be considered fraudulent and could result in your friends or relatives being sued to give up that undervalued property. They’d be out whatever money they paid you plus the property they thought was theirs.

According to 11 U.S.C. Sec. 548, a bankruptcy trustee can sue individuals who purchased property, such as a vehicle, from the debtor who received substantially less than equivalent return value. Therefore, if a debtor sold a vehicle or similar property worth, say, $15,000, to a friend or family member, but only received $3,000 in compensation, and that transfer took place within two years before the debtor filed bankruptcy, the trustee could sue to reclaim that property in order to sell it for a more accurate market value. The trustee would then take that increased capital and distribute it evenly among the debtor’s affected creditors.

To avoid this potentially embarrassing fraudulent transfer situation, make sure you enter into financial agreements with friends or relatives by asking for a reasonable market value. This is especially important if you’re selling property when you’re under extreme financial duress that could lead to a bankruptcy filing in the near future.

The Bankruptcy Code can be extremely difficult to understand, especially when delving into the more arcane language and clauses that are best left to bankruptcy law professionals. Behm Law Group Ltd. serves Mankato, MN, and surrounding communities, and our bankruptcy expertise is at your disposal to help you successfully emerge from the stressful experience of filing for bankruptcy protection.

To better navigate this somewhat obscure bankruptcy side road, our professional team of bankruptcy attorneys at Behm Law Group Ltd. is available to assist and advise you. Contact Behm Law Group Ltd. today and begin your personal journey out of debt.

Posted on

Know Your Preferences: Bankruptcy Assistance in Mankato, MN

Mankato, MN Bankruptcy Attorneys at Behm Law Group, Ltd.

If you made a credit card payment of more than $600, and within 90 days—the preference period—of that payment you filed for bankruptcy, your bankruptcy trustee can request to reclaim that payment.

Don’t get too excited, however, because you won’t be getting that money back. Rather, your bankruptcy trustee will take that reclaimed payment and divide it evenly among the original creditor and all other similarly situated creditors.

Confused? You’re not alone. But Behm Law Group Ltd., can help you understand even the most arcane nuances of bankruptcy law. In the meantime, some background detail:

This section of the Bankruptcy Code (11 U.S.C § 547) deals with the fair and equal treatment of all unsecured creditors, although the original creditor from which the payment was reclaimed may not agree it’s all that fair.

This preferential payments to creditors clause understandably causes some consternation among creditors who must return payments and in turn receive a smaller amount, but it’s intended to ensure all creditors involved receive at least some amount of compensation back from the debtor.

Under the Bankruptcy Code, a debtor is assumed to have been insolvent during the 90 days prior to the debtor filing for bankruptcy. All debtor-to-creditor transfers and payments—over $600—made during that 90 day period are therefore considered suspect.

To learn more about this Bankruptcy Code clause, or for more information about bankruptcy law in general and your bankruptcy options in particular, contact Behm Law Group, Ltd. We have a professional and knowledgeable bankruptcy attorney team who serves Mankato, MN and the surrounding communities. Learn about your bankruptcy options and rights today.

Posted on

Is Your Home Secure During Chapter 7 Bankruptcy?

Minnesota Bankruptcy Attorneys at Behm Law Group, Ltd.

One of the biggest fears people have about filing for bankruptcy is the belief that they will lose their home if they file. It’s a valid concern, but it’s a consideration that can be rather complicated and depends on your particular situation as well as the law as it applies from state to state.

When it comes to Chapter 7 bankruptcy, your home is generally considered “safe,” provided you’re current and up-to-date on your mortgage payments. Further, if you owe more on your mortgage than your home is actually worth, there’s no value or money readily available to the trustees by selling your home, something to keep in mind when considering Chapter 7 bankruptcy.

Declaring Chapter 7 bankruptcy does offer certain protections, but it’s important to remember that ultimately your mortgage lender still holds a security interest on your loan. Stay on top of your mortgage obligations, and you’ll be in a much better position to keep your home during Chapter 7 bankruptcy.

As with all bankruptcy laws, home security during bankruptcy carries a laundry list of legal stipulations and “legal speak” that’s best handled by the professionals. However, your home does carry with it certain bankruptcy provisions that you shouldn’t cast aside without proper consultation.

Behm Law Group, Ltd. specializes in bankruptcy protection for your home and other secured assets. If you’re located in Mankato, MN or Southern, MN or surrounding areas, and you’re facing bankruptcy and all the uncertainty it entails, you should call upon the bankruptcy attorneys at Behm Law Group, Ltd. to discuss your bankruptcy options. Don’t lose sleep about losing your home for one more night. Contact Behm Law Group, Ltd. today.

Posted on

Minnesota Bankruptcy Advice- Are Student Loans Eligible for Discharge?

Tips from Minnesota Bankruptcy Attorneys- Behm Law Group

Student loans are generally understood to be “exempt” when it comes to bankruptcy protection. If you have student loans, you are required to pay them back in full, and the federal government has put rules into place to ensure that debt is collected. There are provisions that can help ease student loan debt, but the burden of proof is on you to prove you are in a position that makes it practically impossible for your to pay your loan. Filing for bankruptcy in Minnesota is a viable option. The Minnesota bankruptcy attorneys at Behm Law Group offer advice on how to navigate these tricky waters.

Minnesota bankruptcy attorneys behm law group

Student loan debt is a huge concern nationwide. As college tuition continues to skyrocket, hundreds of thousands of graduates and perhaps their parents are saddled with debilitating student loan debt that can equal or exceed the price of most starter home mortgages. Private and federal student loan debt exceeded credit card debt in 2010, hit the $1 trillion mark in 2011, and as of this year stands at $1.2 trillion dollars. Meanwhile the economy is struggling to regain past employment levels and starting wages are generally lower, leaving college graduates with burdensome debt and little opportunity to get back on track.

Up until 1976 all education loans could be discharged through bankruptcy. That year the bankruptcy code was changed which disallowed college or government loans to be discharged during the first five years of repayment. After five years of payment the loans could be discharged though bankruptcy or if “undue hardship” was being experienced by the borrower. In 2005 Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act which gave further protections to student loans, both federal and private, from bankruptcy protection.  The only “door” left open for bankruptcy protection was if the borrower could demonstrate to the court that repayment of the student loan would cause an “undue hardship.”

Undue hardship can be exceptionally difficult to prove. Just the simple fact that you don’t have the funds available to pay your loan generally does not qualify as undue hardship.

Navigating through this complicated legal landscape is something best left to a professional bankruptcy attorney. Though full bankruptcy protection is still far from an attainable goal regarding most student loan debt, legal avenues do exist for at least a partial discharge of the overall debilitating debt burden that’s all too common for today’s college graduates.

Behm Law Group, Ltd. employs a professional team of bankruptcy attorneys who can help you through the daunting legal world of bankruptcy protection. With our years of dedicated training in the field of bankruptcy we can advise you about your student loan debt options and whether or not you meet the demanding criteria for having your student loans discharged through bankruptcy.

Serving Mankato, MN, and surrounding areas, Behm Law Group, Ltd. is available to help clients maneuver their way through financial difficulty and avoid the stress and uncertainty of unnecessary, burdensome debt. Contact Behm Law Group, Ltd. to discuss your bankruptcy options.

Posted on

They Are Not on Your Side- Credit Cards Can Lead to Bankruptcy

Considering bankruptcy in Minnesota? Behm Law can help.

Commercials for big credit card companies make it look and sound like their only intent is provide you with an easy alternative to cash or checks to help all your “wants and needs” come true. The commercials show happy people buying bag-loads of goods at high-end stores, retiring to a beach-front home, or treating friends to an expensive dinner at a pricey restaurant. But are they really on your side? Are they really there to help you make your dreams come true? A look at their net incomes give you a glimpse of what they’re really out to do, and who truly benefits from their services.
minnesota bankruptcy behm law group

One recognizable company, Capital One, which gets half of its income from credit cards, reported a $1.1 billion net income for third quarter, 2013. Think about that—$1.1 billion in one quarter. The biggest credit-card issuer, American Express, reported a $1.37 billion net income for third quarter, 2013. Wells Fargo, the largest U.S. home lender, reported a third quarter net income of $5.58 billion. One thing is certain; these companies can’t achieve net incomes in the billions of dollars each quarter by giving money away. They make their exorbitant profits by charging high interest rate
s, massive late fees, and ridiculous overdraft fees. In other words, they lure you with friendly promises of luxury and convenience, and then snag you with highly predatory interest rates and insurmountable fees and penalties.

Credit card companies love to advertise “easy, affordable” credit. But, when times get tough and you’re financially struggling, they can make resolving your financial hardships unbearable and hopelessly unaffordable. Have you been entrapped by the large credit card companies? Is your income being sapped by high-interest payments? Are you over your head in debt? If so, do everything you can to get out of their snare. Your financial future depends on it. But if you are in so much financial trouble you cannot escape on your own, bankruptcy might be your only option. To see if bankruptcy is the right solution for you, call the personal bankruptcy attorneys at Behm Law Group Ltd. Unlike the big credit card companies, we really are there for you.

 

Posted on

The Government Shutdown and Bankruptcy

How does the government shutdown affect Minnesota Bankruptcy?

minnesota bankruptcy behm law groupUnless you’ve been on an extended vacation in a far-away land with limited access to television, radio, or internet, you have heard about the U.S. government shutdown. The media calls it a “partial shutdown.” You may be wondering, “How does the government shut down relate to Minnesota bankruptcy?” Well, for the countless people who are affected by the government shutdown, there’s nothing partial about it; many are left completely without wages and pay. Not only are government employees affected, but also government contractors. Furthermore, there will be a financial domino effect. Companies that do business with the government won’t get paid. In addition, the restaurants, coffee shops, and retails stores that cater to government employees will see a reduction of business, and could end-up laying off employees, or worse, even be forced to shut their doors for good. And, when the unemployment benefits and savings accounts for these people dry up, many will have no option but to file for bankruptcy.

All of these victims of the government shutdown who end up filing for bankruptcy will have to do so not because they are careless, shopaholics, or addicted to gambling, but because of something over which they have no control: the decisions of a handful of powerful legislators. At Behm Law Group Ltd, we understand that this is true not just for furloughed government workers, but for most people who file for bankruptcy. Their financial problems were caused by forces and events over which they had no control, such as a CEO’s bad business decisions, skyrocketing medical costs, or the lagging economy.

At Behm Law Group Ltd, you will find understanding bankruptcy attorneys who will handle your case with compassion and professionalism. We know it’s not your fault. All we want is to help end your personal financial crisis. If your finances are being ruined by forces out of your control and you’re not sure what to do, call Behm Law Group. We can help you.

 

Posted on

Why Chapter 13 Bankruptcy? Advice from Behm Law Group

Mankato Bankruptcy Tips

Chapter 13 Bankruptcy, Behm Law Group, Mankato BankruptcyFor some people, Chapter 13 bankruptcy is the best option to consider when deciding which type of bankruptcy to file. While Chapter 7 bankruptcy discharges people from all of their unsecured debts, Chapter 13 allows you to renegotiate your debts into more affordable payments which you make over the next three to five years. Chapter 13 isn’t for everybody, but it just might be the right option for you. The experienced bankruptcy attorneys at Behm Law Group can help you decide which option is right for you.

Ineligible for Chapter 7

Not everyone is eligible for Chapter 7 bankruptcy. To be eligible, you have to pass the means test, which we have discussed in a previous post . However, Chapter 13 bankruptcy offers you some protection that Chapter 7 does not.

Protect Your Property

If you want to retain your property, such as a house or a car, you will want to file for Chapter 13. While Chapter 7 bankruptcy only discharges debt, Chapter 13 can allow you to reorganize your debt on secured property under much more favorable terms. Also, Chapter 13 allows you to protect property that you might not be able to keep in a Chapter 7 bankruptcy.

Protect Your Conscience

Even though they are in a bad situation through no fault of their own, some people feel guilty about filing for bankruptcy. They want to feel like they have kept their obligations. For these people, Chapter 13 provides the opportunity to reorganize their debt  into more manageable payments and may afford them greater peace of mind. 

We’re Here to Help

The bankruptcy attorneys at Behm Law Group, Ltd. are dedicated to helping people make these difficult decisions. We can help you decide whether Chapter 7 or Chapter 13 is best for you. If you need help deciding between Chapter 7 or Chapter 13, give us a call.

Posted on

Chapter 7 Bankruptcy and The Means Test

Chapter 7 Bankruptcy Mankato MNThe means test was developed to ensure that the only people who file for Chapter 7 bankruptcy are those who truly do not have the ability to pay back their debts. There are many factors that go into the means test, so you should rely on an experienced Minnesota bankruptcy attorney to help you determine if you qualify for Chapter 7 bankruptcy.

The first factor the means test uses to qualify you for Chapter 7 is your income. Basically, if your income is less than the median income in Minnesota for the size of your household, and your debt is consumer debt and not business debt, you qualify for Chapter 7. There is no further test required. However, even if your income is above the median income for Minnesota, you may still qualify for Chapter 7.

Another factor the means test considers is your disposable income. Your disposable income is what is left over after you have paid for your allowed monthly expenses. If the money that is left over after expenses is not sufficient to make payments on your debts, you may qualify for Chapter 7, even if you income is above the median. Otherwise, you must file for Chapter 13, which means you will have to make one monthly payment each month to a chapter 13 trustee for a certain period of time (36 to 60 months) which gets split up among your creditors each month pursuant to the terms of a chapter 13 plan of reorganization. However, that is not necessarily bad news. Depending on your situation, Chapter 13 might be your best option.

The bankruptcy attorneys at Behm Law Group Ltd. deal exclusively in the area of bankruptcy law. Our highly trained and experienced staff can help you decide if Chapter 7 or Chapter 13 is best for your situation. When you are ready to put your debts behind you and move on with your life, give us a call.

Posted on

Going to Jail for Owing Money? Or, Bankruptcy?

There are not supposed to be debtor’s prisons in the United States. That’s what bankruptcy is for. However, debt collectors have found a legal dirty trick to send a debtor to jail. Though it doesn’t happen often, this is a technique they are using that you should know about, especially if you have succumbed to the allure of payday loans. This dirty trick is called a “body attachment.”

Body Attachment Defined

A body attachment, also called a “writ of bodily attachment,” is a type of court order that is usually used for people who are guilty of contempt of court. It is a lot like an arrest warrant. The rules for how a body attachment can be used depend on local laws. As an example, if someone is in contempt of court for missing a court date, a court can order a writ of bodily attachment. Once this order is issued, the court can authorize a sheriff to physically force a person to show up in court. Unfortunately, debt collectors have found a way to use body attachments to harass debtors.

Body Attachment Abused

A debt collector cannot threaten to throw a person in jail. However, debt collectors have been able to use body attachments to do just that. For example, they might get a judgment against a debtor. The collector can then summon the debtor to court. However, the debt collector will then summon the debtor to many, frequent hearings, or worse, they might even fail to notify the debtor of the hearing. As a result, the debtor misses their appointment, and the court issues a body attachment. The debtor then ends up in jail and often pays much more than he or she owes in bail money. If they don’t pay the bail money, they must sit in jail until the court date.

A Bankruptcy Filing Ends the Abuse

When you file for bankruptcy, debt collectors can no longer directly contact you. They must always go to your Minnesota bankruptcy attorney. In other words, when you hire a bankruptcy lawyer, you have an advocate to stand up for your rights. If you’re being harassed and abused by debt collectors, call the bankruptcy attorneys at Behm Law Group, Ltd. We’ll end their unwarranted abuse and work diligently to protect your legal rights.