Behm Law Group, Bankruptcy Attorneys

Today, Chapter 7 is the most common form of bankruptcy for both individuals and businesses. Because the Chapter 7 process is only available to those with income-to-debt ratios lower than the Minnesota median, bankruptcy is often associated with unemployment or even financial ruin. However, bankruptcy is an option to people and businesses with a wide range of incomes and debts in the form of debt restructuring—Chapter 13 bankruptcy. Behm Law Group, Ltd. offers legal advice and guidance to help you decide which type of bankruptcy in Windom, MN, would be the most beneficial to your current financial situation.

If you have a stable job and your debts weigh heavily enough for you to consider bankruptcy, chances are you’ll gain the most out of a Chapter 13 case. Chapter 13 bankruptcy works to structure your debts into a 3 to 5-year repayment plan that’s suited to your income. The process is designed to give your creditors as much of a return on your debt as possible without crippling your finances or severely damaging your quality of life.

In a Chapter 13 repayment plan, your debts are broken down into several categories based on the priority claim those creditors have on repayment. First, secured creditors are generally the creditors with property secured through a promissory note and security agreement such as mortgages, car loans, or any other debt concerning a physical property. These creditors can be repaid in different ways during your Chapter 13 plan period. In some cases, you will continue to pay these creditors directly rather than through your bankruptcy plan.  For instance, if you have a mortgage with Wells Fargo and you are current with the mortgage payments, you would continue to pay that debt directly to Wells Fargo.  However, if you are delinquent with your mortgage payments, you can pay the mortgage delinquency back to Wells Fargo throughout the 36 to 60 months of your chapter 13 plan rather than all at once.  Of course, you would still have to continue making your regular monthly mortgage payments to Wells Fargo but the delinquency owed before your case was filed would be paid back by the chapter 13 trustee with the payments you make through your chapter 13 plan.  Second, priority debts involved in the bankruptcy process (bankruptcy fees, for example) must also be paid in full.

You’ll also be required to repay certain debts in full regardless of any type of plan period, income, or bankruptcy you file for. These commonly include child support and alimony, most tax debts, and debts from personal injury or death you caused while operating a vehicle while intoxicated.

The rest of your debts will be considered unsecured or nonpriority debts, and these may be paid at a determined portion from 0% to 100%. The amount you’ll be required to repay to unsecured creditors in your Chapter 13 plan varies based on your disposable income, the exemptions you can claim, and the minimum amount those creditors would receive if your assets were liquidated in a Chapter 7 bankruptcy.

Overall, the amount you repay all your creditors, including priority, secured, and unsecured, depends on several financial components. Your debts and other claims you owe that factor into a Chapter 13 plan include:

1. Mortgage owed and arrears
2. Other home loans and arrears
3. Car loans owed and loan arrears
4. Personal property loans
5. Debts on other property loans
6. Alimony and child support
7. Priority tax debts
8. Other priority debts
9. Death or personal injury claims against you
10. Administrative bankruptcy fees
11. Attorney fees

Some debts, like medical bills and credit card debt, may even be discharged in a Chapter 13 bankruptcy repayment plan. For more information about creditors, repayment plans, and filing for Chapter 13 bankruptcy in Windom, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Financial recovery through the federal process of bankruptcy is a public option for all businesses and individuals, but there are eligibility standards for any bankruptcy case. If you want to file for liquidation bankruptcy, for example, you must pass the Means Test to qualify for a Chapter 7 petition. If you’re ineligible for Chapter 7, you can choose to file for debt reorganization (Chapter 13), but even that process has certain prerequisites. With the help of Behm Law Group, Ltd., you can determine which type of bankruptcy in Mankato, MN is best for your financial situation.

The two common types of bankruptcy for individuals are Chapter 13 and Chapter 7. The former reorganizes your debts into a manageable repayment plan for a three to five-year period. The latter liquidates non-exempt assets, distributing the value of those non-exempt assets to creditors and discharging your debts in return. Which type you file for depends on two things: your debt-to-income ratio (passing the Means Test or not) and your choice.

Your Choice

If you pass the Means Test and qualify for Chapter 7 bankruptcy, you’ll have the option to choose between Chapter 7 or Chapter 13. While there are occasionally financial circumstances that force filers to stick with Chapter 7 bankruptcy, it’s likely that you’ll have a choice. Behm attorneys can help you make this choice based on several factors of your situation:

1. Nonexempt assets: Non-exempt assets are assets that have value in excess of your applicable bankruptcy exemptions or for which there are no bankruptcy exemptions that one can utilize to protect or keep them. These assets will be liquidated in a Chapter 7 case and the sale proceeds will be used to repay something to your creditors. If you want to keep non-exempt property, Chapter 13 is the right choice for you.   As long as you pay the value of those non-exempt assets to your creditors through a 36 to 60 month chapter 13 repayment plan, you can retain non-exempt assets that you would otherwise lose in a chapter 7 liquidation bankruptcy.
2. Car loan: If you have debt on your motor vehicles, you could have those assets taken back by the creditors who have liens on them in a Chapter 7 bankruptcy. However, choosing a Chapter 13 repayment plan could allow you to repay your car loans over time and in a more manageable way and keep your credit in a more stable position.
3. Mortgage: Similarly, you can have equity or value in your home protected by the Homestead Exemption in a Chapter 7 case but you may be behind with your mortgage payments. In a chapter 7 case and if you wanted to eventually avoid a foreclosure proceeding, you would likely have to pay back any delinquency in full to the mortgage lender in 30 to 60 days.  However, in a chapter 13 repayment plan, you could break that mortgage delinquency up and repay it over 36 to 60 months, avoid a foreclosure proceeding and retain your home property.  You may also be able to strip off or cram down any second or third mortgages in a Chapter 13 case.
4. Priority debts: When you file for any type of bankruptcy there are a number of debts that fall into the “priority” category. These debts cannot be discharged in Chapter 7 liquidation, but they can be integrated into a Chapter 13 repayment plan and paid off. If you want to repay debts like child support and tax debt in a structured repayment plan, choose Chapter 13 over Chapter 7.

Both chapters have their own advantages depending on your situation. To find out which type of bankruptcy in Mankato, MN is right for you, contact Behm Law Group, Ltd. at (507) 387-7200 today.

When you file for bankruptcy, the people or organizations you owe money to are broken down into several different types of creditors. Generally, these creditors are considered as priority, secured, and unsecured. Within these categories, there is a simple hierarchy: priority creditors are repaid in full, secured creditors are paid the value of their collateral after exemptions are taken into account or the collateral is surrendered back to them, and unsecured creditors are paid with varying amounts depending on your case. While these creditors are considered similarly in both Chapter 7 or Chapter 13 bankruptcy, the outcomes of their repayments are different. Behm Law Group, Ltd. offers expert counsel and support when you file for Chapter 13 bankruptcy in Pipestone, MN, to help you navigate through your creditors and case.

For most Chapter 7 cases, the creditors are treated based upon which debts can be discharged and which exemptions can be claimed. In a Chapter 13 bankruptcy, however, the creditors must be treated differently based on the types of debts and the significance of those agreements.

When a Chapter 13 case is filed, the end goal is to restructure the filer’s debts into an appropriate repayment plan. This plan provides for the full repayment of priority debts and the payment of the value of secured debts, but often offers the filer the benefit of partial repayment of unsecured debts. The creditors of unsecured debts are written into the repayment plan in two fundamental ways.

1. The first basic requirement for the treatment of unsecured creditors in a Chapter 13 bankruptcy repayment plan is that they will be paid at least as much as they would if the filer had filed a Chapter 7 bankruptcy.
2. Secondly, the filer must pay all disposable income – surplus income left over after reasonable and necessary living expenses are paid – to their unsecured creditors throughout the duration of their three to five-year repayment plan. This income amount may fluctuate throughout the plan period, and the chapter 13 plan must be updated to reflect these income changes.

The repayment plan period for any Chapter 13 bankruptcy case depends on the filer’s income. If your income is less than the Minnesota median of a household similar to your own, your plan will last three years. If your income is higher than the median, you must file a five-year plan. The amount you repay your unsecured creditors will also depend on how long your plan lasts. For example, if you owe an unsecured creditor $5,000 and your disposable income adds up to $100 a month, you will repay 72% of that debt in a three-year plan or repay 100% of that debt in a five-year plan. In some cases, you will repay 0% of an unsecured debt when you file for Chapter 13 bankruptcy.

What you repay your unsecured creditors in Chapter 13 will vary greatly depending on your income and your additional debt payments and expenses. For most filers, these debts will be alleviated at least in part. For more information about your unsecured creditors and filing for Chapter 13 bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

The benefits of filing for bankruptcy vary between the different chapters. If you choose to file for Chapter 7 bankruptcy, you benefit from the fresh start it provides after your discharge order is issued by the court in about ninety to one hundred and twenty days. If you choose to file for Chapter 13 bankruptcy, you benefit from a restructuring of your debts into a manageable repayment plan and you will receive a discharge order discharging your debts after your repayment plan is concluded in three to five years. However, for individual consumers filing for either chapter, there is some overlap of the different benefits each type of bankruptcy provides. If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, Behm Law Group, Ltd. can help you find ways to gather benefits that you might get during a Chapter 7 case as well.

A Chapter 13 bankruptcy is designed to restructure your debts into a new repayment plan that will last from three to five years. A common misconception about this restructuring is that the filer will continue to repay all of one’s debts in full over the payment plan period. This is true in some cases but most debts will only be partially paid.

Debts Discharged

While all of your priority unsecured debts, such as most tax debts and child support debts, must be paid in full in a Chapter 13 case, there are some nonpriority unsecured debts that will only be partially paid and then the balance will be discharged.

1. Personal Loans: Any personal loans from friends, family, or acquaintances are considered unsecured nonpriority debts. These “loose contract” loans will be only partially paid with Chapter 13 bankruptcy; however, if they are secured by property or other assets, the creditors may take back those assets if you do not pay the loans back.
2. Credit Card Debt: This is the most common type of unsecured nonpriority debt that filers hold when entering bankruptcy. With Chapter 13, that credit card debt can be wiped out after being partially paid through the chapter 13 repayment plan.
3. Some Tax Obligations: The majority of your tax debts must be repaid at a decided percentage with your Chapter 13 repayment plan. However, if you have very old tax debts, they can be considered nonpriority unsecured debts and be discharged with Chapter 13.
4. Medical Bills: Medical bills can be crippling, but when you file for Chapter 13 bankruptcy, those debts will be discharged if they were accumulated when your insurance did not completely cover your medical care.
5. Other: If there is a judgment against you for negligence or contract breach involving a certain nonpriority unsecured debt, it’s possible such a debt can be discharged in Chapter 13. Debts involving injury to another person caused by drunk driving will not be discharged.

If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, or if you are struggling with these kinds of debts among other financial obligations, Behm Law Group, Ltd. can help. Contact us at (507) 387-7200 today for information about how bankruptcy can work for you.

If your debts and financial obligations put you in a position where you may qualify for Chapter 7 bankruptcy, it’s important to consider that option before one or more of your creditors place a judgment against you in court. If you stall in meeting debts payments but refuse to use bankruptcy options to recover from heavy financial obligations, your creditors have options to take matters to court. At Behm Law Group, Ltd., we encourage you to use the system set in place by the United States Congress to your advantage and file for Chapter 7 bankruptcy in Mankato, MN, if you qualify before your debt obligations lead to a more drastic situation.

Bankruptcy is a complex system of laws in place designed to protect debtors from being unable to resurface from drowning debts. However, that system is also designed to protect creditors, and it offers them several ways of regaining debts owed to them from debtors who do not or cannot meet scheduled payments. One of those options is by acting as a judgment creditor to use the courts approval in regaining what is owed to them.

What is a judgment creditor?  

If your creditor files a successful lawsuit against you and receives a money judgment, that creditor becomes a judgment creditor. Creditors cannot place judgment against secured debts, but any unsecured debts and nonpriority debts are susceptible to a judgment creditor. That title allows a creditor to find information about your assets and offers them more collection techniques than a normal creditor. A judgment creditor can forcibly take up to 25% of your net wages, collect from your bank account and other deposits, repossess certain items such as motor vehicles, and place liens against your properties and assets.

How do they gain information about your assets?

If your creditor has kept records of your debt to them over time, it can often be simple for them to find out what assets and properties you hold. Loan applications to your creditor, for example, give information about your name, address, employer, and certain asset information. The DMV can also provide information to judgment creditors about your registered vehicles including boats, cars, and recreational vehicles. Any real estate you own can also be easily searched on public online records.

If you’re struggling with multiple debts, it may be just a matter of time before your creditors file judgments against you. Filing for bankruptcy before then might save time and money and reduce the stress of legal action taken against you. For more information and to find out if you qualify for Chapter 7 bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Bankruptcy is one of those things in life, like so many other legal processes, that’s easier said than done. It’s a complex process with many opportunities for misstep, yet little room for error. If you’re considering filing for bankruptcy with a high income and a desire to keep many of your assets, Chapter 13 is your best option. However, because the process is so nuanced, there are many ways things could go wrong. Behm Law Group, Ltd. provides the help you need to successfully file for Chapter 13 bankruptcy in Waseca, MN.

A major part of filing for Chapter 13 bankruptcy involves creating a repayment plan that your bankruptcy trustee will approve. This can be a difficult task, and without the help of a knowledgeable legal aide, your plan might be rejected for any number of reasons.

Plan Rejection

Your bankruptcy trustee will—in no uncertain circumstances—reject your Chapter 13 repayment plan if any of the following points are true to your situation:

1. You don’t have a high enough income to continue meeting your monthly repayment installments.
2. Your plan period isn’t the correct length to match your income. If your income is lower than the Minnesota median, you’ll have a three year plan. If your income is higher than the Minnesota median, you’ll have a five year plan.
3. Your plan doesn’t include complete payments to debts you’re required to pay back, such as your priority debts.
4. Your plan doesn’t include the dedication of all your disposable income to your unsecured creditors.
5. Your plan doesn’t pass the Best Interest of Creditors test.
6. Your plan isn’t considered in Good Faith by your trustee or the courts.
7. You haven’t given all of the documents that decide your debt repayment requirements.
8. You’ve missed payments on a previously-approved plan.

If your plan is rejected, you’ll have the opportunity to fix your errors and file again, or you can attempt to negotiate the reasons for rejection with your trustee. Of course, if you choose to work with the experienced bankruptcy attorneys at Behm Law Group, Ltd., it’s highly unlikely your plan will be rejected.

For more information about rejected plans and filing for Chapter 13 bankruptcy in Waseca, MN, contact us at (507) 387-7200 today.

Today, the food industry is largely industrialized across the country, but there are some farming and fishing families still thriving today. However, because farming and fishing are some of the most difficult trades with which to support a household and maintain a healthy business, there are also a large number of financially struggling family farmers and family fishermen. For these family businesses, bankruptcy might be the best path to take. While our attorneys often handle cases for individuals working through Chapter 7 or Chapter 13 bankruptcy, Behm Law Group, Ltd. also offers legal advice and assistance to family farmers and family fishermen filing for Chapter 12 bankruptcy in Mankato, MN.

Chapter 12 works in many similar ways to Chapter 13, but is specifically designed to serve family farmers and family fishermen rather than a household or individual. Chapter 12 filers will work with their bankruptcy trustee to establish a 3 to 5-year repayment plan for their debts, where they must pay back 100% of their priority debts and to be determined portion of their other debts. The amount a family farmer or family fisherman must repay of non-priority debts is determined by their average income received within the 6 months prior to filing for bankruptcy.

There are ways, however, to reduce the amount of your secured debts as a family farmer or family fisherman filing for Chapter 12 bankruptcy. By effectively “cramming down” secured debts, you can lower your owed debt and pay less in the long run.

Cram Down: The cram down method is a way of bringing your debts back in time. This means you can reduce certain debts (for example boat loans, business mortgages, and farm equipment debts) to the present market value of the property. This method is effective on “upside down” loans where you owe more debt than the base value of the property. If you owe $4,000 on a loan after the accumulation of missed payments and interest and the collateral for the loan is worth $2,000.00, you can reduce that debt down to the base value, and you would not have to pay more than $2,000. In Chapter 13, cram downs are limited in many ways, but in a Chapter 12 case, the court can authorize the cram reduction of almost all secured debts, including your home mortgage and car loans.

Cramming down secured debts can often give a family farmer or family fisherman the ability to meet Chapter 12repayment plan requirements. For more information about cram downs and the process of filing for Chapter 12 bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

If you’re considering filing for bankruptcy, you’ve probably started to do some research of your own and learning about your options. If you think you may qualify for Chapter 13 bankruptcy, you might have already discovered that a long road of meeting financial and legal obligations set by the U.S. Bankruptcy Courts, your bankruptcy trustee, and your creditors is ahead of you. Navigating these requirements is crucial to successfully working through a Chapter 13 petition and completing a repayment plan, but it can be a difficult process without the help of a well-versed professional. Behm Law Group, LTD. can provide that help with our experienced bankruptcy lawyers in Fairmont, MN

One stipulation you must continue to meet if you’re about to begin your repayment plan is the Best Effort requirement.

What is “Best Effort?”

Essentially, the Best Effort requirement demands that you must be able to prove you will use the entirety of your disposable income—any income you do not spend on taxes, household needs, transportation, or other debt payments—on meeting your monthly repayment plan installments. Specifically, your disposable income must be used to make payments to nonpriority unsecured creditors in your repayment plan.

Nonpriority Unsecured Debts

Your nonpriority unsecured debts (such as credit card debt, personal loans, and medical bills) may not always be paid back in full like your priority debts. The amount you pay back to your nonpriority unsecured creditors is again determined by your average income. If your income average over the six months prior to filing for bankruptcy falls below the Minnesota median income, the length of time you have to repay your nonpriority unsecured debts back can be as short as 36 months or 3 years; your creditors, accordingly, would receive lesser amounts. If your income is higher than state median, the length of time you have to repay your creditors must be 60 months or 5 years. In such a case, your creditors would receive larger amounts.

With the right guidance it’s easy to meet the Best Effort requirement and still have deduction options for your disposable income. Behm Law Group, LTD. can provide that guidance in the months leading up to your petition and throughout the process of filing for Chapter 13 bankruptcy. For more information about how our experienced bankruptcy lawyers in Fairmont, MN can give you the best legal advice and assistance with your bankruptcy case, contact us at (507) 387-7200 today.

Your disposable income plays a large part in determining your path when it comes to filing for bankruptcy as an individual. This income is taken into consideration with your debts and the value of your assets and properties. The result decides whether you qualify for Chapter 7 or Chapter 13 bankruptcy. If your results don’t pass the Means Test, you may opt to work with a bankruptcy trustee to build a repayment plan and file for Chapter 13 bankruptcy. If you’re considering filing for Chapter 13 bankruptcy in St. Peter, MN, Behm Law Group, Ltd.  can provide legal assistance with your repayment plan and your petition.

A debt repayment plan with Chapter 13 bankruptcy is designed to reorganize your standing debts while keeping things balanced and fair between you and your creditors. You can’t propose a repayment plan to your trustee and the courts, however, if you don’t prove your good faith in repaying debts in full within a five-year period.

Good Faith:

Filing your petition for Chapter 13 bankruptcy covers most of the required information, forms, and schedules for the process, but you must also provide your proposal for a repayment plan. The outline of your plan proposal describes your monthly payments towards priority debts, secured debts, and unsecured debts, and the term in which the selected amount of those debts will be repaid. This is where your “good faith” comes in.

In order for your petition to be fully-approved by U.S. Bankruptcy Courts, your bankruptcy trustee must be able to approve your good faith in using all your disposable income to meet your monthly repayment requirements.

Lacking Good Faith:

There are several reasons why your bankruptcy trustee may determine that you’re not in good faith for your repayment plan. Most of the time, if you’re lacking good faith, there will be some inconsistencies with your income, deductions, or petition. For example, if your current monthly income is subject to change during your repayment period and you do not notify the courts, your plan may be denied. If you’re found lacking in good faith, you may respond with an explanation, and your trustee may reexamine your standing.

Behm Law Group, Ltd. can help you navigate the process of determining a repayment plan and holding a good faith standing when you file your petition for Chapter 13 bankruptcy in St. Peter, MN. If you’re considering bankruptcy contact us at (507) 387-7200 today.

Most individuals considering filing for bankruptcy have two main options: filing for Chapter 7 bankruptcy or filing for Chapter 13 bankruptcy. In the case of Chapter 7, a filer has qualified for this type of bankruptcy after passing the Means Test, determining that their debts and financial obligations outweigh their disposable income and estate value. The process of Chapter 7 liquidates assets, uses asset value to repay creditors, and discharges debts. However, even if a high income prevents qualification for Chapter 7, accumulated debts can cripple finances. If you cannot file for Chapter 7, you may choose debt reorganization with Chapter 13 bankruptcy. For any type of petition, Behm Law Group, Ltd. can help you through the process of filing for bankruptcy in Mankato, MN.

Chapter 13 bankruptcy is designed to take your monthly reasonable and necessary living expenses and weigh them against your monthly “net” take home income and the value of your assets. This type of bankruptcy reorganizes your debt repayment, effectively restructuring the process by which the creditors are paid to the best possible advantage to you.  Generally, unsecured creditors (credit card debts, medical debts, etc.) and priority creditors (tax debts, child support arrearages, etc.), receive no interest, no late fees, or any other default fees through the Chapter 13 process.

Because Chapter 13 cases vary so widely, it can be difficult for prospective bankruptcy candidates to apply the basic description of debt reorganization onto their own situation. Though the provisions of a Chapter 13 repayment plan may change from case to case, there are some constants across the board.

Amount to Pay

With most debts, a Chapter 13 repayment plan doesn’t change the amount you have to pay each particular creditor.  Rather, you make one monthly payment to a Chapter 13 trustee and the trustee divides that payment among your creditors pursuant to the provisions of your Chapter 13 plan.  The debts you will have to pay in full can include:

1. Priority debts, such as alimony, child support, tax debts, and wages owed to employees.
2. Mortgage delinquencies, if you plan on keeping your home throughout the bankruptcy process.

Other debts, however, may only be partially paid. This portion can be between 0% to 100% of what you originally owed the creditors. What you will have to pay is determined by your nonexempt estate value, your disposable income available to repay debt, and the period of your repayment plan.

Repayment Plan Length

Simply put, your income level directly determines the period of your repayment plan. There are two basic options when it comes to balancing your income with your debt repayment.

1. If your monthly income is higher than the monthly median income in Minnesota for a household of similar size to your own, you will be required to file a five-year repayment plan.
2. If your monthly income is lower than the monthly median income in Minnesota for a household of a similar size to your own, you may opt for either a three-year plan or a five-year plan.

Chapter 13 bankruptcy may seem more complicated than Chapter 7 bankruptcy, but for many, it’s exactly the right choice for financial recovery. For more information about filing for bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200.