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When Should I File for Bankruptcy?

While each individual’s financial situation is unique, there are valid reasons that cause one to consider filing bankruptcy. In many of these cases, this is the wisest course of action to take. This is not to say that bankruptcy is a decision that should be made lightly. A person considering bankruptcy needs to understand there are consequences to utilizing this legal strategy. However, there are also benefits to filing if you find yourself in one of the following situations.

When should you file?

  1. When you find it’s a struggle or impossible month after month to pay your bills on time. Missed payments can snowball, resulting in late fees, higher interest rates, and service/account suspension or cancellation.
  2. When you find yourself behind on mortgage payments, are considering a short sale, or are facing foreclosure.
  3. When you are spending more than you are making. If you find yourself having to use credit cards or taking out loans to pay off credit cards and other expenses, you may wish to consider filing for bankruptcy.
  4. When you are receiving calls from credit collection agencies. Prior to your information being sent to a collection agency, the creditor will often contact you directly and, given today’s economy, the creditor may wish to offer you alternative payment options. However, once the collection agencies begin calling, this may be an indication that bankruptcy is the wisest option for you.

These are just a few of the reasons why people make the decision to file for bankruptcy. If any of these apply to you, and you have questions about whether filing bankruptcy is right for you, Behm Law Group in Southern MN would be pleased to answer any of your questions at no charge.

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Know Your Rights: Stop Creditor Calls

Declaring bankruptcy can be a humiliating and distressing experience for people.  People who have made the decision to file for bankruptcy do not need to suffer the added stress of creditor calls.

Creditors can be relentless in calling individuals who have fallen behind on payments.  You may receive multiple calls at your home and work or elsewhere on your cell throughout the day. Can you stop these unwanted calls? Yes. The minute you retain a bankruptcy lawyer, you may refer the creditors calling you to your lawyer. In fact, it is advisable to do so right away. Not only will this will discourage creditors from contacting you, but it will reduce the considerable stress you are experiencing. Once you actually file bankruptcy you are protected by bankruptcy laws that make it illegal for creditors to continue to contact you.

Credit representatives are hired by companies to collect what is owed and they are trained to provide intimidating or potentially misleading information that may make you reconsider your choice of bankruptcy. For example, they may state that a bankruptcy could prevent you from obtaining employment in the future, or insinuate that the impact of a bankruptcy will have a negative influence on your credit score “forever.”

Credit representatives may also attempt to discourage you from declaring bankruptcy by offering you substantially lower interest rates and/or payoff amounts. While this may decrease your overall debt in the short term, it may not have a significant impact on your ability to pay off all your debts and avoid bankruptcy. In fact, sometimes these “solutions” only forestall the inevitable need to file for bankruptcy. Some individuals have agreed to such arrangements only to later find themselves in the position of declaring bankruptcy minus the money they paid out.

If you’re in a financial crisis, have weighed your options carefully, and have determined bankruptcy is the best route to salvage your financial well-being, don’t let these callers intimidate or deceive you. Bankruptcy is a tough choice but it is most often times a necessary choice that is made to preserve and protect your own best interests. It’s not necessary to allow creditor calls add to your stress.

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Pre-Bankruptcy Credit Counseling

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made major changes to previous bankruptcy law. Among these changes, BAPCPA added the requirement that debtors receive pre-bankruptcy credit counseling from an approved credit counselor within 180 days of filing for bankruptcy. After attending the mandatory counseling, the counseling organization issues a certificate as proof that you completed the requirement.

What to expect

A pre-bankruptcy counseling session usually takes 60 to 90 minutes. The session can be held on-line, over the phone, or in person. During the pre-bankruptcy counseling session, you will receive an evaluation of your finances, learn alternatives to bankruptcy, and learn how to create a personal budget.

How much it costs

The price varies depending on the organization, where you live, and what services you receive. However, the price is usually around $50. Before the counseling starts, the organization must disclose any fees it will charge. Furthermore, the organization must provide free counseling for people who do not have the means to pay. If you cannot afford the fee, you can ask the organization for a waiver before the start of the session. After you complete the counseling, the organization is not allowed to charge an extra fee in order for you to receive the certificate.

Where to go for counseling

Your Minnesota bankruptcy attorney can provide you with a list of credit counselors. You can also get a list of approved counselors from the Department of Justice list of Approved Bankruptcy Counseling Agencies.

Calling an attorney

Pre-bankruptcy credit counseling is only one of many requirements you have to meet to successfully file for bankruptcy. This is why you need an experienced Minnesota bankruptcy lawyer to help guide you through the requirements and processes involved in declaring bankruptcy. At Behm Law Group, LTD, we will assist you through the bankruptcy process to ensure that nothing stands in the way between you and the financial relief and protection you deserve. Give Behm Law Group LTD a call, and we will help you learn if bankruptcy is the appropriate option for your current financial situation.

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Post-Filing Financial Education

In 2005, congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which made major changes to existing bankruptcy law. One of these changes included the addition of a requirement that debtors receive post-bankruptcy financial education from an approved credit counselor or counseling organization. After meeting this education requirement the attendee is issued a certificate. The attendee then submits the certificate provided by the credit counselor or organization as proof they completed the course. This certificate is different from and should not be confused with the certificate provided after attending pre-bankruptcy credit counseling.

What you will learn

Post-filing education includes topics such as managing money, using credit wisely, and building a budget. You can take the course on-line, over the phone, or in person. Don’t take this requirement to mean that the bankruptcy was somehow your fault. This practical money-management information can benefit anyone, no matter what their financial situation, and serves to help and strengthen your financial future.

Cost of the course

It usually costs $50 to $100 for the course. The price depends on the counseling organization you use and where you live. The organization has to disclose the fees before you start the course. If you cannot afford the fee, you can ask the organization for a waiver.

Where to go for counseling

The Department of Justice has a list of Approved Bankruptcy Counseling Agencies. Also, a Minnesota bankruptcy lawyer can provide you with a list of credit counselors.

Help from your attorney

There are many requirements for declaring bankruptcy. Getting pre-bankruptcy credit counseling and post-bankruptcy financial education are only two of the requirements. You need an experienced Minnesota bankruptcy attorney to assist you through the process of meeting every requirement and ensure that your bankruptcy filing is successful.  At Behm Law Group LTD, we have many years of experience helping thousands of people like you. If you’re in a desperate financial situation, give us a call. We will guide you through the bankruptcy process and help you get the relief and protection you need.

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When You Need to File for Bankruptcy

At Behm Law Group, LTD, we see people from all different walks of life, and generally they have one thing in common—they’re desperate. Declaring bankruptcy is the last thing most people want to do; however, many feel that they have no choice. Perhaps you’re feeling financially stressed, maybe even desperate. Do you need to file for bankruptcy? Here are some symptoms that many people in financial distress experience and which may indicate that bankruptcy may be an appropriate option.

You’re making minimum payments on your credit cards

When you have no choice but to make minimum payments on your cards, you’re in financial trouble. The big credit card companies have structured their payments so that if you repeatedly make the minimum payment, you will never pay-off your debt. If you’re making minimum payments month after month, you’re digging a deep financial hole that only gets deeper and increasingly more impossible to escape from.

You have to borrow money to pay for basics

When your monthly financial obligations consume so much of your income that you have to borrow money to eat, you are in financial trouble. Do you need to put your utility or grocery bill on your charge card just to make ends meet? Have you maxed-out most of your credit cards and struggle to find money to buy even simple basic necessities? If this is your case, you probably never will be able to pay off your debts.

You have cut everything you can and still can’t make ends meet

You’ve tried to be as proactive as possible by cutting expenses and canceling services that other people take for granted. You dropped your cell phone service, you’ve cancelled your cable or satellite TV, you don’t have internet, and you shop for groceries only when money allows you to. Unfortunately, even though you’ve cut everything possible, your financial obligations and credit card payments are such that you still can’t get ahead. And to make matters worse, with each month that goes by, even though you’re making payments, the amount you owe is growing with each passing day.

Are you Desperate?

Declaring bankruptcy is not a financial solution to be taken lightly. However, for some people, it is the only solution. At Behm Law Group we understand the anxiety and frustration folks caught in this situation are feeling. If you are desperate and feel totally overwhelmed by mounting debt and endless calls and letters from debt collectors, call the Behm Law Group LTD and let us help you find an equitable resolution to your financial situation.

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Can I File Bankruptcy Without a Lawyer?

Simply answered, yes you can. If an individual meets the eligibility requirements of filing bankruptcy in the state they reside in, one can file bankruptcy themselves. That being said, bankruptcy laws are complex and change frequently, and the process can be challenging to navigate without guidance from an experienced bankruptcy lawyer.

If you attempt to pursue bankruptcy on your own, in addition to interpreting and understanding bankruptcy laws, individuals must gather specific required documents within defined timeframes before even filing for bankruptcy. Some of these documents are fairly easy to obtain. Others may require more in-depth research, such as requesting information from the IRS. If these requirements are not specifically followed, or if any of the documents are missing, the individual will not be allowed to file for bankruptcy.

The requirements become further complex when a spouse, family member or friend is impacted by the filing. In these cases, additional documentation is required and those friends and family members may find themselves involved in the filing.

Declaring bankruptcy can be an emotionally devastating process. Many individuals feel humiliated, defeated and overwhelmed. In such a state, the added stress of interpreting bankruptcy laws and complying with the complicated filing process can sometimes be more than a person can handle. Small mistakes during the filing process may create huge and costly complications in the future. How can you best protect yourself and your financial well-being?

At Behm Law Group, we limit our practice exclusively to bankruptcy. As experts in this field, we stay abreast of the latest developments in bankruptcy law and guide our clients through the requirements and process every step of the way. Behm Law Group understands that this is an extremely sensitive decision, one which was not made lightly, and we extend our expertise with compassion to all of our clients. To obtain more information on the bankruptcy requirements and process, please contact Behm Law Group for a free consultation.  We will answer any questions you may have and provide you with peace of mind.

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Expedite the Bankruptcy Process: Gather the Required Documents in Advance

The process of filing for bankruptcy can and should be a very smooth and relatively quick one. What generally slows and complicates the process is if the individual does not have the required paperwork in order. Prior to filing bankruptcy, there are a number of supporting documents that must be submitted. Until these documents are properly collected and reviewed, your bankruptcy lawyer cannot obtain a court date for you. Most individuals will find that the process becomes very long and tedious if they do not proactively obtain these documents. Although this is not an exhaustive list, the following is a general list of documents which you should start gathering in advance to smooth the way and speed up the process.

  1. The individual(s) must obtain a certificate of Approved Credit Counseling. The cost of doing so is nominal, and may be completed online through a number of agencies.
  2. Paystubs for the past 60 days and evidence of household income for the past 6 months.
  3. Last 4 years of original income tax returns, and evidence of how you used your last tax refund (particularly if you are filing shortly after you received it).
  4. Notification of any anticipated increases in income or expenses after filing.
  5. Financial statements for the past 6 months. This includes retirement accounts, stocks/bonds and bank accounts (checking, savings, loans for secured debt, such as automobiles and mortgages).
  6. A detailed list of personal property. This should be an exhaustive list of all personal property, including items such as electronics (TV, laptop, iPod), furniture, bedding and linens, kitchen appliances, lawn care equipment, workshop equipment, jewelry, antiques, collections – just to name a few.
  7. All unsecured debt, such as credit cards, rent, utility bills and medical bills.
  8. Court orders if you pay child support or alimony, and proof you are current with these payments.
  9. Copies of all deeds and mortgages.
  10. Titles for any automobiles, boats, trailers, or jet skis that you own, and proof of full coverage insurance if you have a loan (secured debt) on your car.
  11. A detailed list of any items you have pawned.

This list may seem overwhelming at first glance. However, an experienced and knowledgeable bankruptcy lawyer can guide you through the process, help you obtain these documents and, in some cases, even obtain them for you. To ensure your bankruptcy filing process is as smooth as possible, contact Behm Law Group.

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Bankruptcy Myths Debunked – Part 4

This is the fourth part in a series of bankruptcy myths debunked. We have already debunked the myths that everyone will know you declared bankruptcy, your credit will be ruined forever, and that you’ll lose everything you own. The final myth we will debunk is that declaring bankruptcy is an honest and accurate reflection of your moral character. Declaring bankruptcy is not a moral failing. In no way should filing bankruptcy be construed to identify you as an unscrupulous deadbeat trying to skip-out on your bills by using the law to “legally steal” from others. Declaring bankruptcy simply means you have encountered financial hardships beyond your control that have put you in a situation in which you need the help and protection as provided by law.

You did not get in this situation on purpose

A deadbeat is someone who borrows or accepts money with no intention of repaying their financial obligations. A deadbeat shamelessly takes advantage of the system and of the people around him or her and a deadbeat has no ill feelings for the damage he or she causes by doing this.

You didn’t do this. You had every intention of paying your bills and faithfully meeting your financial obligations, but something happened that was out of your control. Maybe you or a loved one got sick. Maybe you lost a job. There are a whole host of events that could have put you in need of declaring bankruptcy, none of which have anything to do with your integrity or moral character.

Bankruptcy is for people like you

One of the reasons the option of bankruptcy exists is to help people in your situation. Our society recognizes that people get into financial trouble for many reasons, most of which are not their fault. It provides them with a means to seek protection and start over to re-establish their finances.

Getting help

A Minnesota bankruptcy attorney can show you how bankruptcy can provide you the financial relief and protection you need. At Behm Law Group, LTD, we specialize in helping people in your situation. Our bankruptcy attorneys will treat you with dignity and respect.

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Bankruptcy Myths Debunked – Part 3

This is the third part in a series of bankruptcy myths debunked. The first myth we debunked was that everyone will know when you declare bankruptcy. The second myth is that declaring bankruptcy will ruin your credit forever. The third myth we address is that when you declare bankruptcy you will lose everything you own. Perhaps you’ve seen something on TV or in the movies that perpetuates this myth, such as someone sitting on the floor of a nearly empty house while workers haul away everything they own. Fortunately, this is far from the truth.

Exempt property

Chapter 7 bankruptcy is sometimes called “liquidation bankruptcy.” This sounds scary because the term “liquidation bankruptcy” seems to convey that a creditor can sell or liquidate some of your possessions. However, bankruptcy law provides various bankruptcy exemptions, covering most types of property, which allow you to retain that property from seizure or liquidation. In the vast majority of bankruptcy cases, people do not lose anything other than their debts. Examples of exempt property include necessary clothing, motor vehicles, household furniture, jewelry to a certain value, tools of your trade, your pension, welfare income, social security, and unemployment compensation. Other exempt property includes appliances, equity in your home, and monetary damages you received for personal injury.

Protecting your rights and property

Protecting your property is an important reason you need an experienced bankruptcy lawyer. You need an advocate to protect your interests and your property. The Minnesota bankruptcy attorneys at Behm Law Group, LTD are on your side. Not only will we help you get the relief you need, we will help you protect and retain all the property and possessions you are entitled by law to keep.

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Bankruptcy Myths Debunked – Part 2

This is the second part in a series of bankruptcy myths debunked. The first myth we debunked was that everyone will know when you declare bankruptcy. The second myth to be debunked is that declaring bankruptcy will ruin your credit forever. While a bankruptcy filing can be reflected on your credit history for anywhere from five to ten years, it affords you the ability to restart your financial life and rebuild your credit history. Even though a bankruptcy filing will be reflected on your credit history, you will likely be a more attractive credit risk to future creditors because those creditors will know that they will not have to compete with your pre-existing/pre-bankruptcy filing creditors to get paid. You need to know the facts in order to make an informed decision about filing bankruptcy.

Bankruptcy is a chance to rebuild your credit

Chances are, if you are considering bankruptcy, you’re credit is already in terrible shape and you see no chance to improve your situation. The deeper your debt becomes the harder it is to find a way to dig your way out of it. This begs the question: How can declaring bankruptcy ruin your credit when your credit is already in a state of ruin? With bankruptcy relief, you have the opportunity to rebuild your finances and get the second chance you need.

You can build credit after bankruptcy

Declaring bankruptcy does not mean your ability to recover a good standing regarding credit is lost or forfeited forever. There are still ways to responsibly rebuild your credit after bankruptcy. With the financial relief bankruptcy provides, you can restructure your finances, start saving your money and building your net worth. After you have saved some money you can get a secured credit card and start demonstrating your credit worthiness. With time and diligence you can rebuild your credit.

Bankruptcy is not forever

While it is true that a bankruptcy can be reflected on your credit history for five to ten years, you will probably be more attractive credit-wise to new creditors because you will be free of the vast majority of your old creditors. A bankruptcy filing will not prevent you from demonstrating that you can again be trusted with credit. At Behm Law Group LTD, our Minnesota bankruptcy attorneys know that a second chance can help people rebuild their finances and get their lives back. If you want your life back, give the bankruptcy lawyers at Behm Law Group LTD a call.