Category: Bankruptcy Information

Facing overwhelming debt is beyond daunting in our current economy. For many businesses in Waseca, MN, however, debt reorganization bankruptcy may offer a path towards financial recovery. The debt reorganization process allows debtors to restructure their debts, develop a manageable repayment plan, and regain control over their financial future. If you’re a business owner struggling with bankruptcy recovery, the Behm Law Group is here to offer support and counsel throughout the reorganization process.

Debt Reorganization Bankruptcy

Reorganization bankruptcy is a structured and court-supervised approach to debt relief. It is particularly well-suited for business owners who are hoping to continue operations while addressing their debt issues. If you survive on your business, this method of bankruptcy will give you an opportunity to catch up on missed rental payments, loans, or other secured debts without risking company operations.

Stopping the Calls

This process comes with the added benefit of stopping the calls from debtors and giving you room to breathe, so to speak. Once you file, you have a few months to craft a repayment plan with your legal team and advisors. It’s a legal way to press pause without losing the business you’ve built.

Limitations

Debt reorganization bankruptcy does come with limitations. If your business is struggling to make ends meet, you may still be advised to sell off assets or liquidate your business, even if it’s not explicitly required by the court. The ultimate goal may be to pay off your debt without losing your current assets outright, but if it’s not financially possible to do so, other strategies will be employed.

Making the Right Choice

If you’re not sure if debt reorganization bankruptcy is the right choice for you and your business, be sure to consult with a lawyer before filing. Making a snap decision about the type of bankruptcy that applies to your situation can lead to unexpected legal pitfalls. The legal team at Behm Law Group can help you understand the pros and cons of each bankruptcy type and bankruptcy recovery to guide you towards a complete financial recovery.

Business owners large and small in the Waseca, MN area can contact Behm Law Group today for bankruptcy recovery consultations. Make an appointment by calling (507) 387-7200 or by visiting our website to find out more information.

 

At Behm Law Group Ltd., we provide legal guidance, support, and protection for individual Chapter 7, 12, and 13 bankruptcy cases as well as Chapter 7 and Chapter 13 business cases. Chapter 7 works to discharge your debts in exchange for the liquidation of your non-exempt assets. Both Chapter 13 and 12 work as reorganization processes in different ways. When you file for reorganization bankruptcy, your debts are restructured into a manageable repayment plan that lasts a predetermined amount of time (usually three to five years). If you have debts you know you can’t repay, even with a steady income, we can help you file for reorganization bankruptcy, AKA wage-earner bankruptcy, in Fairmont, MN, and the local area.

Wage-Earner Bankruptcy

Chapter 13 is the most common type of wage-earner bankruptcy filed. Chapter 12 is limited to family farmers and fishers with specific requirements for eligibility. Aside from Chapters 12 and 13, individuals can file one other type of reorganization bankruptcy: Chapter 11.

Chapter 11

Chapter 11 is usually a bankruptcy reserved for corporations, limited liability companies and other kinds of businesses, but in some circumstances, individuals can use Chapter 11 to resolve their debts. Almost always, an individual Chapter 11 involves real estate investment reorganization or the handling of unsecured debts that are too high for Chapter 13 relief.

Real Estate Investors

Real estate investors filing for Chapter 11 bankruptcy can rewrite mortgages, reduce interest rates, and extend the terms of repayment. For example, a filer could rewrite a mortgage on a property worth $80,000 tied to a mortgage in the amount of $100,000. That $100,000 mortgage could be rewritten or crammed down to the actual $80,000 value of the property. Then the terms of repayment could be extended up to an additional 30 years, making the monthly payment requirement much lower.

Unsecured Debt

If filers have unsecured debts higher than $419,275, they can use Chapter 11 to reorganize those debts and their secured debts into a repayment plan. This reorganization process works similarly to Chapter 13. Chapter 11 repayment plans, lasting a predetermined amount of time, will include terms for the payment of secured debts under more favorable terms to you.  Chapter 11 repayment plans will also provide for only the partial payment of your unsecured debts at 0% to 100% of what you initially owed.

Disposable Income

Filers will have to dedicate all their disposable income to meeting monthly payments. Filers also can reserve discretionary income for household expenses and necessities, such as food, gas, utilities, and more.

Individual consumer Chapter 11 cases are not common. For any Chapter 11 or Chapter 13 cases for wage-earner bankruptcy in Fairmont, MN, and the surrounding area, Behm provides expert attorney services. Contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com today to learn more.

If you are facing debt you know you won’t be able to repay, filing for bankruptcy could be the most effective option for permanently resolving your financial issues. While filing for bankruptcy might seem scary, it’s actually a government-administered process that provides long-term, effective debt relief for thousands of households and businesses each year. There are several types of bankruptcy that handle debt in different ways. Chapter 7 liquidation bankruptcy is the most common format for an individual consumer case. In this process, the filer’s non-exempt assets are liquidated in exchange for the discharge of several kinds of secured and unsecured debts. For filers who don’t qualify for liquidation bankruptcy because their debt-to-income ratio is too high, Chapter 13 reorganization bankruptcy is another option for debt resolution. This process restructures debts into a three- to five-year repayment plan suited to the filer’s income. The adjusted payment terms are much more favorable than outside of bankruptcy.  No matter what kind of chapter you file, Behm Law Group, Ltd. can provide legal guidance and complete bankruptcy assistance in Redwood Falls, MN and the surrounding areas.

Behm attorneys can help you determine if bankruptcy will be the best choice for resolving your financial situation. If it’s the best course of action, we can help you start the planning process for your petition with expert bankruptcy assistance.

Before you file your petition, keep in mind several financial practices you can implement to get the most out of your case and to protect yourself from the consequences of fraud:

Financial Practices

• Upcoming bills: Depending on the case details, bankruptcy will most likely eliminate any utility debts.  However, any utility debt you incur after your bankruptcy case is filed will be considered “new debt” that will not be included for discharge in the bankruptcy process. This is also true with several other debts including medical and credit card debt.
• Fund transfers: When you file for bankruptcy, your financial transactions will be examined by your bankruptcy attorney and by the trustee assigned to administer your bankruptcy case. All your income, debts, assets, and accounts are examined, particularly your financial transactions for the six months prior to your bankruptcy filing.  Before you file your petition, avoid any unnecessary transfers between credit cards. That is, do not pay off one credit card with another credit card that may have a slightly lower interest rate.  If you engage in such a transaction, make sure that it’s reported in your petition. Also, transfers of any assets to other people can appear as fraudulent conduct if it seems like you’re moving assets to prevent the trustee from possibly liquidating them.
• Reasonable spending: Other actions that may look like attempts at bankruptcy fraud are certain spending patterns. If you charge excessively on a credit card right before filing a petition, such as taking a trip to Europe, it might look like you’re abusing the bankruptcy process to purposefully have that debt discharged. The same is true for purchasing luxury items and engaging in any other extravagant spending. Instead, be as frugal as you can while still trying to meet your living expenses.

Bankruptcy Assistance

To learn more about planning before filing your petition and getting the permanent bankruptcy assistance in Redwood Falls, MN you need, please contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

With the coldest months of the year just beginning, many family households that are in debt are wondering how the cold will affect their access to steady utility service. This blog is one part of a series covering frequently asked questions about utilities and debt relief through filing for bankruptcy in Minnesota. If your debts are significantly compromising your quality of life or if you are simply unable to pay your debts, you’ll likely be able to find permanent debt relief by filing for bankruptcy. Chapter 7 bankruptcy is the most commonly filed type of bankruptcy, and it works to liquidate your non-exempt assets in exchange for the discharge of your debts, meaning that your legal contractual obligations to pay your debts are nullified. With the help of Behm Law Group Ltd. attorneys, you can work through a Chapter 7 case and receive permanent, effective debt relief in Luverne, MN.

 

For those already struggling to make debt payments, utility bills can fall lower and lower on the priority list of bill paying. When utility debts start to stack up, you run the risk of service shut-off and/or potential creditor harassment. Filing for bankruptcy will most likely solve such problems. The following FAQs cover some points about how utility debts are handled in bankruptcy.

 

Can filing for bankruptcy stop my utilities from being shut off?

Typically, yes. When you file for bankruptcy relief, the automatic stay injunctive mandates of 11 U.S.C. § 362 go into effect against your creditors. This means your utility creditors will not be able to collect on the utility debts you owe, and they will not be allowed to deny you services, as long as you continue making your current utility payments that come due after the date you filed for bankruptcy relief.  All utility debt that you owe the utility provider as of the date that your case is filed will be discharged.  However, under 11 U.S.C. § 366, a utility provider may require a reasonable deposit from you within 20 days after your bankruptcy is filed in order to continue providing utility services.

 

Since I filed for bankruptcy, why did my utilities still get shut off?

While there are some rare cases when the automatic stay would not apply, you should immediately see the positive effects of the automatic stay on all creditor collection activities. If you’ve filed your petition and your utilities do get shut off, you should immediately contact your attorney.   Typically, your attorney will provide proof of your bankruptcy filing to the utility provider and the utility provider will reinstate your utility services.  Under 11 U.S.C. § 366, however, you will have to work with your attorney to provide a reasonable deposit to the utility provider within 20 days in order to have the utility services continued.

 

How are utility bill debts treated in bankruptcy?

Utility bill debts are unsecured debts and the amounts you owe the utility providers on the date that your bankruptcy case is filed will be discharged.  In Chapter 7 bankruptcy, unsecured creditors sometimes receive payments from the Chapter 7 trustee if the trustee is able to transact/sell non-exempt assets (assets you are not able to protect in Chapter 7 bankruptcy with your bankruptcy exemptions).  However, in most Chapter 7 bankruptcy cases, the bankruptcy exemptions are more than adequate to protect all of a person’s assets and unsecured creditors, including utility providers, get paid nothing. Along with credit card debt and medical bills, utility debts are fully dissolved in Chapter 7 bankruptcy. If the majority of your debts are unsecured, Chapter 7 bankruptcy is the quickest, most effective debt relief tool.

 

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

After the housing crisis in 2009, bankruptcy rates increased dramatically but they eventually stabilized around 2015. Since then, an average of 760,013 cases were filed throughout the following four years. Now that we’re ending a pandemic year, those numbers might fluctuate again, with shutdowns, layoffs, illness, and the lack of federally funded unemployment benefits all adding to the financial difficulties of many Americans.

 

If you’re struggling to meet debt payments during this unsure time, you’re not alone. Despite a global pandemic, many individuals and businesses are still finding permanent debt relief and long-term financial stability by filing for bankruptcy. At Behm Law Group, Ltd., we can provide legal services and support from start to finish if you choose to file for bankruptcy relief in Fairmont, MN and the surrounding area.

 

Bankruptcy statistics in the coming years will likely bear out some unusual numbers compared to the last five years, largely due to the effects of the coronavirus and the economic changes that come with every election. The first half of 2020 actually saw a decrease in bankruptcy cases by about 92,200 compared to the first half of 2019. This decrease was likely due to federal stimulus checks and federally backed unemployment benefits giving everyone a little financial boost. In addition to stimulus help, many loan providers and landlords were more lenient with late fees and monthly payments.

 

For the past ten years, filing statistics have been relatively the same when it comes to age, education, income, and the marital status of filers, along with stats regarding repeat filers. Generally speaking, the median age of bankruptcy filers is between 38 and 45 years old.  However, people 55 and older make up about 20% of U.S. bankruptcy cases. Filers under 25 years old make up only 2% of cases.

 

About 20% of bankruptcy filers have a four-year bachelor’s degree or higher education level. 36% have a high school education, and 29% have some at least college education. In the coming years, the burden of increasing student loan debt may cause an increase in the bankruptcy filing rate for people with undergraduate and graduate degrees. About 60% of filers have incomes under $30,000 a year, while cases for those with incomes of $60,000 or more have recently increased by a few percentage points.

 

Most filers, about 64%, are married individuals, with the remaining 17% single, 15% divorced, and 3% widowed. Contrary to some popular beliefs about those living with debt, repeat filers only make up 8% of all bankruptcy cases. This is largely due to the BAPCPA changes to the bankruptcy code which passed in 2005.

 

As we finish the first year in a new decade with an election and a pandemic, we’ll have to wait and see how these conditions affect our economy and individuals’ finances. If you’re considering filing for bankruptcy relief in Fairmont, MN or the surrounding region, contact Behm Law Group, Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information today.

 

 

For many U.S. citizens, maintaining financial well-being is a difficult prospect, and any additional debt burdens can send a household into a serious financial situation. If you are finding it impossible to meet debt payments each month, you may want to take advantage of legal sources of debt relief, such as filing for bankruptcy. Bankruptcy is a government-sanctioned debt relief process that provides thousands of individuals with long-term financial stability each year. If you are planning on filing a petition, Behm Law Group Ltd. can help you navigate each step and be aware of the potential risks of bankruptcy in New Ulm, MN, that might arise in your case.

 

While possible risks of bankruptcy are frequently overblown with hyperbole, the truth is that if your situation is the right one for the bankruptcy process, there are very little risks to filing. The two most common types of bankruptcy available to individuals are Chapter 7 and Chapter 13. Both bankruptcy types have pre-filing requirements and other conditions that limit possible abuse of the system and often prevent those whose financial situation isn’t right for bankruptcy from filing. Additionally, with the help of a Behm attorney, you can avoid or predict potential risks during your case.

 

One obstacle filers might face is an objection to the discharge of a debt. This occurs most often during a Chapter 7 case in which a filer typically receives debt discharge in exchange for the liquidation of non-exempt assets. Creditors or trustees can raise an objection to the discharge of a particular debt for a variety of reasons, most commonly due to some form of fraud. If the filer has attempted to abuse the bankruptcy system or has committed a fraud, such as purposefully listing incorrect information on the paperwork, an objection to a discharge may be warranted. If the objection to discharge is based on an unintentional act that led to a mistake in paperwork or a missing document, a discharge will likely still be awarded if that mistake is corrected.

 

In some cases, however, fraud is not the reason for an objection to discharge. Two main conditions that may lead to an objection of discharge even if the case is filed correctly and no fraud is present are:

 

• A debt that was incurred close in time to the bankruptcy filing – usually within the 90 days preceding the bankruptcy filing date – for gambling, an expensive trip, the purchase of a luxury item such as a vehicle or jewelry, or the purchase of some expensive item for some other person.
• Student loans, tax debts, alimony or child support obligations that paid off with credit cards.

 

Objections to debt discharge are a nuanced part of the process. With the guidance of Behm Law Group, you can be sure your case in New Ulm, MN, will be filed accurately and in the most beneficial way to your situation. To learn more about filing and what to expect, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

During this time of a global health crisis, everyone is dealing with shutdowns of nonessential businesses, government organizations, and nonprofit services. Unfortunately, the COVID-19 pandemic has also effectively forced the shutdown of most court operations in Minnesota. So, for example, if you are working through a civil case, contesting tickets and other civil infractions, or filing for bankruptcy, you will most likely have to adapt to some new court stipulations until the spread of the virus and infection rates decrease enough to merit the reopening of courts for normal operations. For those working through dire financial times that require filing for bankruptcy relief, the shutdown of businesses and loss of primary income can put them in an even more difficult financial footing. If you are struggling with a COVID-19-related case issue or are looking to file for bankruptcy, you can benefit from the guidance and advice of a Behm Law Group Ltd. expert bankruptcy attorney in New Ulm, MN.

Although the majority of shutdown statuses for nonessential operations are a day-to-day condition that may be extended or shortened with little notice, some rules currently outline the bankruptcy court and other legal processes.

Court Timeline from March to April

1. On March 13, the President declared a national emergency.
2. On March 27, the President signed the CARES (Coronavirus Aid, Relief, and Economic Security) Act into law.
3. On March 29, the U.S. Court District of Minnesota declared the CARES Act will affect court actions generally in the coming future.
4. From March 30 to April 10, general orders No. 5 through No. 8 adjusted and outlined various ways COVID-19 will affect and change the court operations, including delays, cancellations, rescheduling, remote hearings, and closings.
5. On April 15, the court released general order No. 9, which delayed the majority of civil hearings, including bankruptcy court hearings, until after May 17.

While the court is officially “closed” for in-person bankruptcy hearings until after May 17, you do not need to wait until then to file for bankruptcy relief and any presently pending bankruptcy cases can be continued. In fact, you can file a petition with relative ease electronically through the court website. Additionally, you can work with a bankruptcy attorney via phone and remote communications to build a case that may be stronger and easier to file than an electronic non-bankruptcy case.

The issues you will most likely run into if you cannot wait to file for bankruptcy relief until the national emergency is lifted are any requirements that involve in-person contact with an attorney and the bankruptcy trustee. These requirements may include completing the credit counseling course, attending the meeting of the creditors, and any meetings with your attorney or trustee. To handle these potential issues, the majority of attorneys, creditors, trustees, and court representatives are offering remote meeting services through online conferencing programs.

If you are struggling with the financial hardships of the current pandemic, filing for bankruptcy is still an option even though the physical court is closed. To learn more about filing and working with a bankruptcy attorney in New Ulm, MN, during this time, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.