Protecting Your Case with the Help of an Expert Bankruptcy Attorney and Understanding the Statute of Limitations for Bankruptcy in Redwood Falls, MN

Bankruptcy in the U.S. is a nuanced system for individuals and businesses alike. Like other legal processes, it’s best to proceed with a trained professional who can protect and counsel you from start to finish. Because filing for bankruptcy in Redwood Falls, MN, is rarely a straightforward process, taking advantage of the knowledge and professional standing of a bankruptcy attorney is key to a successful case. Behm Law Group, Ltd. bankruptcy attorneys are dedicated to providing expert counsel to our community households and local businesses.

 

If you’re struggling with overwhelming debt, filing for bankruptcy may be a viable way to recover for long-term financial stability. Filing for bankruptcy without a bankruptcy attorney, however, is not something we recommend. Not only is bankruptcy a difficult process to tackle without professional training and a working knowledge of the U.S. legal system overall, but without the protection of a lawyer, you’ll be vulnerable to aggressive creditor judgments and other potential claims against your case. Additionally, you may set yourself up for accusations of bankruptcy fraud, intentional or not, without the counsel of a bankruptcy attorney.

 

Even if you’re not criminally charged with bankruptcy fraud, the consequences of a case dismissed based on fraudulent behavior can be hard to come back from if you ever find yourself in the position to file again. This is because of the strict rules set in place through the federal bankruptcy fraud statute of limitations. A bankruptcy attorney can help you navigate this.

 

The statute of limitations is based on evidence of bankruptcy fraud and dictates when an individual or business can file a petition after a case dismissal or charge against them for fraudulent behavior. A limitation period is set into place for each filer’s own situation and the fraud committed, and that period determines a time period during which the government may press criminal charges.

 

This time period is dictated depending on certain circumstances unique to each case. Primarily, the limitation period depends on the type of crime committed in a case:

 

  1. If a filer commits a crime as a single event, like falsifying a document or lying under oath, the limitation period begins on the date of the crime.
  2. If a filer commits a crime in multiple events, such as a crime that takes several actions to complete, the limitation period begins when the last action is performed.
  3. If a filer commits a continuing crime, like hiding an asset or account, the limitation period starts with the beginning of the crime and continues until the property is revealed.

 

In bankruptcy cases, crimes generally include asset hiding – which provides a limitation period starting when the court grants a discharge, dismisses the case, or denies the discharge – or all other types of bankruptcy crimes – which provide a limitation period of five years.

 Protect Your Case With a Bankruptcy Attorney

If you’re considering filing for bankruptcy in Redwood Falls, MN, protect yourself from accidental fraud and get the help you need to file a strong, successful case. Get started with a bankruptcy attorney from Behm Law Group, Ltd. today and contact us at (507) 387-7200.

 

Differences Between Discharge, Settlement, and Dismissal for Debt Relief in New Ulm, MN

In this fast-paced world, it’s easy to rack up a lot of debt from various sources. Whether you have debts from mortgages, cars, credit cards, medical bills, or any number of other sources, you have the obligation to repay those debts. If you’re unable to meet debt payments each month, there are several methods to resolve debts, but the most effective for those struggling with severe debt is through the process of bankruptcy. Behm Law Group, Ltd. offers the expert advice and protection you need to receive debt relief in New Ulm, MN by filing for bankruptcy.

 

The three primary methods individual consumers and businesses can receive debt relief are debt settlement, discharge, or dismissal. These processes happen very differently and will affect your legal standing differently in both the short and long term.

 

Discharge of Debt

 

Debt discharges are only possible through the process of bankruptcy. If you file for Chapter 7 bankruptcy, many of your debts will be discharged during the asset liquidation process. This means your debts will be dissolved in exchange for the sale of your non-exempt property. The value of your non-exempt assets sold will be paid to your creditors. You may also receive a discharge in a Chapter 13 case for some unsecured debts (you will be required to repay 0% to 100% of those debts in your Chapter 13 repayment plan). Discharge through bankruptcy is permanent and government sanctioned.

 

Debt Settlement

 

Some debtors choose to find debt relief outside of bankruptcy through debt settlement. To settle a debt, you must negotiate that process with your creditor without the protection of a court process. This can be tricky and will reflect negatively on your financial records. Additionally, you may still have to pay taxes on the original amount of a reduced or settled debt, and any late payments or owed taxes on this debt will also become a detriment to your credit.

 

Debt Dismissal

 

This is a more unusual form of debt relief that only occurs if you can prove that your creditors are harassing you, abusing their authority (for example, charging extremely high late payments), your identity was stolen to gain the debt, your information on debt paperwork is incorrect, the items or services you took the debt on for were never received, or if your creditors can’t prove you owe the debt. If you suspect you may be able to prove these things, debt dismissal may be a viable option for debt relief, but in most cases, debt settlement or bankruptcy are more realistic choices.

 

Debt settlement has its place, but filing for bankruptcy is often the best long-term, concrete solution for debt relief. To learn more about receiving debt relief in New Ulm, MN and filing for bankruptcy, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Minimum and Maximum Debt Amounts Allowed to File for Bankruptcy in Worthington, MN

If you’re preparing to file for bankruptcy, it’s important to understand the limitations before entering into the process. Bankruptcy is an extremely beneficial tool for those struggling with debt, even with a high income. Despite its effect on your financial credit rating, bankruptcy is an effective solution for immediate financial recovery and long-term stability for an individual consumer or business. The requirements of bankruptcy are strict in order to prevent abuse, but with the help and protection of Behm Law Group, Ltd. attorneys, you can successfully file for bankruptcy in Worthington, MN.

 

Because most individuals and small businesses that file for bankruptcy don’t have the legal knowledge of a trained attorney or a team of lawyers a larger company might have to help them through the process, it’s critical to take advantage of professional assistance in the form of a bankruptcy attorney. Behm attorneys are highly knowledgeable and capable of working through your case for a positive outcome as well as protecting you from creditor harassment and advising and educating you along the way.

 

One common concern we hear from our clients is about debt amounts when entering the bankruptcy process. Some of our clients worry they may have too little debt to file, while others face the opposite. When it comes to minimum and maximum debt limits, the requirements are, fortunately, quite straightforward.

Minimum Debt

 

There is no court-set limit on the minimum amount of debt you need to file for bankruptcy. You may have limits on your income if you plan on filing for Chapter 7 bankruptcy, but all filers must pass the Means Test, which will determine your eligibility. The only limits on a minimum debt will be put in place by your own judgment. If you have a debt amount so low that it doesn’t justify bankruptcy and attorney costs, you may want to resolve your debts another way. Additionally, if you have high debts but they are excepted from the bankruptcy discharge, you won’t gain much from a case. High credit card debts, medical bills, mortgages, and car loans are all common debts that will be relieved in the bankruptcy process and will certainly justify a case even if they’re as low as $5,000.

 

Maximum Debt

 

The U.S. Bankruptcy Court does set a maximum limit on the debt amounts that can be resolved in a bankruptcy case. These limits are very high, but occasionally we see clients that struggle with this compromise. For a Chapter 13 case, this maximum amount currently stands at $1,184,200 for secured debts and $394,725 for unsecured debts. Chapter 7 doesn’t have a current maximum debt limit, but again, you must pass the Means Test to be eligible for a petition.

 

 Find Expert Help When You File for Bankruptcy

If you have debts you would like to resolve through bankruptcy and want to learn more about your eligibility and the process as a whole, contact Behm Law Group, Ltd. today at (507) 387-7200 for more information about filing for bankruptcy in Worthington, MN.

The Role of Mechanic’s Liens in the Event of Bankruptcy in Mankato, MN

When you work with a lender to enter into a property loan agreement, you will most likely have a voluntary lien built into that contract. Property liens are effective methods for lenders to secure the loan value they give you in case of bankruptcy or other inability to repay. All liens act to protect the lender, but they can take many different forms in addition to the common car lien or mortgage lien. If you are struggling to meet debt payments on a lien regarding secured debt and you choose to file for bankruptcy in Mankato, MN, Behm Law Group, Ltd. offers the legal advice and professional counsel to help you build a strong case and understand how your lien-secured property and debts will be handled.

 

While the common types of liens often deal with homes, cars, and other properties most individuals and businesses own, there are specialty liens that come into play for specific situations. One the more unusual liens you may encounter is a Mechanic’s Lien.

 

How it Works

Like other liens, a Mechanic’s Lien protects the lender if a borrower can’t repay the loan. These liens are sometimes called construction liens because they come into play for contractors and construction crews as well as mechanics, suppliers, designers, and professional builders. A Mechanic’s Lien is a legal document that gives a mechanic or other specified professional who signs and files the lien the right to collect payment. If you hire a contractor to remodel your kitchen, for example, that contractor is allowed to do several things if you refuse payment for services. First, they are allowed to file a lawsuit against you for the amount owed, and second, they can contribute to forcing you into bankruptcy if you have other creditors you’ve also refused or been unable to pay. Whatever action they take, they will have to file a Mechanic’s Lien to be guaranteed repayment.  They are secured as to the asset that they perform services on.  For instance, if a roofer installs a new roof on your house, the roofer could obtain a mechanic’s lien against your house as security for repayment.

 

How it Works in Bankruptcy

 

If you file for bankruptcy, voluntarily or otherwise, the creditors involved in your case that hold a lien over your property—a Mechanic’s Lien, or any other type of lien—are considered secured creditors. This means they will come first in line (along with priority creditors, such as tax debts and child support or alimony debts) for repayment in the event your assets are liquidated, or you propose a repayment plan. In a Chapter 7 case, secured creditors receive the value gained from liquidating your assets that serve as their collateral before any other creditors, and in a Chapter 13 case, secured creditors are either repaid the value of their collateral securing the amount you owe or you must surrender that collateral.

 

Whether you file for Chapter 7 liquidation or Chapter 13 reorganization, your secured creditors will receive the highest payment priority in your case, including those who file for a Mechanic’s Lien. To learn more about liens and the role they play when you file for bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. today.

Debt Domestication and How Foreign Debts Resolve During Bankruptcy in Pipestone, MN

Debt laws vary from country to country, and within the U.S., those laws even vary from state to state. The legal minutia around the debts you owe can quickly become complicated even within Minnesota regulations, but when out-of-state debts and foreign debts are introduced, those difficulties can increase ten-fold.

 

These complications may never become a problem for the debtor if they continue to make regular payments month to month, but if the debtor misses payments or chooses to file for bankruptcy, it can be extremely difficult to wade through those legal waters without professional help. If you’re considering filing for bankruptcy in Pipestone, MN, and you have foreign debt in addition to your U.S. debts, Behm Law Group, Ltd. can protect you from creditor action and guide you through the process.

 

If you hold foreign debt, it can be discharged in your bankruptcy case. However, that debt is only officially discharged if your foreign creditors domesticate and enforce that debt.

 

Enforcing Foreign Debt

 

When you move from another country, your creditors in the original country cannot pursue collection actions unless they domesticate that debt, or you return to that country. This rule applies to bankruptcy as well, which means that if you want to discharge a foreign debt, your creditors must domesticate that debt or drop the debt completely. It may be easier to convince your creditor to domesticate a debt if they’ll gain some reimbursement from asset liquidation or a repayment plan.

 

Domesticated in Bankruptcy

If your foreign debt is domesticated, it will be handled in bankruptcy depending on the type of chapter you file. If you file for Chapter 7 bankruptcy, your non-exempt assets with value in excess of your allowable bankruptcy exemptions are liquidated and your debts are discharged. Complications with foreign debts arise if the country you owe debt in has differing bankruptcy laws. In most cases, these issues are related to the portioning amount of the values from liquidated assets, but this is an issue the courts will resolve for you.

 

When you file for Chapter 13 bankruptcy, similar issues arise with your foreign creditors in the repayment plan structure. Chapter 13 works to restructure your debts into a manageable repayment plan where you repay priority and secured debts in full and all other debts in predetermined portions from 0%-100%. If your foreign debts are unsecured, the courts may have issues deciding how much you’ll repay those creditors when their country’s legal system dictates higher or lower repayments.

 

Your foreign debts can be resolved in your case, but it’s important to understand how they’re enforced and what complications may arise in bankruptcy. To learn more about filing for bankruptcy in Pipestone, MN, or to get started on your case, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Key Factors that Affect the Repayment Plan Structure of Bankruptcy in Windom, MN

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.

 

 

Breakdown of Payments to Unsecured Creditors for Chapter 13 Bankruptcy in Pipestone, MN

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.

How Discharge Plays a Part When You File for Bankruptcy in Mankato, MN, More than Once

The purpose of the U.S. bankruptcy system is to relieve individuals and businesses from debts and protect creditors from severe losses. In a nutshell, this process is built to be balanced and fair for all parties involved. This also means that the nature of the bankruptcy system prevents filers or creditors from abusing the benefits that are offered through court regulations. Behm Law Group, Ltd. offers the legal advice and assistance you need to get the most out of filing for bankruptcy in Mankato, MN, while sticking to the nuanced rules and requirements of the court.

 

One of the sticking points for the bankruptcy court is when filers appear to be taking advantage of the system with multiple filings. It’s not unacceptable to file for bankruptcy more than once in your life, but when, why, and how you file multiple bankruptcy petitions depends on certain timelines and the failure to abide by those timelines can affect the outcome of your case.

 

To file a successful case and be eligible for a bankruptcy discharge, it’s important to understand the timeframe stipulations for each type of bankruptcy:

  1. Chapter 7 cases have to be filed eight years apart for one to be eligible for a discharge. This period starts on the date you file your most recent bankruptcy petition. For instance, if you filed for chapter 7 bankruptcy relief on January 2, 2011, you would need to wait until January 3, 2019 to file chapter 7 bankruptcy in order to qualify for another chapter 7 bankruptcy discharge.
  2. Chapter 13 cases can be filed much sooner. The period required to pass before you can re-file for Chapter 13 bankruptcy is only two years from the date you file your most recent petition. This means that you could potentially stay within a debt-restructuring bankruptcy plan interminably. Chapter 13 bankruptcy cases must last at least 3 years (they can last up to 5 years,) so you could file a chapter 13 bankruptcy case, get a discharge in 3 years and then file chapter 13 right away again.  For instance, if you filed for chapter 13 bankruptcy on January 2, 2015, your case would have concluded in January 2018 but you would have qualified to file for chapter 13 bankruptcy relief again as of January 3, 2017.

 

Because you can file for either Chapter 7 or Chapter 13 bankruptcy, you may experience multiple filings of each type. In these cases, the timeframes depend on which case came first:

  1. If you file for Chapter 7 first, you will face a waiting time of four years before you can file for Chapter 13, starting with your Chapter 7 petition date. For instance, if you filed for chapter 7 bankruptcy on January 2, 2015 and received a chapter 7 discharge, you would not be able to file a chapter 13 bankruptcy and qualify for a chapter 13 discharge until January 3, 2019.
  2. If you file for Chapter 13 first, you will generally have a waiting time of six years before you can file for Chapter 7 and qualify for a chapter 7 discharge. However, if you’ve fully repaid your unsecured creditors during your Chapter 13 repayment period, you may be able shorten the waiting time with permission from the court. You can also file within a shorter period if your chapter 13 case was in filed good faith, you represented your best effort in the payment plan, and you paid at least 70% of allowed unsecured claims.

 

If you’re considering filing for bankruptcy, we can help whether it’s your first time or not. Contact Behm Law Group, Ltd. at (507) 387-7200 for more information about our counsel and support for bankruptcy in Mankato, MN.

How Case Issues are Handled in Court When Filing for Bankruptcy in New Ulm, MN

Individual consumers and businesses that are unable to meet monthly payments on loans and other debts for several months have few options for relief and recovery from these financial struggles. For many, debt relief outside of legal action doesn’t solve financial problems or reverse unwise decisions long-term. If you’re finding it impossible to make payments on your debts, filing for bankruptcy might be your best option.  Behm Law Group, Ltd. offers the professional legal advice you need to navigate complicated courts systems and the process of filing for bankruptcy in New Ulm, MN.

 

A critical responsibility of bankruptcy attorneys is to hold a deep knowledge of the legal intricacies of bankruptcy and an astute understanding of how the bankruptcy court works. Because Behm attorneys are trained and experienced in bankruptcy law, we can provide our clients insight into the court system and guidance when petitioning for bankruptcy.

 

The Bankruptcy Court

 

The bankruptcy court is a federal court, but it operates separately from other federal courts such as district courts or administrative law courts. This means that, while bankruptcy law is a federal concern, there are various aspects of state law that come into question when a bankruptcy case is filed. These “state vs federal” regulations in bankruptcy vary from state to state, but the majority concern the core issues of a case.

 

Core Issues when Filing for Bankruptcy

When you file for bankruptcy, you can choose from two primary ways the court system has established for handling your debts. You can file for liquidation (commonly Chapter 7 bankruptcy for both individuals and businesses), or debt reorganization (Chapter 13 bankruptcy for individuals and a mixed bag of Chapters 11, 12, and 13 for businesses, farmers and fishing businesses). The core issues involved in all types of bankruptcy cases include the major factors that determine the outcome of your case including income, debt value, property value, exemption amounts, types of debts, reorganization plans, creditors, and any other circumstances that directly affect your bankruptcy case.

 

Federal vs. State

 

For most of these core issues, federal law determines how your case is handled depending on which type of bankruptcy you choose. However, a few issues are resolved differently by the state, most notably exemptions. Additionally, non-bankruptcy issues that indirectly affect a bankruptcy case can be resolved by a district judge if the parties involved don’t accept the initial decision of the bankruptcy judge on the matter.

 

If you’re wondering whether filing for bankruptcy is right for you, a consultation with Behm Law Group, Ltd. Behm Law Group, Ltd. can help you make the best decision for your financial situation. Our attorneys can guide you through the process of filing for bankruptcy in New Ulm, MN and provide our knowledge of the inner workings of bankruptcy court. For more information about filing for bankruptcy and the counsel we offer, contact us at (507) 387-7200 today.

 

 

Understanding Assignment and Bankruptcy in Mankato, MN

Businesses struggling with unmanageable debts have a range of options for debt relief at their hands. While debt consolidation and debt management plans are popular options that’ll keep a debtor’s overall credit in good standings, there are often situations when these debt relief options only act a bandage instead of a true healing process. When you’re unable to pay your debts and don’t have any way of increasing your income in the next few years, filing for bankruptcy is your best option. Behm Law Group, Ltd. offers the legal advice and assistance you need to successfully file for bankruptcy in Mankato, MN.

 

Bankruptcy is designed to help both debtors and creditors out of a sticky situation, but some creditors may try to dissuade you from filing for Chapter 7 bankruptcy and instead liquidate your business outside of court with an assignment process.

 

ABC

 

Assignment for the benefit of creditors (ABC) is an option for business debtors to privately sell assets and return the value of those sales to creditors. When creditors are awarded these sales, they’ll release debtors from payment obligations. This option might be a way to avoid attorney fees and court proceedings, but the process overall is more beneficial to your creditors than to you.

 

Why is Bankruptcy Better?

 

Filing for bankruptcy, despite its effect on your credit, is a better option for business debtors than ABC for a number of reasons:

  1. In bankruptcy, creditors are forced to allow asset liquidation for all dischargeable debts, but in an ABC, they can choose to forgo approval of discharge on debts higher than the secured collateral value. For example, if you owe $5,000 on an auto loan, but the car is only worth $4,500, the creditor would not have to discharge the debt in an ABC.
  2. Unincorporated businesses are not protected during an ABC against creditors seizing the business owners’ personal assets. This means you could be forced to liquidate your personal car or other property in an ABC. In bankruptcy, however, the debts and the assets of incorporated and unincorporated businesses are generally not involved with the liquidation of one’s personal property.
  3. Personal collateral guarantees and other forms of personal security interests on business debts are not removed in an ABC as they would be in bankruptcy. This means if your property was used to secure a loan, creditors can force you to liquidate that property even if it’s not connected to your business in other ways. Bankruptcy allows for exemptions to prevent you from losing your property even if it’s tied to your business debt.

 

ABCs have their benefits, but most of those benefits inure to your creditors. Filing a bankruptcy is the most effective way to remove debt with minimized liability to you and your property. To learn more about the advantages of filing for bankruptcy in Mankato, MN and to find out how we can help, contact Behm Law Group, Ltd. at (507) 387-7200 today.