Behm Law Group, Bankruptcy Attorneys

If you’re an individual struggling financially in the United States, you have several options to resolve your debts effectively. These options include bankruptcy, which in many cases is a far more beneficial option than other remedies such as debt settlement or debt consolidation. Individual bankruptcy options commonly take the form of asset liquidation/debt discharge or debt reorganization, known respectively in bankruptcy terms as Chapter 7 and Chapter 13. If you choose to file for bankruptcy in Worthington, MN, Behm Law Group, Ltd. provides legal advice and assistance in navigating the process from start to finish.

With either bankruptcy chapter, any individuals, companies, or organizations to which you have debt obligations are categorized into types of creditors based on the kind of debt owed. These categorizations will determine how your debts are handled and how your creditors may be paid in your bankruptcy case.

One type of debt that is commonly encountered in bankruptcy cases is priority, unsecured debt. This kind of debt is generally treated more preferentially than general, unsecured debts.  Priority creditors will often file proofs of claim regarding the debts you owe.  In a chapter 7 bankruptcy case, priority, unsecured debts will not be discharged and a debtor will remain liable on those debts after a chapter 7 bankruptcy case is concluded.  In a chapter 13 bankruptcy case, priority, unsecured debts must be paid in full in order for a chapter 13 repayment plan to be approved by the bankruptcy court.

Creditors with priority claims will often have debts that are directly linked to the well-being of another person or organization. This includes debts owed to employees, child support and other spousal support obligations, contracted amounts owed in return for promised services, taxes, and settlements for injuries caused by intoxicated or substance-influenced motor vehicle accidents.

These claims are treated in accordance with the chapter regulations that delegate how all other debts are handled in a case.

Chapter 13: Priority claims in a Chapter 13 case determine in part how the filer’s repayment plan will be structured. In most cases, these debts will be handled in a process similar to secured debts. This means filers might be required to repay priority debts in full during their 3 to 5-year repayment plan period.  However, unlike secured debts, priority claims are not paid interest.

Chapter 7: In a Chapter 7 case, debts are processed in terms of discharge and exceptions to discharge.  As indicated above, the claims of priority, unsecured creditors will not be encompassed by the discharge issued by the bankruptcy court at the end of the case.

If you’re considering filing for bankruptcy in Worthington, MN, it’s important to understand how your creditors will be defined and what options they might have in the process. Behm Law Group, Ltd. provides counsel and support for both Chapter 13 and Chapter 7 cases. Contact us at (507) 387-7200 today for more information.

In most cases, individuals and small businesses fight against filing for bankruptcy until it becomes clear that it is the most sensible option. In many cases, before the decision to file for bankruptcy is made, the filer attempts to meet or repair debts in many ways. Payments or money transfers are common occurrences before bankruptcy petitions are filed, but in some situations, those transactions might be reversed after your case is filed. Behm Law Group, Ltd. offers legal advice and assistance to help you understand how your case will unfold when you file for Chapter 7 bankruptcy in Marshall, MN.

In a Chapter 7 bankruptcy case, the bankruptcy trustee is a fiduciary for creditors and the trustee is obligated by the bankruptcy code to ensure that the person filing for bankruptcy is forthright and honest and that he or she has listed all of his or her creditors and listed all of his or her assets. The trustee is also tasked with making sure that the process is fair for all creditors and making sure that all creditors are treated equally.

One responsibility of a trustee in the trustee’s role of making sure creditors are treated fairly and equally is to identify and recover any preferential transfers in a bankruptcy case.

Preferences 

If you have multiple unsecured creditors (creditors that do not have collateral securing the debts) in your case and, within the ninety days prior to the filing of your case, you have made payments or transfers to any one creditor totaling $600.00 or more, this is considered an avoidable preference.  This means that you have preferred one similarly situated creditor over another creditor who may not have received any payment.   If a trustee finds that you preferred one creditor over another, the trustee will be obligated to avoid the preference by demanding a refund of what you paid from the preferred creditor.  The trustee will then distribute that amount equitably among all of the similarly situated creditors.

Preference claims can either be voluntary payments you made or involuntary garnishments from your pay checks or bank accounts. For creditors labeled “insider creditors”, such as your friends or family, any payments totaling $600.00 or more made within a year of the date that your case is filed will be deemed a preference.  If you pay a friend or relative more than $600.00 within a year before your case is filed, the trustee can and will demand a refund and disburse it among all creditors.  For other creditors, such as credit cards and medical debts, known as “arms-length creditors”, payments of more than $600.00 within ninety days before your case is filed will be deemed preferential.

Strong Arm

To reverse any claims deemed to be preferences, the trustee has the right to use his or her “strong arm” powers under the bankruptcy code and undo the transactions.

If you suspect you may have made a preference payment, or if you have other concerns about your situation, you should not try to undo or reverse it.  Behm Law Group, Ltd. can help you throughout the process of filing for Chapter 7 bankruptcy in Marshall, MN. For more information, please contact us at (507) 387-7200 today.

Making prudent use of the financial help that filing for Chapter 7 bankruptcy can provide is one of the smartest things you can do if you’re overwhelmed by accumulated debts and financial obligations. Chapter 7 was designed to help people recover from crippling debt and get back on their feet financially. The U.S. Bankruptcy Courts have to treat each case with fairness to debtors and creditors alike, so Chapter 7 works as a balanced process. Behm Law Group, Ltd. helps filers with legal advice and assistance throughout the process of filing for Chapter 7 bankruptcy in New Ulm, MN.

To keep things balanced between creditors and debtors, Chapter 7 bankruptcy works to discharge your debts while simultaneously liquidating your nonexempt assets, if any, to repay your creditors.  Most cases, however, are “no asset” cases which means that all of one’s assets are exempt and creditors don’t get paid anything.  It’s your job as a debtor to claim your own exemptions to prevent assets from being unnecessarily liquidated. The flipside to claiming exemptions, however, is that it’s possible to claim too many for your case.

Excessive Exemption Planning

Generally speaking, exemption planning—taking assets you may not be able to keep in bankruptcy and liquidating them and using the money to pay down your mortgage or purchase assets that you would be able to keep so you can maximize your exemptions—can be a tricky process. In fact, it can be considered fraudulent behavior and can be a basis for the dismissal of a bankruptcy case or a denial of all and any debt relief. That being said, there are times when exemption planning is possible when it comes to making purchases before filing for bankruptcy.

Purchasing Before Bankruptcy

Many purchases you make on credit before filing for bankruptcy can be construed as fraudulent use of credit and can render the subject credit debt non-dischargeable. For example, any debts you gather within 90 days before filing for bankruptcy that exceed $675 in total can be considered non-dischargeable. This applies to “luxury goods,” a term that covers most purchases that are not necessary to your household like televisions, furniture, trips to Hawaii or Europe. Purchases that you are allowed to acquire credit debt for within the 90-day period before filing for bankruptcy includes necessities like food, gas, rent, and auto care. These debts may still be petitioned for discharge.

Your spending during the 90-day period prior to filing for bankruptcy is flexible. If you make some bad choices, however, by “maxing out” your credit before filing for bankruptcy, many of your debts may not be discharged, and your case may even be dismissed. Behm Law Group, Ltd. can help you navigate exemption planning and purchasing before you file for bankruptcy in New Ulm, MN. For more information, contact us today at (507) 387-7200.

If you find yourself in a position where filing for bankruptcy is the most logical course of action for you and your family or for your business, you will also find that you have creditors to who will fall into different categories and that creditors in the different categories have different rights.  When you think of creditors in bankruptcy, you should think of them being listed in their different categories as on a totem pole.  Behm Law Group, Ltd. provides legal assistance to help you throughout the process of filing for bankruptcy in Mankato, MN, and to protect and direct you in the face of your creditors.

When you file for bankruptcy, your creditors must file proofs of claim with the bankruptcy court to show, as a matter of public record, the type or category of debt that you have with each of them and how much you owe to each of them. These claims can fall into the following three categories.

Secured Claims: These claims should be viewed at the top of the totem pole.  When your creditor has a lien on your property (or a security interest), they can file a secured claim. Mortgages and car loans are common examples of debts with security interests attached. If you default on these types of debts, your creditors can enforce their liens and reclaim the property (i.e. house, vehicle, washer/dryer) securing their liens. Chapter 7 filers must specify in a bankruptcy form called the “Statement of Intention” whether they want to surrender property/collateral to a creditor or continue making debt payments and retain the property/collateral. Chapter 13 filers can continue paying off the debt secured by the property/collateral with their established repayment plan and in some cases even eliminate the lien their creditors have on that property/collateral.

Priority Claims: These claims should be viewed in the middle of the totem pole.  Where unsecured claims are on dischargeable debts with no secured collateral, priority claims are non-dischargeable debts with no secured collateral. “Non-dischargeble” means that they are not subject to being wiped away or discharged.  These debts are unsecured debts but they are debts that Congress, for certain public policy reasons, determined should not be subject to discharge.  For example, child support debts, some tax debts, and criminal fines are generally not subject to discharge in a Chapter 7 case. Creditors to whom you owe these types of debts file priority claims when you file for bankruptcy relief. Because these debts are not discharged, you must keep paying them even if you file for Chapter 7, and they must be completely repaid with your chapter 13 repayment plan if you file for Chapter 13. Creditors with priority claims will be repaid before those holding unsecured claims, but after those with secured claims.

Unsecured Claims: These claims should be viewed at the bottom of the totem pole as they have a lower priority than secured claims and priority claims.  These claims are only applicable to debts with no secured collateral. Most frequently, these debts include medical bills, personal loans, and credit card debt and are almost always discharged with a Chapter 7 case. With Chapter 13 cases, your non-exempt assets and your disposable income determine the repayment plans for these debts. Creditors with unsecured claims are often paid last and paid least.

If you are considering filing for bankruptcy in Mankato, MN, and you would like to learn more about how Behm Law Group, Ltd. can help you throughout the process, contact us today at (507) 387-7200.

Filing for Bankruptcy in Minnesota | Tips from Behm Law Group, Ltd.

Since Hurricane Katrina, there have been changes and adjustments to bankruptcy laws. This is especially important for people that have been the victim of a natural disaster and lost all of their possessions and potentially their income. With the recent tornadoes and weather events in the South, Behm Law Group, Ltd. wanted to revisit the nuances of bankruptcy for disaster victims.

When an enormous weather event, such as Hurricane Katrina, strikes, the government may relax some of the laws associated with bankruptcy. In the instance of Katrina, the strict rules of Chapter 7 bankruptcy were relaxed to take into account the increased expenses and loss of property and income that disaster victims and their families experienced. Chapter 7 bankruptcy allows for debts to be completely erased. If the looser rules were not put into place after such large events, some families with higher income than the state’s median may have to repay their debt over a five year period.

Of course, these exceptions are due to extreme cases, like natural disasters and other events that impact an entire geographic area. It is still applicable to residents of Minnesota that sometimes experience tornadoes and flooding statewide.

To help you navigate the intricacies of bankruptcy law, call Behm Law Group, Ltd, your local bankruptcy attorneys based in Mankato, Minnesota. Filing for bankruptcy, whether Chapter 7 or Chapter 13 is never an easy decision, and it certainly isn’t a simple process. We are here to help you through the hardest times in your life, whether they are naturally occurring or caused by a natural disaster.

Bankruptcy is a highly effective debt relief option available to individual consumers and businesses alike. It’s a system that is designed to protect the economy on varying scales from the oversaturation of debtors unable to continue making regular payments. It’s also designed to protect debtors from destitution while maintaining fair treatment for any creditors involved. If you are considering choosing bankruptcy as a long-term debt relief option, it’s important to understand how difficult it could be to file without professional experience, knowledge, and guidance. With the help of Behm Law Group Ltd, you can work through the nuances and complexities of filing for bankruptcy in Fairmont, MN, and build a strong, successful case.

While bankruptcy is an efficient tool for debt relief, it doesn’t necessarily wipe out all debts. Unsecured debts like credit card debt or medical bills are almost always discharged, but other debts like some taxes or priority obligations like child support are largely exempt from discharge in bankruptcy. Like those debts, not all legal debts like lawsuit judgments, fines, or other debts are always discharged in a bankruptcy.

Embezzlement judgments, for example, may or may not be discharged in your bankruptcy. If you have committed embezzlement fraud and have gone through the legal processing of that crime, you will most likely have a criminal fine or restitution on your record. Criminal fines or restitution fall into the category of priority (non-dischargeable) debt and they will not be discharged in your bankruptcy. However, you may be able to have that debt discharged if it is only classified as a civil judgement.

Civil judgments are claims against you that fall into the category of debts owed for “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” If your debt for embezzlement is a civil judgment rather than a criminal fine or restitution, the creditor you owe that debt to must request that the court declare it non-dischargeable. To do this, they must take action early on in your case, specifically, within 60 days of the date set for the 341 meeting of creditors.

To request this, a creditor will have to file an adversary proceeding (i.e., lawsuit) with the court. In this proceeding, the creditor must prove that your embezzlement actions were fraudulent, that you were not authorized by the company or by the law to take the money or property, and that the property taken was held in trust for another party (i.e., the company or person embezzled from). If a creditor files a successful adversary proceeding, your civil judgment debt will not be discharged in bankruptcy.

If you are considering filing for bankruptcy in Fairmont, MN, and want to learn more about how different debts will be affected, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com today.

When people find themselves in a relationship with the person they want to spend the rest of their life with and they decide to take the next step into marriage, not much will stop them from tying the knot. Even something such as financial circumstances, which can be considered relatively trivial in the grand scheme of life, will be unlikely to prevent a marriage if a couple is truly determined. This means that many couples enter a marriage with substantial debt, low incomes, or otherwise less-than-stable finances. If you and your spouse are finding it difficult to pay your debts, bankruptcy might be the next step to finding long-term financial improvement. With the help of Behm Law Group Ltd., you and your spouse can file a successful joint bankruptcy case and receive effective debt relief in Mankato, MN.

Individual consumer bankruptcy chapters, including Chapter 7 liquidation and Chapter 13 reorganization type bankruptcies, can also be filed jointly by a married couple. Joint filings allow the combination of both your and your spouse’s debts into one case, requiring only one each of the pre-bankruptcy requirements, including the meeting of creditors, Means Test, credit counseling, and more. In addition to the consolidation of two of each pre-bankruptcy requirements into one, the bankruptcy fees are the same for individuals as for joint-filing spouses. This cuts in half the amount you and your spouse would pay if you each filed for an individual case.

If you choose to file a joint bankruptcy, all your financial information will be combined into a report that essentially represents as a single filer. Your assets (properties) and liabilities (debts) will be combined, and both of your incomes will be taken into consideration. For most joint filers, we recommend considering Chapter 13 more seriously than attempting to file for Chapter 7 for two reasons: eligibility and exemptions.

With a higher income from your combined jobs, accounts, or any other sources, you may not qualify for Chapter 7 because you may not pass the Means Test. The Means Test assesses your income-to-debt ratio. To be eligible for Chapter 7, your income-to-debt ratio must be lower than the state median of a similar household. Additionally, you can only claim the same exemptions of an individual filer. This means you may not be able to protect some of your property from liquidation in Chapter 7 because your debts are higher, your assets are more valuable, but your exemptions are not adjusted accordingly.

Filing for joint Chapter 13, however, means you save money in bankruptcy fees and attorney costs, save time on pre-bankruptcy requirements, have an easier time meeting repayment plan requirements with both of your incomes, and can pay off your plan more quickly than you would as two individuals.

To learn more about joint bankruptcy and debt relief in Mankato, MN, contact Behm Law Group Ltd. today at (507) 387-7200 or via email at stephen@mankatobankruptcy.com.

If you’re facing a large amount of debt and unable to make payments each month on those debts without severely compromising your quality of life, you may want to consider filing for bankruptcy. Chapter 7 bankruptcy is the most commonly filed case for individual consumers. In fact, there were over 400,000 non-business Chapter 7 bankruptcy cases filed in 2017. If you are considering filing for Chapter 7 bankruptcy in Redwood Falls, MN, Behm Law Group, Ltd. can help you put together a strong case that will provide long-term debt relief.

Chapter 7 bankruptcy works as a liquidation process. You will have to provide all your financial information including debts, income, and properties to the bankruptcy trustee assigned to oversee your case. The trustee will then liquidate (sell) any non-exempt assets (properties) you have if you cannot claim an exemption on them. You can claim exemption amounts on properties like your home or car and other assets to protect them from liquidation. Once your non-exempt assets have been liquidated, the debts tied to them are discharged along with your unsecured debts such as credit card and medical debt.

There is one other way your secured properties can be treated in Chapter 7 other than with liquidation or exemption. They can be redeemed.

Property redemption essentially means you are buying the property back from your creditor for the value it’s currently worth. This is a beneficial option for filers if they owe a debt on the property larger than its value. By redeeming the property, you may pay less than actually paying back the debt, and you will be able to keep the asset.

The value of the property is either agreed upon by you and your creditor, or, if you disagree, the court holds a valuation hearing. When the value is determined, you have to buy it back by paying one lump sum.

To redeem a property, there are several requirements that must be met. These include:

• The property cannot be of value in the Chapter 7 case. This may mean you exempted it from liquidation or the trustee has determined that it has no value to your bankruptcy estate.
• The property must be a tangible item.
• The property cannot be real estate. It has to be a personal item such as a vehicle or computer – something other than your home or other real estate properties.
• The property cannot be used for business purposes (i.e. if you use your car for onsite jobs).

Redemption is an effective way to reclaim property you owed a debt on that was much higher than its actual value. If you want to own your property debt-free, the Chapter 7 bankruptcy process and redemption is one way to do it.

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

In the United States, there are two main types of bankruptcy available to individuals and businesses alike: Chapter 7 and Chapter 13. While both types provide government-administered debt relief, the two chapters work very differently. Both are valuable options for debtors, and the more suitable one depends on the financial and personal circumstances of any given filer. If you are considering bankruptcy but don’t know where to start, Behm Law Group Ltd. can help. We can work with you to determine which chapter is right for you, and we can guide and protect you throughout your case. Filing for bankruptcy in St. Peter, MN, isn’t the impossible process it might seem to be, and our expert attorneys can help you see that every step of the way.

The main differences between Chapter 7 and Chapter 13 lie in how the debts are handled and how long the cases take.

Debt Handling

• Chapter 7 is a liquidation process. This means your non-exempt assets/properties are liquidated/sold, and the amount realized from that sale is given to your creditors. This payment to your creditors allows any debts tied to those sold properties to be discharged. Your unsecured debts, such as credit card or medical debt, will also be discharged in the Chapter 7 process.
• Chapter 13 is a reorganization process. This means that you will take your debts and reorganize them into a repayment plan customized to your income. The repayment plan requires one lump monthly payment until your plan is complete. You may be able to repay your secured debts in full under different terms, but your unsecured debts will be fully discharged after your chapter 13 plan has concluded.

Time

• Chapter 7 takes between three to four months to complete. The time period varies depending on how quickly you complete the pre-bankruptcy credit counseling and other requirements, how long it takes your trustee to liquidate any non-exempt assets, and whether there are any judgment claims in your case that need to be expunged. 
• Chapter 13 takes three to five years to complete. Your repayment plan will either be a three-year or a five-year period. If your income is lower than the state median of a similar household, it will be a three-year plan. If it’s higher, then your plan will be five years.

There are other differences between Chapter 7 and Chapter 13 as both are nuanced processes that vary case by case. Another major difference, for example, is that you can only qualify for Chapter 7 if you pass the state Means Test. This test measures your income-to-debt ratio. You’ll only be eligible for Chapter 7 if that ratio is lower than the state median of a similar household.

To learn more about the differences between the two chapters or to begin filing for bankruptcy in St. Peter, MN, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com today.

Filing for bankruptcy is a highly effective process for finding long-term, permanent debt relief. Not only does bankruptcy treat the majority of common individual debts, it also creates a situation for debtors to learn better financial practices and it protects the local and national economies from an excess of debts that won’t be repaid. If you are considering filing for bankruptcy, you’re not alone. Thousands of Americans file each year. With the help of Behm Law Group, Ltd, you can build a successful case for Chapter 13 or Chapter 7 bankruptcy in Worthington, MN.

Chapter 7 bankruptcy is the most commonly filed type of bankruptcy for individuals and consumers alike. It works to discharge your debts in exchange for the liquidation of your non-exempt assets. This means you may lose some non-exempt property in Chapter 7, but it doesn’t mean you’ll be left destitute with nothing to your name. In fact, thanks to the allotted exemptions you’ll be able to claim, most if not all of your property, like your home or car, will be protected.  In fact, in the vast majority of chapter 7 bankruptcy cases, all people lose are their debts and no property is lost at all.  

On the other hand, the property that cannot be exempted or protected will be liquidated or sold by the chapter 7 bankruptcy trustee. This often includes luxury items and other uncommon properties. Some unusual properties that might be subjected to the liquidation process include:

• Pets: Most pets won’t be of any interest to your trustee because their monetary value is often insignificant in comparison with the rest of your property. However, if your pet is a rare breed, exotic animal, show-breed, or other expensive animal, it could literally be worth thousands of dollars. In that case, your pet could, unfortunately, be sold in the bankruptcy process.
• Artwork: If you own valuable artwork, you may not be able to exempt or protect all of it from the bankruptcy process. Depending on the circumstances of your case, if it has a lot of value, your trustee could sell or liquidate it.
• Jewelry: While exemptions can protect some of the value of one’s jewelry, some people could lose some of their jewelry depending on its overall value.
• Boats: Boats are expensive, and if you’re filing for bankruptcy and own a boat, it’s likely you have a lot of debt to get rid of in a bankruptcy. Because of this, it may be difficult to exempt a boat from liquidation if that vessel has a lot of value.
• Collections: Valuable collections often include rare items, complete assortments, antiques, or specialty trading cards. Even card collections like Magic the Gathering or Pokémon can be of value today. If you’ve put time and energy into compiling a valuable collection, it’s important to understand that, depending on its overall value, it could be liquidated in a Chapter 7 bankruptcy.

If you are considering filing for Chapter 7 bankruptcy in Worthington, MN and want to know more about exemptions, contact Behm Law Group, Ltd today at (507) 387-7200 or via email at stephen@mankatobankruptcy.com.