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What to Do When Creditors Harass You After Your Chapter 7 Debt Settlement in Windom, MN

Those who have accumulated debts they can’t handle alone often find rescue in filing for bankruptcy. Today’s U.S. Bankruptcy Code is designed to protect individuals and businesses from falling into even more critical financial situations. The idea of being bankrupt can leave a bad taste in one’s mouth and, while one might not enjoy having to go through bankruptcy process, there are many benefits. Filing for Chapter 7 bankruptcy alleviates debt and opens the door to a fresh start financially. Behm Law Group, Ltd. can help you through the process of filing for bankruptcy and completing your debt settlement in Windom, MN.

Chapter 7 bankruptcy is designed to discharge the majority of your debts and allow you to retain your assets. With this form of bankruptcy, you will have a clear beginning, middle, and end of the process.

Do debts still matter?

When you file for Chapter 7 bankruptcy, your debts are addressed, and when the process is over, your debts won’t come back into your life. They are permanently discharged.  The only lingering effect of Chapter 7 bankruptcy is that your case will stay on your public credit profile for 3 to 6 years. After filing for Chapter 7, the debts that were discharged are gone forever.  You will not have to handle other financial consequences from the debts discharged in your case.  Paradoxically, you will be more of an attractive credit risk for creditors than you were before your case was filed.  This is because future creditors know that the creditors discharged in your bankruptcy are gone for good and that they will now be able to be first in line for payment from you going forward and will not have to be in competition with your previous creditors.

In short, the debts addressed in a Chapter 7 case don’t matter anymore. You don’t continue making payments, and you won’t be in contact with your creditors again.

Why are my creditors still harassing me?

But if your debts don’t matter after you file for Chapter 7 bankruptcy, why are your creditors still in contact with you, and in many cases, still harassing you? There are several reasons why this might be happening. Most of the time, your creditors haven’t heard that you’ve entered into the bankruptcy process yet. Even if your case is not completed, your creditors are legally obligated to stall collections. However, it can take up to two weeks for your creditors to be notified that you’ve entered into the process. If it’s been over two weeks and your creditors are still harassing you, they may be trying to get away with illegal collections. Creditors may try to take advantage of your lack of knowledge about the nuances of bankruptcy by telling you that you filed for the wrong kind of bankruptcy, that your debts aren’t covered by your case, or that you still have to pay interest on a settled debt. Behm Law Group attorneys protect our clients from this fraudulent behavior as we work with you through the bankruptcy process.

If you’re considering filing for Chapter 7 bankruptcy and you’re concerned about your debt settlement in Windom, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today for a consultation.

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Priority, Secured, and Unsecured Claims and How These Types of Debts are Treated With Bankruptcy in Mankato, MN

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.

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Scams, Frauds, and Traps in the Path of Those Searching for Debt Relief in Worthington, MN

Credit repair, debt relief, debt consolidation, and debt erasure are all tempting ideas to those seeking reprise from their financial struggles. Unfortunately, most of the offers that you see advertisements for or receive by phone, email, and mail are fraudulent. The rise in credit card debt over the last 20 years in combination with several dips in the economy from 2001 onward has significantly increased scammers’ prospects of taking advantage of those in debt. If you are struggling financially, Behm Law Group Ltd. provides legal support for bankruptcy proceedings and information about debt relief in Worthington, MN.

Promises to repair credit debt or erase bad credit are frequent claims of scammers in the world of debt and bankruptcy. While these scams and frauds are dangerous situations to fall into, there are some situations where legal and legitimate debt relief is possible.

Recognizing Fraud 

Because the majority of companies or organizations promising credit repair and debt erasure are fraudulent, there are often clear signs of the traps these scammers want you to fall into. The most obvious signs of fraud include:

  1. Withholding information about your legal rights or failing to provide legalized, clear-cut terms
  2. Requiring an upfront fee or an initial payment before services are provided
  3. Pushing you to dispute your credit report in entirety
  4. Encouraging you to take on a new credit identity

What these scammers do is illegal, and taking part in any of their proceedings may leave you subject to indictment and force you into legal proceedings for debt fraud. Find out more details about credit repair fraud and companies offering illegal services here.

 Legal Debt Relief

Bankruptcy is almost always an option for those struggling with unmanageable credit card debt or debts accumulated from a variety of sources. Behm Law Group Ltd. can help you throughout the process of filing for bankruptcy, but even throughout bankruptcy proceedings, there are ways to begin improving your credit slowly but surely. Approved credit counselors can help you understand how your debt was accumulated and how to avoid such situations in the future.

If you’re worried about your financial situation and have been tempted by the calls about credit repair and debt erasure, contact Behm Law Group Ltd. today at (507) 387-7200 for information about bankruptcy and debt relief in Worthington, MN.

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Avoiding Mistakes When Filing for Bankruptcy in Mankato, MN Behm Law Group offers Bankruptcy Advice

Filing for bankruptcy may seem daunting and complicated, but with the right assistance and advice during the filing and discharging process, bankruptcy may be the best thing that has happened to you financially in a long time. U.S. Bankruptcy Courts don’t exist to belittle you, shame you, or leave you out to dry during the filing process. However, there are some occasions that may make it seem that way if you forego the expert legal help our attorneys at Behm Law Group, Ltd. can provide when filing for bankruptcy in Mankato MN.

There are several common, yet crucial, mistakes that debtors can make when filing for bankruptcy. Without legal assistance, you could be subject to making mistakes concerning these aspects of your financial situation during the filing process:

Settling Debt: If you have begun the filing process, you should avoid paying your unsecured creditors (creditors that do not have collateral) such as credit cards, medical debts and other debts that you do not wish to retain. These debts will be discharged in the bankruptcy. Continuing to pay them will neither improve your credit standing following the bankruptcy nor incentivize creditors to lend you credit. Paying on these debts is like “throwing good money after bad”. It will do absolutely nothing for you. Of course, you should continue to pay on secured debts (creditors that do have collateral), such as mortgage lenders and vehicle lenders, that you want to retain.

Retirement Funds: Because your creditors legally cannot touch your retirement account, you should not cash in your funds until the process is complete. You should never use your retirement money to “settle” your debts. By doing so, you are essentially wasting a financial “nest egg” that you have worked hard to establish that you can fully protect in bankruptcy.

Family Loans: Avoid paying off family loans or helping family and friends financially during or directly before the filing process. Your creditors and the bankruptcy trustee administering your bankruptcy case may bring a lawsuit against your family and friends to recover the money you paid them.

Property: Hold all your current property in your name during the bankruptcy process. DO NOT transfer property out of your name. If you do transfer assets out of your name, you will most assuredly lose the property you transferred.

Lawsuits: Because pending lawsuits or lawsuits against you will continue until your bankruptcy is filed, you should not ignore these suits. Our attorneys can help advise you on lawsuits and determine whether or not you should respond before a bankruptcy is filed.

Purchases: Making large purchases on your credit cards or cash advances in other forms is a frequent mistake made during the filing process. Wait until the process is complete to ensure you won’t still be accountable for these charges.

The professional attorneys at Behm Law Group, Ltd. are here to keep you from making these common mistakes and other important missteps when it comes to filing for bankruptcy in Mankato, MN. For more information, contact us at (507) 387-7200.

 

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How to Buy Back-to-School Supplies in Owatonna, MN, Without Having to Declare Bankruptcy

Parents and kids in Owatonna, MN are getting geared up for the new school year. One inevitable expense is outfitting and supplying kids with what they need to head back to the classroom. It is possible to spend wisely on supplies without going broke and facing the prospect of bankruptcy, according to the professionals at Behm Law Group, Ltd.

Here are several money-saving strategies to lessen the financial burden of getting your kids ready for school this year:

  • Determine what you really need to purchase. Check each child’s closet and make a list of only what each one truly needs to head back to school. Round up all of the office and school supplies you already own. Put them in a central location so you can make a list of what you have. Take your lists with you when you shop.
  • Stick to your lists. The teacher’s supply list at the start of the school year is daunting enough, so don’t waste money on unlisted items.
  • Set limits. Draw up a budget and make a commitment to stick to it. Set limitations with your kids, and speak with them about money-based values. Try to stay away from trendy, cheaply made merchandise.
  • Spread your spending over two or more pay periods, if possible, to help you stick to your budget.
  • Shop end-of-summer sales. Snap up discounted clothing that can be worn well into fall and next spring.
  • Host a back-to-school swap. Round up a couple of moms with kids the same gender as yours, but different ages, and host an annual clothes swap. Trade books and tools, too.
  • Hit up the Dollar Store or Dollar General for great deals on basic supplies. You’ll be surprised at what you’ll find and how much you’ll save.
  • Use coupons wisely. Scour your Sunday newspaper for coupons and search on-line coupon sites. To cut down on driving, remember that many stores offer price and coupon matching.
  • Pay with cash vs. credit cards. This allows you to keep a tight rein on your budget. Once your cash is gone, you’re done shopping.

If your back-to-school expenses and other bills seem unsurmountable and you’re thinking about filing for bankruptcy in Owatonna, MN, give Behm Law Group, Ltd. a call at (507) 387-7200 to discuss your options. We’re standing by to assist you with this very difficult decision.

 

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Two Ways to Discharge Debt in the Marshall, Minnesota Area

In the Marshall, Minnesota area, students may find repaying their student loan debt challenging. For those former students struggling to overcome the weight of crippling expenses and education-related debt, Behm Law Group Ltd. can help!

Last week, we discussed how to examine whether or not substantial student loan debt could be discharged through bankruptcy. The first step is to take the Brunner Test, and after determining your personal financial situation regarding your ratio of debt to credit, it’s important to take a look at your options for discharging student loans through bankruptcy.

Here are two different options for discharging your personal student loan debt:

  • Privacy Issue: Did you utilize student loans to help pay for your private college education? If so, you may be able to discharge your student loans by redefining their purpose! Federal aid is often not available for students attending private or smaller schools, which makes private student loans a necessity rather than a choice. Since the choice to use federal student aid was not available, these private loans can be considered something other than an “education” loan and can be discharged legally through bankruptcy.
  • Attendance Record: Did you use federal student loans in order to pay for anything other than tuition or school fees? In the past, some folks struggling with student loans and bankruptcy have argued that non- “cost of attendance” expenses, or non-tuition related expenses such as computers, can be discharged from their student loan debt. However, borrowers beware! Oftentimes, loans require that students initially agree to consider additional expenses within the “cost of attendance” when getting their student loans.

Although student loan debt and bankruptcy can be equally frightening to folks in the Marshall, Minnesota area, there are options to consider. By examining the definition of these loans and considering the classification of “cost of attendance” loans, students can save themselves from years of challenging payments or debt.

For more information regarding student loan debt and related bankruptcy, contact the professionals at Behm Law Group Ltd.!

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Avoiding Ponzi Schemes and Bankruptcy in the Mankato, MN Area

In the Mankato, Minnesota area and throughout the rest of our country, folks have heard stories about Tom Petter’s infamous ponzi scheme involving false electronic sales. Although the case was filed approximately seven years ago, difficulties in processing this complex case have caused a series of delays and a number of bankruptcy filings from Petter’s victims. Fortunately, this case recently had another day in court, bringing Petter’s victims closer to justice and financial stability.

To maintain your own financial health and well being, it’s important to understand the warning signs related to fraud or ponzi schemes. Here are a few signs that a deal is likely too good to be true and that it may lead you to bankruptcy:

  • Advise Safely: If you are consulting with a financial advisor, make sure that they’re accredited and truly qualified to help you with your money. Allowing others access to your banking information and statements requires a great deal of trust, so in order to avoid potential bankruptcy, be sure to do your research!
  • Custodian Versus Manager: Before selecting an advisor, understand the distinction between an advisor and a custodian. A custodian only possesses your accounts, whereas a manager actually makes transactions. These two positions should be separate, otherwise you’re allowing one person far too much access to your finances, and you could ultimately be heading towards bankruptcy!
  • Be a Skeptic: Does something about your banker seem odd? Are you receiving a pitch for a strange product or service that seems too good to be true? It likely is too good to be true, and it may cause you personal financial woes or even bankruptcy. It’s important to be aware of all the risks and to have all the information before committing yourself financially!

Before making these important financial decisions in the Mankato, Minnesota area, be sure that you understand exactly what you’re getting into and who is getting into it alongside you. With a discerning eye, you’ll be able to avoid ponzi schemes and the resulting bankruptcy or financial woes.

For further information regarding bankruptcy, contact the professionals at Behm Law Group Ltd. today.

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The Right Time to File for Bankruptcy in Redwood Falls, MN and Popular Businesses That Nearly Filed for Bankruptcy

Knowing when to file for bankruptcy is a financial decision that can make or break the bank. You may feel like you’re sinking and just floating with your head above the water. Behm Law Group, Ltd. can give you the insight you need to know if your financial situation might necessitate filing for bankruptcy.

The right time to file for bankruptcy is when you realize you’re in a financial slump that you may not be able to get out of for years to come. If your debts surpass your income, if you use your credit cards to pay for necessities like groceries, gas, and utility bills, or if you only make the minimum payments on most or all of your credit cards, you may have to consider declaring bankruptcy.

Here are a few examples of companies that faced similar questions about whether to file for bankruptcy or not.

GM and Chrysler

The famous government bailout of the automotive industry kept them from filing for bankruptcy in 2009. The bailout was part of a plan to prevent the Midwest from going into a depression. The bailout kept an estimated 2.6 million jobs alive in 2009 and 1.5 million jobs in 2010, which also kept unemployment rates lower than they would have been.

American Apparel

The company was still just floating above water when its financers were ready to drop American Apparel. The company went into a debt-for-equity conversion and escaped filing Chapter 11 bankruptcy.  Lenders have taken $230 million in debt in exchange for ownership of the company.

Apple

The famous powerhouse company nearly went bankrupt in 1997 before its co-founder, Steve Jobs, stepped back in to save the company and came out with “cool” products like the iPod, iPhone, and iPad. Apple is now the most profitable company in history.

Kentucky Fried Chicken (KFC)

Kentucky Fried Chicken hasn’t gone bankrupt, but it is lagging behind against its competitor, Popeye’s. The company hasn’t introduced a new successful menu in quite some time and its southern fried chicken competition is blowing it away. In 2012, twenty-eight KFC franchises were bought out by Popeye’s in the St. Paul-Minneapolis area.

Many times a company or an individual may have to come to terms with the fact that filing for bankruptcy is the only way to relieve themselves of financial distress. Knowing your financial situation well and determining whether you should file for bankruptcy in Redwood Falls, MN is a dilemma that Behm Law Group, Ltd. can give insight on.

If you do decide to file for bankruptcy, the professionals at Behm Law Group can help you through the daunting process. Contact us today!

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You’re Not Alone Going Through Bankruptcy in St. Peter, MN: A List of Big Businesses That Have Gone Under in the Past Five Years

Going through bankruptcy in St. Peter, MN can be an intimidating process, one that might make you feel like you’re the only one going through that kind of struggle. Rest assured that is not true, and not only are you not alone in filing bankruptcy, but there are also well-known businesses that have filed for bankruptcy. Everyone, no matter how big or small, can file for bankruptcy when hard times hit. Behm Law Group, Ltd. can help you get regain some piece of mind when going through the bankruptcy process.

Blockbuster

The famed video rental giant filed for Chapter 11 bankruptcy in September of 2010. The company was simply unable to pay their debt. Of their 3,000 stores, they closed 110. In total, 402 underperforming stores closed in the wake of Blockbuster’s bankruptcy.

Borders

Borders filed for Chapter 11 bankruptcy in February of 2011. Its main downfall was taking far too long to create an e-reader, like the Nook and the Kindle. Borders fell behind its competition and closed 30% of its 642 stores.

Hummer

The company was hit hard in the recession. With rising gas prices, the Hummer’s mileage—10 gallons per mile that is—and the movement for more environmental friendly machines made the Hummer an obsolete vehicle.

Jennifer Convertibles

The trendy furniture store was also hit hard during the recession and due to a lack of funding, the company filed for bankruptcy in July of 2010 and has closed 78 of its original 142 stores. Today, the largest financer, Haining Mengu, owns approximately 90% of the company.

RadioShack

The electronics retailer announced that it would be closing 1,784 of its stores last year. It first opened 94 years ago, and in 2015 the company filed for Chapter 11 bankruptcy.

It’s good to note that bankruptcy did not mean certain doom for some of these businesses. Jennifer Convertibles is still around; however, the majority of the company is under new ownership. This shows that you can get back on your feet after filing for bankruptcy in St. Peter, MN. The attorneys at Behm Law Group, Ltd. will help you realize that bankruptcy is not as intimidating as it’s made out to be. Contact us today!

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Reinventing A Business After Bankruptcy in Mankato, Minnesota

It’s November in Mankato, Minnesota and all throughout the area, there’s already a sense of holiday excitement and cheer in the air. That’s because the first big November holiday is already happening this week, on November 5.

That’s right. It’s National Doughnut Day!

I’m sure the word “doughnut” brings a few visuals to mind. You may be thinking about glaze, frosting, and the words “Bavarian Cream” or “Bear Claw” might resonate with salivating celebrators. You may also be thinking about your favorite local bakery, or about a more national bakery such as Dunkin’ Donuts.

But there’s one doughnut bakery that may no longer be in the forefront of your mind: Krispy Kreme. Whatever happened to Krispy Kreme?

This doughnut day, we’re going to explore the history of this famous doughnut company. Krispy Kreme’s history with bankruptcy proves that it’s possible to go through a filing and successfully reinvent your business afterward. Let’s take a look at Krispy Kreme’s bankruptcy timeline:

  • 2003: In 2003, Krispy Kreme’s business was sweet! The company was heralded as “America’s Hottest Brand,” for both consumers and investors. This phrase made the cover of Fortune magazine.
  •  Post 2003: As a result of low-carb diet trends, the market for doughnuts decreased rapidly. While Krispy Kreme’s competitors rebranded or introduced coffee drinks to avoid decreased sales and bankruptcy, Krispy Kreme continued to operate the same way it always had.
  • 2007: Diet trends finally became too much, and in 2007, Krispy Kreme was forced to close a number of stores. Sales had decreased, and the company had to file for Chapter 11 bankruptcy.
  • Now: Krispy Kreme emerged from bankruptcy a few years ago and is back on the doughnut scene. Now, however, the company is choosing to focus on specialty and international products in addition to their classic glaze!

Although Krispy Kreme may no longer be “America’s Hottest Brand,” the company has managed to come back from their Chapter 11 bankruptcy and refine their approach to deep fried dough. They will still be here to celebrate with you this National Doughnut Day, and they’ll also be celebrating with Canada and France!

Krispy Kreme is proof that it’s possible to successfully reinvent yourself after a bankruptcy filing in Mankato, Minnesota. Even after filing bankruptcy, life can still be sweet! If you would like more information about your own bankruptcy filing, contact the professionals at Behm Law Group Ltd. today.