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When You Can’t Afford Your Payments

You’ve heard it stated time and time again until it repeatedly drones in your head like a mantra; just make a budget and live within your means. At Behm Law Group we agree that everyone should live within their means and that keeping a budget makes financial sense. It sounds simple enough – just spend less than you make. But for some folks, through no fault of their own, it isn’t just that simple. What do you do when you add up all of your expenses and find your income is simply not enough? How do you decide between paying a bill, buying groceries, or getting a prescription refilled? Who can you turn to when an unexpected medical situation puts your thousands of dollars into debt? These are serious problems, but there are options you can pursue if you find yourself in these situations.

There are organizations that can negotiate with your creditors to reduce your payments and interest. However, you have to be careful that the organization you choose is legitimate. Also, depending on the amount of money you owe, the newly negotiated terms might still be more than you can afford, assuming that your creditors are willing to negotiate. While this option works for some people, it isn’t for everyone.

Another option is to file for bankruptcy. Bankruptcy might be the last thing you want to do but the only viable option available to help you emerge from beneath a mountain of debt. At Behm Law Group we understand that bankruptcy is not something you should enter into lightly. However, bankruptcy law was created for people such as yourself―people in a bad situation who need a fresh start.

No matter how frugally you live, your bills can still overwhelm you. Getting out of your financial distress is not as simple as repeating a mantra. Sometimes you need help from someone who cares. At Behm Law Group, LTD, we limit our practice to bankruptcy law. Our Minnesota bankruptcy attorneys will treat you with the respect you deserve.

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The Dangers of Filing Pro Se

We live in a do-it-yourself society. You can find information on the Internet for doing everything from changing your engine oil to playing a jazz riff on the piano. However, there are some things you probably don’t want to do yourself—things only an expert should do. Unless you’ve been trained and have the right tools, you wouldn’t replace the transmission on your car. You definitely wouldn’t want to pull your own wisdom teeth. Likewise, just because do-it-yourself information and kits are available doesn’t mean filing for bankruptcy is something you should attempt on your own. If you file and proceed through bankruptcy without an attorney, you will be attempting to wade through the legal process on your own behalf, known in legal terms as Pro Se.

Filing for bankruptcy is a complex process. There are many legal hoops to jump through and pitfalls to avoid as you maneuver through the process. If you don’t do everything absolutely correctly, you can lose your rights, your property, or even have your case dismissed. Do you know with absolute certainty if you should file for Chapter 7 or Chapter 13? Do you know if you passed the means tests for Chapter 7? Have you completed the pre-filing credit counseling? Are you aware of the things you can or cannot do before or during a bankruptcy that can create additional legal problems?

Why try and go it alone through the legal system when a bankruptcy lawyer can help you avoid actions that will get you in trouble or even land you in jail. As your representative throughout the entire process, Behm Law Group will ensure that you have completed all the necessary steps to navigate and finish the bankruptcy successfully.

While filing Pro Se might seem like a way to save some cash, it is not worth it. Instead of going Pro Se just go with the proven professionals. At Behm Law Group we limit our practice strictly to bankruptcy law. It is stressful enough to be in financial distress. You don’t need the added stress of filing on your own and representing yourself. You can rely on Behm Law Group to make your filing successful and as stress-free as possible.

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The Hopelessness of Making Minimum Payments

There’s a reason that the minimum payment on a credit card is so low, and it isn’t because the big credit card companies care about you or your finances. The minimum payment on a credit card may be convenient for you, but it’s designed to keep you in debt and making additional payments to them for years. Not only that, as you continue to pay the minimum payment, the credit card companies reap obscene profits from you as you struggle to make ends meet. Long-term periods of minimum payments from you equal big interest income and profits for them. Here are some examples of what making the minimum payment will do to you:

  • If you owe $1000 at 18% interest, it will take you 8 years to pay off your card. You will have paid $863 in interest.
  • If you owe $1000 at 21% interest, it will take you 10 years to pay off your card. You will have paid $1,398 in interest.
  • If you owe $3000 at 18% interest, it will take you 26 years to pay off your card. You will have paid $6,863 in interest.
  • If you owe $3000 at 21% interest, it will take you 47 years to pay off your card. You will have paid $15,398 in interest.

If you find yourself in a position in which you can only make minimum payments, you will most likely never get out of debt. If you want to see how long it will take to pay off your credit cards, you can use the Credit Card Repayment Calculator at:

http://www.federalreserve.gov/

As you can see, the credit card companies have a powerful advantage over you. If you get stuck in their snare, you might never get out. However, bankruptcy laws were written to help people like you get out of the cycle of credit card debt. If you are in trouble, contact the Minnesota bankruptcy attorneys at Behm Law Group LTD. We will help you determine if bankruptcy is the best option for you.

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The Emotions of Filing for Bankruptcy

If you are considering filing for bankruptcy, you are most likely under an enormous amount of stress. If your situation feels hopeless, try to understand that you’re not alone. At Behm Law Group LTD, we work with people in your situation every day. Although this can be a traumatic and depressing situation, we see the difference that filing bankruptcy can make for people, not only with their finances, but also with their emotional health and well-being.

Before you file

You might be wondering how you will pay the heating bill, pay rent, make a mortgage payment, or put food on the table. Creditors are most likely making harassing phone calls from the moment you wake until you go to bed. When you do go to bed, you can’t sleep because your mind won’t quit churning in turmoil due to your financial stress.

When you file

Immediately after starting the process with a Minnesota bankruptcy lawyer, the harassing phone calls end. You can pick up the phone with the confidence that the call is from a friend or family member. This is because when you file for bankruptcy, it is illegal for debt collectors to continue demanding money from you. Not only do the harassing phone calls stop, so do the demanding letters in the mail. That source of stress disappears immediately. Life begins to look and feel normal again.

After you file

After filing for bankruptcy, most people feel a tremendous amount of relief. They know that their financial nightmare is behind them. They also feel hope. Bankruptcy law exists in order to give people just like you a second chance. At Behm Law Group LTD, we know the relief and hope that bankruptcy can bring. If you’re feeling hopeless, call Behm Law Group LTD and allow us to help assess your needs and show you how bankruptcy can help you.

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From Bondage to Hope

From ancient times forward, societies have had different ways of dealing with debtors. Usually they were quite punitive and based on the faulty presumption that people acquire debts from some sort of moral failing. Fortunately, modern bankruptcy law has done away with these cruelties and provided bankruptcy as a means to start over.

Debt bondage

In ancient times, a debtor or the debtor’s children could be put into slavery to pay for a defaulted loan. Sometimes this servitude was indefinite and lasted for several generations. Once in servitude, the debtor, his family, and the generations who followed were subject to abuse and humiliation until the debt was repaid or satisfied.

Debtors prison

In the middle ages, many European countries developed a system of debtor’s prisons. The length of the prison sentence depended on how much was owed. While this system was more humane than slavery, it still resorted to removing a debtor’s freedom as result of the debt. Under some systems, the debtor was still obliged to repay the debt even though they were imprisoned. They either repaid this debt through forced labor or, when possible, by attaining the amount to satisfy the debt by selling their belongings or obtaining money from friends and/or relatives who wanted them out of prison.

Modern bankruptcy law

Bankruptcy laws were first written in the United States in the early 1800s. Bankruptcy laws stopped treating debtors as criminals and started providing a means for people to start over. Bankruptcy laws in the United States have been rewritten several times, resulting in the modern bankruptcy system we have now.

A way to get hope

While we no longer have debt bondage or debtor’s prison, being in debt can still feel like bondage. As the big credit card companies drain your finances, it feels they have you in a financial prison. Fortunately, bankruptcy law provides a way to freedom. There are consequences to bankruptcy. It is not something to enter into lightly. That’s why you need a Minnesota bankruptcy attorney to help you find out if bankruptcy is best for you. If you feel imprisoned by your debts, call the Mankato bankruptcy lawyers at Behm Law Group LTD.

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Chapter 7, Chapter 12, and Chapter 13 Bankruptcy

The three types of bankruptcy that people can file for are Chapter 7, Chapter 12, and Chapter 13. A Minnesota personal bankruptcy attorney can evaluate your financial situation and advise you which type of bankruptcy best fits your circumstances.

Chapter 7 bankruptcy

Chapter 7 bankruptcy is sometimes referred to as liquidation bankruptcy. However, it isn’t as scary as it sounds. Chapter 7 is a good option for people who rent, have little or no equity in their homes, or have few possessions. When you file Chapter 7 bankruptcy, most of your unsecured debts can be discharged. If you have qualified under the means test and have completed a pre-filing education session with a credit counselor, you can file for Chapter 7 bankruptcy.

Chapter 12 bankruptcy

Chapter 12 is for family farmers who are financially distressed. To qualify, the family farmer must have a regular annual income more than 50% of which must be from farming activities. If you file for Chapter 12 bankruptcy, you have 3 to 5 years to make payments to your creditors.

Chapter 13 bankruptcy

Chapter 13 bankruptcy is a good option for home owners with steady incomes and equity in their home. When you file Chapter 13 bankruptcy, you will have 3 to 5 years to make payments on your delinquent accounts. If your unsecured debts are less than $360,475 and your secured debts are less than $1,081,400, you can file for Chapter 13 bankruptcy.

No substitute for a bankruptcy law

You need a qualified Minnesota bankruptcy attorney to help you choose among Chapter 7, Chapter 12, or Chapter 13 bankruptcy. At Behm Law Group LTD, we limit our practice to bankruptcy law. Our bankruptcy lawyers have helped scores of people in your position. Whether you file for Chapter 7, Chapter 12, or Chapter 13, we will work to get you the freedom you deserve.

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Preparing for Bankruptcy

After months or years of struggling with debt, you have decided that the only way to attain financial relief is to declare bankruptcy. By following these steps, you can ensure that the process goes smoothly from beginning to end.

Gather your financial information

Your attorney will give you a complete list of things you need to bring to your appointment. Generally this includes everything you have for financial records, such as:

  • All sources of your income
  • All records of all your debts, such as current credit card bills, medical statements, student loans, car loans, and mortgages
  • Bank statements from all of your bank accounts
  • Records of your financial assets (CDs, savings accounts, stock shares)
  • An estimate of the worth of your possessions

Financial actions to avoid during this process

Any of these activities could make your case more complicated and difficult to complete:

  • Paying-off a loan to a relative
  • Transferring cash or property to a relative
  • Using any credit if you know you’re going to file bankruptcy

Call a Minnesota Bankruptcy Attorney

Bankruptcy can be complex, and you need an experienced bankruptcy lawyer to guide you through the process. At Behm Law Group, LTD, we specialize in bankruptcy law. In fact, it’s all we do. It is possible for someone to attempt to declare bankruptcy on their own, however, we highly recommend against it. If you make an error in your case it could cost you money you simply don’t have and have repercussions for years to come. For example, if you forget to file a required form, your case could be dismissed. And even worse, you might lose the right to re-file. If your financial situation has become a nightmare and you want to see if bankruptcy is right for you, give Behm Law Group LTD a call.

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When Should I File for Bankruptcy?

While each individual’s financial situation is unique, there are valid reasons that cause one to consider filing bankruptcy. In many of these cases, this is the wisest course of action to take. This is not to say that bankruptcy is a decision that should be made lightly. A person considering bankruptcy needs to understand there are consequences to utilizing this legal strategy. However, there are also benefits to filing if you find yourself in one of the following situations.

When should you file?

  1. When you find it’s a struggle or impossible month after month to pay your bills on time. Missed payments can snowball, resulting in late fees, higher interest rates, and service/account suspension or cancellation.
  2. When you find yourself behind on mortgage payments, are considering a short sale, or are facing foreclosure.
  3. When you are spending more than you are making. If you find yourself having to use credit cards or taking out loans to pay off credit cards and other expenses, you may wish to consider filing for bankruptcy.
  4. When you are receiving calls from credit collection agencies. Prior to your information being sent to a collection agency, the creditor will often contact you directly and, given today’s economy, the creditor may wish to offer you alternative payment options. However, once the collection agencies begin calling, this may be an indication that bankruptcy is the wisest option for you.

These are just a few of the reasons why people make the decision to file for bankruptcy. If any of these apply to you, and you have questions about whether filing bankruptcy is right for you, Behm Law Group in Southern MN would be pleased to answer any of your questions at no charge.

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Know Your Rights: Stop Creditor Calls

Declaring bankruptcy can be a humiliating and distressing experience for people.  People who have made the decision to file for bankruptcy do not need to suffer the added stress of creditor calls.

Creditors can be relentless in calling individuals who have fallen behind on payments.  You may receive multiple calls at your home and work or elsewhere on your cell throughout the day. Can you stop these unwanted calls? Yes. The minute you retain a bankruptcy lawyer, you may refer the creditors calling you to your lawyer. In fact, it is advisable to do so right away. Not only will this will discourage creditors from contacting you, but it will reduce the considerable stress you are experiencing. Once you actually file bankruptcy you are protected by bankruptcy laws that make it illegal for creditors to continue to contact you.

Credit representatives are hired by companies to collect what is owed and they are trained to provide intimidating or potentially misleading information that may make you reconsider your choice of bankruptcy. For example, they may state that a bankruptcy could prevent you from obtaining employment in the future, or insinuate that the impact of a bankruptcy will have a negative influence on your credit score “forever.”

Credit representatives may also attempt to discourage you from declaring bankruptcy by offering you substantially lower interest rates and/or payoff amounts. While this may decrease your overall debt in the short term, it may not have a significant impact on your ability to pay off all your debts and avoid bankruptcy. In fact, sometimes these “solutions” only forestall the inevitable need to file for bankruptcy. Some individuals have agreed to such arrangements only to later find themselves in the position of declaring bankruptcy minus the money they paid out.

If you’re in a financial crisis, have weighed your options carefully, and have determined bankruptcy is the best route to salvage your financial well-being, don’t let these callers intimidate or deceive you. Bankruptcy is a tough choice but it is most often times a necessary choice that is made to preserve and protect your own best interests. It’s not necessary to allow creditor calls add to your stress.

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Pre-Bankruptcy Credit Counseling

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made major changes to previous bankruptcy law. Among these changes, BAPCPA added the requirement that debtors receive pre-bankruptcy credit counseling from an approved credit counselor within 180 days of filing for bankruptcy. After attending the mandatory counseling, the counseling organization issues a certificate as proof that you completed the requirement.

What to expect

A pre-bankruptcy counseling session usually takes 60 to 90 minutes. The session can be held on-line, over the phone, or in person. During the pre-bankruptcy counseling session, you will receive an evaluation of your finances, learn alternatives to bankruptcy, and learn how to create a personal budget.

How much it costs

The price varies depending on the organization, where you live, and what services you receive. However, the price is usually around $50. Before the counseling starts, the organization must disclose any fees it will charge. Furthermore, the organization must provide free counseling for people who do not have the means to pay. If you cannot afford the fee, you can ask the organization for a waiver before the start of the session. After you complete the counseling, the organization is not allowed to charge an extra fee in order for you to receive the certificate.

Where to go for counseling

Your Minnesota bankruptcy attorney can provide you with a list of credit counselors. You can also get a list of approved counselors from the Department of Justice list of Approved Bankruptcy Counseling Agencies.

Calling an attorney

Pre-bankruptcy credit counseling is only one of many requirements you have to meet to successfully file for bankruptcy. This is why you need an experienced Minnesota bankruptcy lawyer to help guide you through the requirements and processes involved in declaring bankruptcy. At Behm Law Group, LTD, we will assist you through the bankruptcy process to ensure that nothing stands in the way between you and the financial relief and protection you deserve. Give Behm Law Group LTD a call, and we will help you learn if bankruptcy is the appropriate option for your current financial situation.