Posted on

Restaurant Bankruptcy in 2020 and Filing for Bankruptcy in Waseca, MN

At Behm Law Group, Ltd., we work with individuals filing for Chapter 7 liquidation and Chapter 13 reorganization bankruptcy. We also help local businesses file Chapter 7 cases and offer legal guidance and protection to family farmers and fishers working through Chapter 12 reorganization bankruptcy. In the past year, COVID-19 has hit everyone, but it has been especially hard on the restaurant industry. Many restaurants and other food service companies closed down or filed for business bankruptcy. Although Behm attorneys don’t work with businesses filing for reorganization through Chapter 11 business bankruptcy, we still find it important to take note of bankruptcy patterns in current events. Since the coronavirus shutdowns in early 2020, there has been a sharp increase in bankruptcy filings by many in the restaurant industry in Waseca, MN and across the country.

While it’s unfortunately common and often expected for small or family-owned restaurants to struggle during times of economic depression or other financially restrictive events, like a forced temporary closure, the large corporations that own restaurant chains are usually safe from that fate. However, with the prolonged closure during the pandemic and decreased customer bases because of the fear of viral spread, many restaurant chains filed for bankruptcy during the past year.

Ten U.S. restaurants chains that filed for bankruptcy in 2020:

  1. Bar Louie: Owned by Sun Capital Partners, Bar Louie’s chain filed for bankruptcy on January 27th with unlisted assets.
  2. Cosi: Cosi filed for bankruptcy on February 24th with $40 million in assets.
  3. Bravo Italian Kitchen: FoodFirst Restaurants, owners of Bravo (also of Brio Tuscan Grill), filed for bankruptcy on April 10th with assets of $307 million listed.
  4. Souplantation: Owned by Garden Fresh Restaurants (also owners of the Sweet Tomatoes chain), Souplantation filed on May 14th with $50 million listed in assets.
  5. Le Pain Quotidien: Owned by PQ New York 9, Le Pain Quotidien filed on May 27th with $3 million listed in assets.
  6. HopCat: HopCat owners BarFly Ventures (also owners of Stella’s Lounge and Grand Rapids Brewing Co.) filed for bankruptcy on June 3rd with $1 million in assets listed.
  7. Chuck E. Cheese: With an impressive asset listing of $1.7 billion, Chuck E. Cheese owners CEC Entertainment filed for bankruptcy on June 25th.
  8. California Pizza Kitchen: CPK owners Golden State Capital filed on July 29th with $13.5 million listed in assets.
  9. Sizzler: Sizzler USA filed on September 21st, 2020 with $1 million listed in assets.
  10. Ruby Tuesday: With assets listed as $146 million, NRD Capital Management, owners of Ruby Tuesday, filed for bankruptcy on October 7th.

While the majority of chain restaurants that filed for bankruptcy in 2020 petitioned for Chapter 11 reorganization, there have been hundreds of smaller companies that had to file for Chapter 7 bankruptcy relief this past year.

To learn more about filing for bankruptcy in Waseca, MN and the local area, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Posted on

Issues with Debt Management in Fairmont, MN: Requirements for Involuntary Bankruptcy

Bankruptcy is a process available to individuals and businesses alike. If you’re struggling to meet monthly payments on time and debts are piling up, you can choose to use bankruptcy for long-term debt relief. The majority of individual consumer and business bankruptcies are filed voluntarily. If the filer is ready to pay the required bankruptcy fees and ideally is also able to pay for legal representation, they will file a voluntary case that is appropriate for their debts and incomes. However, there are instances when bankruptcy cases are involuntary. If you’re considering filing for voluntary bankruptcy to help with long-term debt management in Fairmont, MN, Behm Law Group, Ltd. can help.

Involuntary bankruptcy for individuals or businesses work similarly. If creditors bring involuntary bankruptcy legal proceedings to the court, you can be forced into a case that will work its way through the resolution of debts, for better or worse for any party involved.

An involuntary bankruptcy case occurs when creditors can prove that a debtor is able to repay their debts and is choosing not to do so for some reason. Creditors may believe they will not get repaid if an involuntary bankruptcy is not initiated.

Because debtors who can repay debts but choose not to often have value in nonessential assets that could be sold, involuntary bankruptcy cases are typically filed against businesses due to their more complex financial circumstances. There are several requirements that must be met before an involuntary bankruptcy can be filed.

Some of the main requirements for involuntary bankruptcy include:

  • The case to be filed must be a Chapter 7 liquidation (individual or business) or a Chapter 11 reorganization (business)
  • Involuntary bankruptcy debtors cannot be nonprofit organizations, family farmers or fishers, banks, credit unions, or insurance agencies
  • Creditors filing must have a claim against the debtor that isn’t “contingent as to liability or the subject of a bona fide dispute as to liability or amount.” Whether a claim is part of a bona fide dispute varies greatly from case to case
  • The debt load owed must be at least $16,750
  • Creditors must be able to prove that the debtor is able to repay their debts
  • If a debtor has fewer than twelve creditors for debts that will be handled in the bankruptcy, just one creditor needs to file for an involuntary bankruptcy proceeding
  • If a debtor has twelve or more creditors, at least three creditors must each participate in the filing of the involuntary bankruptcy proceeding
  • Debtors must respond to an involuntary bankruptcy filing within 21 days before the proceedings start.

Debtors that have an involuntary case filed against them do have the option to convert it into a voluntary case.

To learn more about involuntary bankruptcy proceedings and debt management in Fairmont, MN and the surrounding area, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Posted on

When Redeeming Property During a Chapter 7 Bankruptcy in Redwood Falls, MN is Beneficial

If you are struggling to make debt payments on time or if trying to pay off debts has significantly damaged your quality of life, finding debt relief through bankruptcy might be the right choice. The most commonly filed type of bankruptcy is Chapter 7, which discharges debts in exchange for the liquidation of non-exempt assets. This means some of your property may be subjected to sale and the resulting sale proceeds may be paid over to your creditors. However, in the vast majority of chapter 7 bankruptcy cases, a person is able to protect all of his or her property.  Chapter 7 bankruptcy isn’t designed to leave filers destitute and without property to reorganize.  There are ways to protect your assets from liquidation. By asserting and taking advantage of the applicable bankruptcy exemptions, filing a reaffirmation agreement on a debt that is secured by some of your property, or by redeeming an asset by paying the present value of that asset to the creditor holding a secured lien on that asset, you can keep your home, car, appliances, and other important items. Behm Law Group, Ltd. provides protection and guidance for those filing for Chapter 7 bankruptcy in Redwood Falls, MN and the surrounding areas. Our attorneys help you work through your petition to protect your assets from liquidation and to file a strong case for long-term, bankruptcy court enforced debt relief.

Each state has different bankruptcy exemptions that Chapter 7 bankruptcy filers can claim. The most current exemptions will protect the value in your home, car, household appliances, clothing, retirement accounts, life insurance policy proceeds, and many additional miscellaneous items.

Filers can also choose to redeem an asset in a Chapter 7 bankruptcy petition from a creditor that has a secured lien on that asset.  In order to redeem an asset, one must pay the asset’s present value to the secured creditor in one lump sum. The value of the property you want to redeem may be agreed upon between you and the creditor. If the creditor believes that the property is worth more than you do, you can present the matter to the bankruptcy court and the bankruptcy court will determine the appropriate value for the asset.

If you have the resources/funds to redeem an asset, it can be beneficial to your financial circumstances in many ways. Redeeming an asset makes the most sense if:

  • The value of the property is less than the debt against it. If the subject debt has accumulated over time with missed payments, late fees, and interest, it makes sense to pay off the actual, present value of the property in a redemption rather than pay the total debt owed. For example, if you bought a car worth $15,000 in 2015 and the loan in 2021 has only been reduced to $10,000 but the value of the car has depreciated to $5,000, it makes more sense to pay the $5,000 value of the car than the $10,000 debt.
  • If the asset works well and will be reliable going forward or if it is an asset that is unique, difficult to replace and is needed for your employment, trade or profession, such as specific mechanical tools or farming equipment or equipment used in construction, it makes sense to redeem the asset rather than invest time and energy looking for a new replacement.
  • Sometimes it may be challenging to obtain a loan to purchase a vehicle or other asset after a bankruptcy.  In such circumstances, it makes sense for someone to use proceeds from a retirement account, use tax refunds or use the cash value that has been built up in a life insurance policy to redeem an asset.

To learn more about redemptions and filing for Chapter 7 bankruptcy in Redwood Falls, MN and the local region, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Posted on

What Happens to Secured Property in Chapter 7 Bankruptcy in St. Peter, MN

When you file for bankruptcy, information about all your debts, income, and properties must be disclosed in your bankruptcy paperwork. Documentation about your financial history as far back as six months to two years must be reviewed for any bankruptcy chapter. Any material inaccuracies or omissions of debts, income, and properties can be considered fraudulent and result in a dismissal of your case. Because of the strict and thorough documentation requirements for any bankruptcy petition, filing without the help of a professional can be difficult and risky. The guidance and protection Behm Law Group, Ltd. attorneys provide will help you file a successful petition and receive long-term debt relief through Chapter 12, Chapter 13 or Chapter 7 bankruptcy in St. Peter, MN.

Chapter 7 bankruptcy is the most filed for individual consumers and businesses alike. Chapter 7 works to liquidate non-exempt assets in exchange for a discharge of debts. The value of your non-exempt liquidated property is distributed among your creditors. Because a key part of a Chapter 7 bankruptcy case is the liquidation of your non-exempt assets, it’s important to know how you can protect property from that process.

Protecting properties from liquidation is accomplished by asserting exemptions provided either under state law or under the bankruptcy code, but it can also be done through a reaffirmation agreement or through redemption.

  1. Exemptions: Allotted exemptions vary by state.  In most states, you are allowed to claim the federal exemptions provided under the bankruptcy code instead of the exemptions provided by a particular state if the federal exemptions serve your situation better. Typical exemptions claimed protect the home, car, and household appliances, clothing, life insurance policies, jewelry and many other items from liquidation. Exemptions also change over time as incomes and costs of living are adjusted. A recent list of common Minnesota exemptions can be found here.
  2. Reaffirmation agreement: In Chapter 7, if you are current on payments for a certain debt, such as your car loan, you can file a reaffirmation agreement to have that debt preserved or exempted out of the bankruptcy process. This basically leaves a debt as-is, meaning you can keep your property secured by the subject loan, but you still have to make payments on the debt as usual. More on reaffirmation agreements can be found here.
  3. Redemption: Finally, you can protect a property from the liquidation process through redemption. You indicate that you wish to redeem a certain property item when you file your initial bankruptcy petition paperwork. You notify the court and the creditor that has a lien that you wish to keep a certain item of property.   Through redemption you must pay a secured creditor the present value for the property that serves as the creditor’s collateral.  Typically, that value is paid in one lump-sum payment to the secured creditor.  However, sometimes the issue of what constitutes present or current value for that asset will be disputed.  If you and the affected secured creditor disagree on that value, the issue is presented to the court at a redemption hearing and the court determines what constitutes the present or current value for the asset.

These ways of protecting a property from the liquidation process can become complex depending on the circumstances of each loan, property type, creditor, and much more. Behm Law Group, Ltd. can help you work through this and many other parts of a Chapter 7 bankruptcy in St. Peter, MN. Contact us at (507) 387-7200 or stephen@mankatobankruptcy.com today to learn more.

 

Posted on

Who Files for Bankruptcy in Jackson, MN?

The most common feelings of those who are in a difficult financial situation are a sense of being stranded, trapped, and alone. If you’re struggling to make debt payments on time, the truth is that you are not alone. Each year, thousands of U.S. citizens file for bankruptcy because of debts they will never be able to repay. The social stigma that may linger around bankruptcy today doesn’t take into account the fact that it is actually a vital part of a balanced economy.

The process of bankruptcy is designed to bring those feeling alone with their debts out of their financial stress so they can again become active, participating members of the economy. Behm Law Group Ltd. attorneys work with clients in diverse financial and personal situations, providing legal guidance and protection throughout the process of filing for bankruptcy in Jackson, MN, and the surrounding area.

While it may not seem so to some individuals, many, many people find long-term debt relief through bankruptcy each year. Many of our clients don’t know anyone else in their lives who have experienced it, which is a large part of why they may feel the process is daunting. However, because many are ashamed for having had to file for debt relief, it is not something that they readily share with other people.  It is quite likely that you interact with many people every day, including relatives, who have had to file for relief.

Demographics and other statistics of individual and business bankruptcy filings are reported annually. For the duration of 2021, the effects of the 2020 COVID-19 pandemic on bankruptcy rates can only be projected for now, but all recent reports in the past year tell us that there is no single demographic that never reports cases. This means cases are filed from all demographics regardless of age, marital status, ethnic background, property ownership, or types of debt.

When looking at the averages of that broad range of demographics, the individual and businesses filers look something like the following based on available 2020 reports:

Total bankruptcy cases:                      544,463

Total Chapter 7 filings:                      381,217

Total Chapter 13 filings:                    154,341

Total Chapter 11 filings:                        8,113

Total individual bankruptcy cases:     522,808

Total individual Chapter 7 filings:      369,020

Total individual Chapter 13 filings:    153,236

Total business bankruptcy cases:       21,655

Total business Chapter 7 filings:        12,197

Total business Chapter 13 filings:       1,105

Total business Chapter 11 filings:       7,561

This means the most commonly filed cases were Chapter 7 liquidation at 70.02%; the next most common of Chapter 13 reorganization drops to 28.35%, and finally, Chapter 11 reorganization drops to 1.49% (some additional uncommon chapters totaled to 0.14%).

While no demographic group is exempt from having to file for bankruptcy relief, there are ways to target which regions have the most cases each year. For 2020, the states that topped the list are mostly in the U.S. Southeast, including Alabama, Georgia, Mississippi, Arkansas, Kentucky, and Tennessee.

These averages can give you an idea about who files for bankruptcy, but the truth is that people and businesses of all kinds file. To learn more about the benefits of bankruptcy in Jackson, MN, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing stephen@mankatobankruptcy.com.

 

 

Posted on

Could the Economy Recover Faster with Easier Bankruptcy in New Ulm, MN?

The U.S. economy fluctuates in response to various political, social, financial, and environmental effects. After World War II, for example, the economy thrived largely due to the Allies’ victory over the Axis powers and because the continental United States was never invaded or occupied. Today, we’re seeing the effects of the 2020 coronavirus pandemic on the economy. With hundreds of businesses forced to close during the shutdowns of the early pandemic and with many left without work, the U.S. unemployment rate rose 2.8% from January 2020 to January 2021. If you’re among those struggling to meet debts with a low income, you’re not alone. For those facing unmanageable debts, filing for bankruptcy is often the best solution during times of economic downturn. With Behm Law Group Ltd. attorneys, you can build a strong case for bankruptcy in New Ulm, MN, and the local regions.

We often work with individuals filing bankruptcy cases to either liquidate their non-exempt assets in exchange for debt discharge through Chapter 7 or to reorganize their debts into a manageable partial repayment plan through Chapter 13. However, we also have worked with many small sole proprietorship businesses that are able to file for Chapter 13 or want to file for Chapter 7 and close their business operations entirely.

Today, for either individuals or businesses, filing for bankruptcy may be the best way to grow and heal the U.S. economy at the municipal, state, and national levels. Stimulus packages have helped many businesses and households stay afloat during some of the most difficult times in the last year, but those packages and federal loans are not enough to stabilize things and prevent what could be an all-out long-lasting depression.

Throughout much of America’s history, failed small businesses were liquidated. While this may appear more logical than having the government and the American taxpayer pour billions of dollars to keep many struggling companies afloat, the fact is that allowing more bankruptcies during times of economic crisis has shown, on multiple occasions, to help the national financial system recover more quickly and avoid even more dire conditions.

The majority of U.S. businesses are not owned as sole proprietorships, which means that Chapter 11 reorganization bankruptcy is an available option that will prevent the company from having its assets liquidated. By allowing the reorganization of business debts through Chapter 11, companies maintain their operations.  They continue to participate in trading goods and services and they continue to buy from other markets and pay their workers. Allowing more businesses to have access to bankruptcy will support the economy in this way rather than eliminating them as participants in the national economic system.

Additionally, allowing more people access to Chapter 13 bankruptcy means more creditors will be repaid at least part of what they are owed.  It also means that individuals will still be allowed to use their discretionary income to act as consumers and participate more actively in the national economy.

If you’re considering filing for bankruptcy in New Ulm, MN, you may be able to play a role in supporting a faster recovery of the national economy. Contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com to learn more.

 

 

Posted on

Healing from Physical and Mental Effects with Debt Relief in Worthington, MN

Anyone who has had trouble making payments on time for bills or debts knows the severe stress and anxiety this type of situation can cause. While the saying “money can’t buy happiness” may be true, those who have experienced financial difficulties know that having a reliable income will free up a lot of emotional, mental, and physical space for other emotionally healthy aspects of life. Unfortunately, over 10% of the U.S. population was living below the poverty line in 2019, and since the difficulties many faced during the 2020 coronavirus pandemic, that level is projected to rise to 13.7% in 2021. If you’re facing financial stress because of sudden or accumulated debts, finding positive debt relief will alleviate many negative physical and mental effects money troubles can have on your wellbeing. At Behm Law Group, Ltd., we help individuals and small businesses find long-term debt relief in Worthington, MN and the surrounding area through bankruptcy.

Bankruptcy may carry a stigma for the temporary damage it can do to your credit, but that impact is greatly outweighed by the permanent benefits it provides. For thousands of American households and businesses each year, bankruptcy provides long-term debt relief and effective financial education through credit counseling and debt management assistance.

Debt relief through bankruptcy alleviates the significant mental and physical health effects that financial struggles can have on your wellbeing, including:

  • Stress and Denial: No matter what your own general health conditions are, debt puts stress on your whole life. Not being able to pay that debt exponentially increases that stress. With stress comes many other effects, from digestion and blood pressure issues to anxiety and panic. Many will also deal with this stress through denial, which often increases financial instability and depression.
  • Regret and Anger: Owing a lot of debt can also have a lot of social stigma. Everyone handles this unnecessary and harmful stigma differently, but the most frequent negative reactions are regret and anger. Experiencing regret for having incurred debt you can’t repay may cause someone to make even more poor future financial decisions and may cause someone to have an unhealthy fear or paranoia about one’s finances in general. Filing for bankruptcy not only provides debt relief but also helps individuals learn more about how to manage their finances successfully and in a healthy and productive manner going forward.
  • Anxiety and depression: While stress, denial, regret, and anger all affect your life and health in many ways, those emotions and others caused by debt can also result in anxiety or depression. Anxiety and depression are more common than many realize. In several studies, more than 50% of those who reported having financial difficulties also suffered from anxiety and depression.

Compared to other questionable and fraudulent non-bankruptcy debt relief options like so-called debt consolidation, debt settlement, or debt assistance programs, bankruptcy is significantly more effective for treating financial instability with long-term positive results. To learn more about how Behm Law Group, Ltd. can help you work through bankruptcy for debt relief in Worthington, MN and the surrounding area, contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

 

Posted on

Benefits of Choosing Behm Law Group, Ltd. as Your Bankruptcy Lawyer in Owatonna, MN

In the southern Minnesota, Behm Law Group, Ltd. is a law firm that devotes its practice exclusively to bankruptcy cases.  Stephen J. Behm is also a certified consumer bankruptcy specialist certified by the American Board of Certification.  We provide representation and guidance for Chapter 7, 13, and 12 cases.  If you’re struggling with debt, bankruptcy is often an effective option for long-term debt relief and financial stability and financial rehabilitation.  Although it helps thousands of Americans get back on their feet financially each year, bankruptcy can still be a complex and nuanced legal process. While it’s possible to file without an attorney, it’s not something we recommend. The help of a Behm Law Group bankruptcy lawyer in Owatonna, MN and the surrounding areas can be critical in navigating the bankruptcy code and filing a successful case.

Behm Law Group, Ltd. is a family-owned law firm with the best interests of all our clients always at the forefront. Our attorneys are skilled in helping people facing many different kinds of financial circumstances. Stephen J. Behm has worked with clients in the local region for twenty-three years, supporting those struggling with accumulated or sudden debt. Our goal as bankruptcy lawyers is to work our clients through a bankruptcy case from start to finish as quickly and as stress-free as possible.

When we hear back from previous clients about their experiences with a Behm Law Group bankruptcy lawyer, we hear a lot of the same great feedback. At Behm Law Group, the peace of mind of our clients is always something we are concerned about and try to promote and improve.  We understand that filing for bankruptcy can be a scary process.  We work hard to be direct with our clients and to apprize them of what they need to do and what documentation they need to produce to get through the bankruptcy process as efficiently and with as little disruption to their lives as possible.  However, we also remain sensitive to our clients’ fears and insecurities about the process.

These terms come up the most frequently from our past clients:

  • Professional: Our attorneys have the education, legal training, and expertise to handle even the most difficult bankruptcy cases. Behm Law Group is also a law firm that many other legal professionals in the area will contact for advice and guidance on financial and bankruptcy court matters. Both our clients and the legal community can rely on our professionalism and experience.
  • Direct: We don’t beat around the bush with our clients. Instead, we believe in delivering an honest evaluation about a case while remaining kind and sensitive to our clients’ worries and fears.
  • Fast: Depending on the chapter filed, our attorneys will work to complete a case from start to finish as efficiently and as quickly as possible without compromising the quality of results for our clients.
  • Knowledgeable: Our staff is proficient in handling a range of financial circumstances with sensitivity to the different life circumstances of all our clients.
  • Understanding: We’ve worked with those struggling to meet debts while also handling many life stresses. From raising children as a single parent to facing unemployment, we are empathetic to all client situations throughout a bankruptcy.
  • Caring: Not only do we wish to see our clients safely through a bankruptcy process with long-term stability for the future, but we also truly care about the emotional and mental well-being of our clients and we care about our community as a whole.

When you choose Behm Law Group, Ltd. for your bankruptcy lawyer in Owatonna, MN, you can trust us to guide you from start to finish in any case. To learn more about our services, contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Posted on

Why You Can No Longer Choose to File for Chapter 7 Bankruptcy in Mankato, MN Anymore

Bankruptcy has long been an option to individuals and businesses that cannot repay their debts. In the United States, bankruptcy is designed to be the fairest possible process to filers, creditors, and other parties involved. However, since 2005, the consumer bankruptcy process changed significantly with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the establishment of the Means Test and other laws. This act limited individual qualification for chapter 7 bankruptcy, but it also helped streamline and simplify parts of the court process as a whole. If you are considering filing for bankruptcy and don’t know where to start, Behm Law Group Ltd. can help. We provide comprehensive legal protection and guidance for Chapter 13 and Chapter 7 bankruptcy filings in Mankato, MN, and the local areas.

 

For at least ten years before the BAPCPA was put into place, the issue of bankruptcy abuse in the United States was becoming more significant. Filers could choose to file for Chapter 7 bankruptcy with little to no limitations on their income-to-debt ratios and have debts discharged quickly. Because of this, it was the impression of many in Congress that people were taking advantage of the bankruptcy system and were too flippant about filing for bankruptcy relief.  In short, many in Congress believed that filing for chapter 7 bankruptcy relief had become too easy and that the process had become very unfair for the creditors involved.

 

In addition to fewer limitations for one to file for Chapter 7 bankruptcy relief before the BAPCPA was enacted, filers were not required to undergo a pre-bankruptcy filing credit counseling course. According to the BAPCPA, filers must now undergo a credit counseling course with a court-approved agency within 180 days before filing their bankruptcy petition.

 

The most significant change the BAPCPA enacted was the Means Test, which created a mathematical formula of determining whether a filer qualifies for Chapter 7 liquidation or Chapter 13 reorganization. The Means Test measures a filer’s income and debt amounts. If a person’s projected monthly income for a household of their size is equal to or  lower than the state median or average income of a similar-sized household, the person will qualify for Chapter 7 bankruptcy. If their projected income is higher than the state median or average income for a similar-sized household, the filer can only file for Chapter 13 bankruptcy.

 

In addition to stricter rules for qualifying for Chapter 7 bankruptcy and the credit counseling requirement, the BAPCPA also extended the period of time that needs to pass before one can file for chapter 7 bankruptcy relief again.  With the enactment of the BAPCPA, the waiting period was extended from six to eight years.  So, if someone filed for Chapter 7 bankruptcy relief on January 1, 2016, that same person could not qualify for chapter 7 bankruptcy relief again until January 2, 2024.

 

These are two of the main changes the BAPCPA created in the bankruptcy law, but there were several other changes made to protect creditors, such as limiting automatic stay provisions and lien avoidances, establishing stricter case dismissal rules, and changing bankruptcy exemption allowances.

 

Overall, with the passage of BAPCPA bankruptcy filers are unable to choose to file for Chapter 7 bankruptcy unless they satisfy the means test and meet certain other requirements. These limitations help the bankruptcy process maintain fairness and balance between the interests of creditors and bankruptcy filers and they help to prevent many types of potential bankruptcy fraud.

 

To learn more about how filing for Chapter 13 and Chapter 7 bankruptcy in Mankato, MN, and the surrounding areas will impact your debts and other financial circumstances, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing  stephen@mankatobankruptcy.com today.

Posted on

Repayment Plan Adjustments for Chapter 13 Bankruptcy in Pipestone, MN

Bankruptcy is a legal debt remedy that many people believe is limited to individuals struggling severely due to a low income and debts they cannot repay. Many people aren’t aware that Chapter 13 (aka “wage earner” bankruptcy) can provide just as much support to those with steady incomes and accumulated debts as Chapter 7 (aka “liquidation” bankruptcy) offers those at or below a state’s median or average income. Both chapters are valuable support systems for individuals in many different financial circumstances. Whether you plan to file for Chapter 7 or Chapter 13 bankruptcy in Pipestone, MN, Behm Law Group Ltd. can help you build a strong case and receive long-lasting debt relief.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy works to reorganize your debts into a three- to five-year repayment plan that fits your income. Over that time, you will pay only a percentage of your unsecured debts, like credit card debts and medical bills.  At the end of the three-to five-year period, the remaining balances on those unsecured debts will be discharged.

With secured debts, like mortgages or car loans, one can pay those debts in chapter 13 under adjusted and more favorable terms.  With a vehicle loan, for instance, one can lower the applicable interest rate.  Further, one must only pay the present value of the vehicle rather than what is actually owed on the subject loan.  This is called “cram down”.  For instance, if one has a vehicle that is worth $10,000.00 but one owes $20,000.00 on the subject loan, one must only pay the $10,000.00 present value.

Also, if someone is delinquent or past due with one’s mortgage payments, those past due payments can be paid back or “cured” through a chapter 13 plan and the mortgage lender will not be able to commence foreclosure proceedings.

Your submitted petition will include your proposed repayment plan that you and your attorney have worked out together. The trustee will review the plan and your creditors will be allowed to examine it as well.  Your bankruptcy plan will then be submitted to and approved by the bankruptcy court.

Although the court may take a month or two to review and approve a submitted plan, you will still be required to start payments to the trustee within thirty (30) days after the plan has been filed with the bankruptcy court.  During this time, however, it’s possible that you may have a change in financial circumstances that necessitates a modification to your plan even before it is approved by the bankruptcy court.

Submitting an explanation and documentation to the bankruptcy court denoting the changed financial circumstances will likely be an acceptable basis for the bankruptcy court to allow the plan to be modified before approving it.   Presume that you initially submit a three-year (36 month) plan that provides for monthly payments of $500.00.  Presume further that after you submit your initial plan your monthly income decreases so that you can only afford to make monthly payments of $200.00.  If you and your attorney provide the chapter 13 trustee and the bankruptcy court with documentation denoting the reasons for the income changes, you can file a modified three-year (36 month) chapter 13 plan that provides for monthly payments of $200.00.

If you have income or other financial circumstances that change after your plan is confirmed or approved by the bankruptcy court during your three- to five-year repayment period, you will be able to make further adjustments. If you’ve had a major life change like losing your job, getting divorced, or having a child, you can file a motion with the bankruptcy court to change the terms of your chapter 13 plan.

To learn more about repayment plan adjustments with Chapter 13 bankruptcy in Pipestone, MN, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.