Understanding More about Debt Cramdown with Chapter 13 Bankruptcy in Fairmont, MN

A common misconception about bankruptcy is that filers will lose all their property in the process. This could not be further from the truth. While there are some  Chapter 7 bankruptcy cases in which assets are liquidated, there are many more occasions when filers can claim exemptions to protect their property from liquidation. Additionally, the process of Chapter 13 bankruptcy works to restructure filers’ debts into a repayment plan suited to their income without bringing liquidation into question. If you are considering filing for Chapter 13 bankruptcy in Fairmont, MN, Behm Law Group, Ltd. offers counsel and protection from start to finish to help you get the most out of your case.

 

One aspect our bankruptcy attorneys work to promote in certain cases is helping filers successfully petition for debt cramdown. When you owe more debt on a property than the value of that property, you are considered to be “upside down” on that debt. If this is the case, you are eligible for debt cramdown in certain circumstances.

 

How It Works

 

Cramdown is a process available for several types of secured debts, but because of the fast depreciation of vehicles, cramdowns are applied mostly to auto loans. If your debt is upside down, you can use a cramdown to reduce the debt amount. For example: You took out an auto loan of $15,000 to finance a car of the same value, and you repaid $3,000 of that loan over the course of three years. After those three years passed, your car’s value decreased to $10,000. However, you still owe $12,000 on your auto loan.

 

When you file for Chapter 13 bankruptcy and request a cramdown, the repayment plan will include only the current value of your car as secured debt. In this example, you would have the $10,000 value of your car loan rolled into your plan as secured debt, while the remaining $2,000 you would pay outside of bankruptcy is rolled into your plan as unsecured debt. This cramdown process may not eliminate all of your debt, but because Chapter 13 plans don’t often require you to repay unsecured debt in full, you can significantly decrease the debt you pay in the end.

 

Additionally, most cramdowns allow you to reduce your interest rates on the remainder of the secured debt included in your plan. Auto loans that qualify for cramdown must also have been taken out more than 910 days before you file for bankruptcy.

 Find Professional Help when Filing for Chapter 13 Bankruptcy

If you’re considering filing for Chapter 13 bankruptcy in Fairmont, MN, and think you may be eligible for a cramdown, Behm Law Group Ltd. can offer you advice and assistance in the process. Contact us at (507) 387-7200 to learn more or to get started on your petition today.

How to Use Your Tax Refund While Filing for Bankruptcy in Redwood Falls, MN

As tax season approaches, everyone filing has to take time to look at their finances in more detail than usual. For many individuals and businesses, a financial overview may show just how much they are struggling with the weight of debt. For those with too much debt than they know what to do with, tax season may be the perfect time to consider a long-term solution. At Behm Law Group, Ltd., we’ve found that there are many cases where tax season was the most effective time for those considering filing for bankruptcy in Redwood Falls, MN to take the next step forward.

 

Whether you have credit card debt, mortgages, or most other forms of debt, filing for bankruptcy can act as a recovery system that helps you resolve those debts under government protection. For most with a steady income that overbalances their debt-to-income ratio, the process of Chapter 13 bankruptcy is the most effective as it restructures your debts into a three- to five-year repayment plan suited to your own financial situation.

 

Because of the demand that a Chapter 13 plan puts on all your disposable income, you will most likely have to forfeit some of your yearly tax refunds you receive to your trustee for the repayment of your unsecured debts. While your trustee may allot some of that refund for you to spend or save, you will not be able to retain all of it.  To get the most use out of your tax refund if you plan to file for bankruptcy, you should plan to use it before you file your petition.

 

If you use your tax refund prior to filing for bankruptcy, you will have to spend it all or you may have to surrender some of your tax refund to the trustee. To get full use of your refund without being at fault when the time comes to file, you should expect to only use the refund for:

 

  • food and prescription medicine
  • mortgage or rent
  • home maintenance and repairs
  • utilities
  • education costs
  • clothing
  • insurance
  • medical or dental costs
  • car payments, repairs, and maintenance
  • homeowners association fees

 

The best use of your tax refund if you plan on filing for bankruptcy is for it to go to these expenses. When you use your refund for these purposes, it’s also critical to keep accurate and legitimate records of all your spending. With the help of a Behm attorney, you can record and collect necessary information and documents that will fully demonstrate your use of your tax refund for these expenses rather than other debt payments. Your trustee will most likely require a tax return for the year prior to and the year you file for bankruptcy on top of the additional bankruptcy petition documents.

 Find Professional Help When Filing for Bankruptcy

To learn more about how to use your tax refund before filing for bankruptcy in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Farms and Other Local Midwest Food Suppliers File for Chapter 12 Bankruptcy in Mankato, MN

Farming is a notoriously difficult profession even with the knowledge, tools, and power agriculturalists have access to today. Throughout the ages, farmers have faced challenges with the weather, soil conditions, seed fertility, plant diseases, pests, economy crashes, and many other variables. With all the hardships farmers face, it’s incredible there are so many strong people who still choose this vocation, and we have those hard workers to thank for the abundance of food in supermarkets and grocery stores across the country.

 

However, many farmers still face extreme financial hardship, and it’s no surprise that many find themselves deep in significant debt connected to their crop, livestock, or fishing operations. If you’re having difficulties as a family farmer or fisher, Behm Law Group, Ltd. can help you find your way out of severe debt by filing for Chapter 12 bankruptcy in Mankato, MN.

 

With the large spread of farmland dotting the countryside between Mankato and other cities in southern Minnesota, there are many local people living in our communities that took on farming as a profession. Unfortunately, this year has marked a rise of farm debts, not just in Minnesota, but across the Midwest as a whole.

 

Why Farm Debts Are on the Rise

 

Sometimes described as a “slow bleed” of independent farms in the face of low dairy, crop, fish, and meat prices, the debts of family farmers and fishers are not matched by the income they receive from product sales. When independent farms are higher in geographic concentration, as they often are, the trickle of each small farmer’s debts turns into a river of severe financial crisis. If this happens to a community, no matter how widespread, bankruptcy is a highly valuable solution. When farmers and fishers take advantage of the assistance filing for Chapter 12 bankruptcy provides, it serves as a true system of recovery and healing for agricultural communities.

 

Chapter 12 Bankruptcy

 

Chapter 12 bankruptcy is a debt relief option offered to family farmers and fishers who earn over 50% of their income from agricultural or fishing operations. If you file for Chapter 12, you are provided with a system of bankruptcy that reorganizes and restructures your debts in a manageable repayment plan suited to your income. This bankruptcy repayment plan is spread over a period of three to five years and allows for fluctuations in your income with the growing and harvest seasons. Not only does Chapter 12 give farmers and fishers a way to repay their debts without losing their land, home, agricultural equipment, and overall livelihood, it also provides protection against creditor harassment.

 

Farm debt may be on the rise due to several conditions in the food industry today, but there are solutions. Chapter 12 bankruptcy in Mankato, MN is one option that many can use to recover in the long-term from agricultural debt. To learn more about bankruptcy and debt relief, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Why Post-Holiday Debt Can Be a Real Reason to File for Chapter 13 Bankruptcy in New Ulm, MN

The holidays are a wonderful time of year for many households. It can be a time when love and kindness pair with quality family time and a break from the regular work schedule. However, because it’s also the time of year when we spend the most money, it can be one of the most difficult times for some who have little to spare.

 

Food, gifts, decorations, and travel expenses make up the bulk of most consumer’s spending from October to January. The time from Halloween to the New Year fills a quarter of the year when spending can be out of control. At Behm Law Group, Ltd., we understand the financial pressure you may experience during the holidays, and we know from experience with other clients that post-holiday debt is a perfectly valid reason to file for Chapter 13 bankruptcy in New Ulm, MN.

 

Chapter 13 bankruptcy works to restructure your debts under the administration of a bankruptcy trustee. This restructuring turns your unmanageable debts into a repayment plan that fits your income and benefits you and creditors alike.

 

The primary way most individuals pay for holiday expenses is with a credit card. As many know, credit cards have some of the highest interest rates compared to any other debts you can incur. With the amount most people spend around the holidays, it’s inevitable that large credit card debt amounts are vastly increased from October to January across the country. Annual post-holiday debt surveys show that the average consumer spends upwards of $1,000 during the holidays, and many predict that amount will increase each year.

 

While it’s easy to get carried away with holiday spending, it’s much harder to come back from credit card debt in the long-term. Struggling with the weight of excessive interest rates can be remedied with a Chapter 13 repayment plan.

 

Chapter 13 bankruptcy is a highly effective process for those with a steady income, a family to support, and a desire to protect all their properties from the liquidation that occurs in a Chapter 7 case. When you file a Chapter 13 bankruptcy petition, your creditors have an automatic stay placed on their ability to collect debt, and you can begin building an appropriate repayment plan that will last three to five years.

 

The debts involved in your repayment plan are treated based on the loan agreements you made with your creditors (secured, unsecured, or priority). Because credit card debt is unsecured debt, it is most likely to be discharged up to 100% in a repayment plan.

Find Professional Help when Filing for Chapter 13 Bankruptcy

Holiday spending is hard to avoid, but a reasonable amount of spending that fits into your budget can be a great way to add cheer to your holiday season. However, if you find yourself struggling with post-holiday debt on top of other debts, filing for Chapter 13 bankruptcy in New Ulm, MN might be the right choice for you. To learn more about bankruptcy, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Debt and Stress: How Filing for Bankruptcy Can Make You Healthier with Prescribed Debt Relief in Jackson, MN

Whenever we kick off a new year, most of us take a look at our lives with the intention of finding a way to improve ourselves, relationships, living conditions, careers, and many other areas of our lives. One area many of us can look to improve is our financial well-being. Because the majority of us hold some type of debt such as a mortgage, credit card debt, car loan, medical bill, or otherwise, rethinking our financial situation can be an effective approach to improving our lives with a new year resolution. If you’re struggling with your finances, Behm Law Group, Ltd. can help you get long-term debt relief in Jackson, MN by filing for individual consumer or business bankruptcy.

 

Filing for bankruptcy is a highly effective way to recover from financial difficulties, but getting debt relief is valuable in more ways than one. Because financial struggles and debt are one of the leading causes of underlying stress for people across the country, filing for bankruptcy can seriously relieve both debt and stress in your day-to-day life.

 

Debt and Stress

 

When you have debts that become more and more unmanageable over time, you’re dealing with a legal responsibility that creates a similar type of stress as other negative life conditions including the death of a loved one, chronic illness, social stigma and bias, or mental illness. Dealing with the stress of debt can significantly increase your exposure to difficult emotional problems resembling those created by other traumatic life experiences, including:

 

  • Depression
  • Anxiety
  • Denial
  • Anger
  • Frustration
  • Shame
  • Regret
  • Grief
  • Fear
  • Resentment
  • Decline in physical health

 

These emotional states and a stress-related decline in physical health can also put a strain on your relationships with family, friends, and coworkers. These stress factors can also compromise your career and make each day more difficult in general.

 

Filing for bankruptcy is an option any individual consumer or business can use to recover from severe debt. As a government-structured process that treats your debts in a way designed to be fair to all parties involved, bankruptcy is a realistic option for many struggling with accumulated or unexpected debt.

Find Professional Help when Filing for Bankruptcy

If you’re feeling the stress of unmanageable debt, contact Behm Law Group, Ltd. today to learn more about filing for bankruptcy and getting debt relief in Jackson, MN.

Why Filing for Bankruptcy is an Effective Long-Term Solution for Credit Repair in Marshall, MN

Every day, American adults are faced with the cost of living no matter where they’re located or what job they have. A large portion of the cost of living we all face is the existence of debts as a regular factor in many parts of our lives. From mortgages to cars, we all hold some debt that requires monthly payments. Without a structured budget and plan for repaying the debt in accordance with other monthly expenses, it’s easy to accumulate more and more financial pressure. If you find yourself facing unmanageable debt and don’t know what path to take to recover, Behm Law Group, Ltd. can give you the help you need to file for bankruptcy and start the process of long-term credit repair in Marshall, MN.

 The Truth About Bankruptcy & Credit Repair

Filing for bankruptcy has a poor public image when it comes to credit repair. While this is in part a realistic concern for those considering filing, it has often been overshadowed by the long-term benefits it provides. Bankruptcy is a highly effective, government-sanctioned remedy for resolving and recovering from a wide variety of debts.

 

Whether you choose to file for debt reorganization or liquidation bankruptcy as an individual consumer or a business, you can start down the path to stabilizing your finances while learning about how debts and incomes function in your life.

 

Consider the following facts that occur when you file for bankruptcy:

 

The Bad:

  1. Bankruptcy will damage your credit score. Based on the FICO credit score calculation model, filing may lower your score from 100 to 200 points.
  2. Records of a bankruptcy filing will stay on public record for up to ten years, depending on which chapter you file for.

 

The Good:

  1. Despite affecting your credit negatively at first and being on your public record for years, the damaging effect that filing for bankruptcy has on your credit will start to diminish immediately after filing.
  2. Your credit score may be improved to its original standing or recover to an even better score within a few years of filing. Some filers even report a restored credit score five years after filing.
  3. Whether you file for Chapter 7 bankruptcy and have debts discharged in exchange for asset liquidation or choose Chapter 13 debt reorganization and a three to five-year repayment plan, you can start rebuilding your credit right away.
  4. Rebuilding your credit during and after bankruptcy takes as little effort as budgeting, making debt payments on time, taking note of what you learn in pre-bankruptcy credit counseling, and making cautious spending choices.
  5. When bankruptcy is removed from public record, it can never affect your credit or financial standing again.

 

Bankruptcy is designed to help the individual consumer or business recover from debts and re-enter the economic system as a valuable participant. It is not designed to trap debtors or leave Americans destitute, despite popular belief.

 

If you’re ready to resolve your debts for long-term credit repair in Marshall, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Qualifying as a Family Farmer or Fisher to File for Chapter 12 Debt Repayment Bankruptcy in Owatonna, MN

Agricultural industries in the U.S. have changed dramatically over the last fifty years, developing to meet the needs of a growing population and global market while battling many other obstacles. Today’s agricultural industrial complex is equipped to provide abundant food year-round to virtually every community, but because of its structure, it has also made it difficult for family farmers and other family agricultural businesses to stay afloat. For family farmers or family fishermen struggling to make ends meet, Behm Law Group, Ltd. offers legal advice and assistance to file for Chapter 12 debt repayment bankruptcy in Owatonna, MN. We can help you understand why bankruptcy is a valuable option to recover from financial problems that affect your family and business alike.

 

The U.S. Bankruptcy Code offers Chapter 12 debt repayment bankruptcy as a system tailored to fit the unique requirements and livelihoods of American family farmers and family fishermen. This bankruptcy chapter works similarly to Chapter 13, taking the filer’s debts and income into consideration and, with fairness to the creditors involved, restructuring those debts into a manageable three to five-year repayment plan.

 

However, Chapter 12 differs from Chapter 13 in several ways that make it more suitable to filers who make their living through their own farming or fishing practices. These benefits range from greater debt allowances to cramming down secured debts, but in order to gain the advantages Chapter 12 debt repayment bankruptcy provides family farmers and family fishermen, you have to qualify to file.

 

What Makes a Chapter 12 Candidate?

 

To prevent abuse when filing for debt repayment bankruptcy, the bankruptcy code outlines strict conditions for filers to qualify as family farmers and family fishermen. These requirements include:

 

  1. You or you and your spouse together own and operate a commercial farming or fishing enterprise.
  2. The income you gain from your farm or fishing operation must be over 50% of your total gross income as a household. This is measured from the previous tax year or from the previous three tax years (the latter is only applicable for family farmers).
  3. The total of your debt directly connected to your operation (property, equipment, seed and supply contracts, vehicles, tax debts, etc.) can’t be higher than $4,153,150 for a farm or $1,924,550 for a commercial fishery or fishing business.
  4. If you are a family farmer, you must have 50% of all your debts as an individual or household directly connected to your farm.
  5. If you are a family fisherman, you must have 80% of all your debts as an individual or household directly connected to your fishing enterprise.

 

If you’re unsure whether you qualify for a Chapter 12 debt repayment bankruptcy, Behm Law Group, Ltd. can help you examine your finances to determine if the debts and income connected to your farming or fishing operations meet the requirements.

 

Don’t wait to recover from severe debt and restabilize your family’s farm or fishery. Contact us today at (507) 387-7200 to learn more about your options for Chapter 12 debt repayment bankruptcy in Owatonna, MN.

Understanding Personal Guarantees and Liability When You File for Business Bankruptcy in Luverne, MN

If you own a small business anywhere in the U.S., your livelihood depends on countless factors ranging from market competitors to economic recessions. Maintaining a business with a steady flow of income and output of products or services is difficult, even with a strong foundation. No matter how old or young your business is, it’s possible to face financial struggles. If you’re having a hard time making debt payments from month-to-month, Behm Law Group, Ltd. can help you decide whether filing for business bankruptcy in Luverne, MN, is the right choice for your business.

Filing for business bankruptcy is a highly effective way to recover from severe debt. When you file for a business bankruptcy, you can choose Chapter 7 and liquidate your assets (shutting down your business in the process), or you can file for Chapter 13 bankruptcy and propose a restructuring of your debts into a manageable repayment plan (allowing your business to continue operating as you repay debts under the supervision of a bankruptcy trustee).

Whichever type of bankruptcy you file for, your trustee will rigorously examine your case for information about your past finances, business format, debts, income, living expenses, and contract agreements with your creditors. This examination determines how your assets will be liquidated and your debts discharged or restructured. Once your trustee has all the necessary information submitted with your petition and you have met all pre-bankruptcy requirements (credit counseling, bankruptcy fees, Means Test, and 341 hearing), the liquidation process will being in a chapter 7 case or you will propose a repayment plan in a chapter 13 case.

Behm attorneys can work with you to draft a repayment plan taking into account all your debts (priority, secured, and unsecured) and determine which debts you are liable to repay in full or have discharged in part from 0%-100%. One concern many business owners have in bankruptcy is whether they’ll be personally liable for the debts their business cannot repay. In the majority of cases, you will be personally responsible to pay debts your business can’t because it’s likely you made a personal guarantee agreement with your creditor when the loan was given.

Personal Guarantee: When you make a business loan agreement, the creditor needs to know they are protected in the event you cannot repay that debt. To resolve this issue, most creditors will not extend loans to businesses without requiring the owner to sign a personal guarantee agreement stating they are responsible as an individual to repay that debt in the event their business can’t meet payments.

Personally Liable: In short, you will be personally liable for your business debt when you file for Chapter 13 bankruptcy if:

  1. You have a sole proprietorship
  2. You have a partnership
  3. You made a personal guarantee on a debt

To learn more about filing for business bankruptcy in Luverne, MN, or to find out about personal guarantees and debt liability, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Why Some Debts Are Exempt from Your Case When You File for Bankruptcy in Windom, MN

For hundreds of years, bankruptcy was wrongfully associated with morally unsound citizens who could not manage their finances. The reality, however, is that people are stuck with debt because of a wide range of circumstances. Today, individuals can accrue debt from more sources than ever before—from credit cards to student loans to medical costs. You are not alone if you are struggling to meet debt payments each month, and like many other debtors in the United States, you can recover financial stability in your life by filing for bankruptcy. With the help of Behm Law Group, Ltd. in Windom, MN, you can decide which type of bankruptcy is right for you and build a strong case to resolve your debt.

Filing for bankruptcy is a viable solution for many debts but be aware that some debts are not dischargeable through the bankruptcy process. The majority of debts the common U.S. individual holds can be included in all bankruptcy formats, including Chapter 7 and Chapter 13. These bankruptcy formats include debt from credit cards, medical bills, mortgages, bad checks, old utility bills, and car loans—all debts that cause individuals to file for bankruptcy at the highest frequency.

Unusual Debts When You File for Bankruptcy

Debts that may not be discharged when you file for bankruptcy range from unusual debts, like malicious misconduct debts, to even the most common type of debt in America, student loans. Sometimes student loans can be discharged but one must actually commence a law suit against the student loan company and prove to the bankruptcy court that the student loan will impose a financial undue hardship going forward. Such law suits can be both expensive and protracted.

Exempt Debts

The following list of debts is not comprehensive, but covers the most prevalent in the United States that are typically not discharged in the bankruptcy process:

  1. Student Loans Where Undue Hardship is Not Proven
  2. Child support and alimony debts
  3. Most tax debts
  4. Some debts owed to government agencies such as the Environmental Protection Agency for environmental hazards
  5. Reckless or malicious misconduct debts (for example, a debt in a lawsuit against you for injuries caused by drunk driving)
  6. Other forms of restitution debt
  7. Wages owed to your employees

So why are these specific debts not discharged in the bankruptcy process when so many others are? When considering each type of debt individually, the answer is a complex legal issue that takes into consideration other debts, other parties involved, location, and much more. However, if we take a look at all these debts together, we can see they have one thing in common: All these debts directly affect the well-being of another person or the well-being of the government as an entity that protects and supports the individual American.

If the bankruptcy process allowed the discharge or restructuring of these debts, it could significantly harm another person who has no direct responsibility for the cause to file for bankruptcy. While there are certain exceptions that include some of these debts in your bankruptcy case, they are most often excluded to protect innocent people in your life and the government that, in turn, protects people across the country.

Find Professional Help When You File for Bankruptcy

If you are uncertain whether or not you should file for bankruptcy in Windom, MN, contact Behm Law Group, Ltd. at (507) 387-7200 to learn more about the process and your own situation today.

Understanding When and Why a Trustee Looks for Fraud and How to Avoid Mistakes in Filing for Bankruptcy in St. Peter, MN

Bankruptcy is a balanced system designed to help debtors recover from severe financial struggles and reenter the economic system as a productive consumer while remaining fair to creditors to whom debts are owed. The U.S. Bankruptcy Court oversees the outcome of bankruptcy cases for both individuals and businesses filing for bankruptcy, but the case details are handled through an appointed bankruptcy trustee. If you’re considering filing for bankruptcy in St. Peter, MN, Behm Law Group, Ltd. can help you build a strong case.

 

One of the things trustees are highly efficient in finding within a bankruptcy case is evidence or potential for fraud. While most incidents of fraudulent behavior in a bankruptcy case are intentional, there are times when mistakes or misunderstandings can lead to a technical fraud. Understanding when and why a trustee determines an action is fraud is an important step to protecting yourself when filing for bankruptcy.

 

What is Considered Fraud When Filing for Bankruptcy?

 

There are several actions and events that can be directly or indirectly considered fraud in an individual consumer or business bankruptcy case. When this fraud is intentional, it’s generally straightforward for a trustee to dismiss a case based on those actions and events. Direct, intentional bankruptcy fraud most often includes:

 

  • Lying and falsifying documents of financial records such as records of personal loans
  • Purposefully filing incorrect bankruptcy forms
  • Falsely reporting income amounts
  • Hiding assets and accounts
  • Lying under oath
  • Transferring accounts and assets to other parties to hide them from creditors and your trustee
  • Creating a fake identity to hide assets or otherwise lie
  • Bribing your trustee, creditors, or court officials to your benefit
  • Embezzling any amount from your bankruptcy estate

 

These actions and events are the common types of fraud a bankruptcy trustee will base a case dismissal on, but there are other fraudulent behaviors that may occur. Indirect fraud is often caused by ignorance of your circumstances or mistakes in your bankruptcy documents. With the expert advice and assistance of Behm attorneys, you can avoid unintentional fraud including:

 

  • Missing bankruptcy forms or financial document records from your petition
  • Forgetting to pay bankruptcy fees or not understanding which fees apply to your case
  • Filing incorrect or incomplete financial information and bankruptcy forms
  • Missing deadlines or appointments accidentally
  • Building an infeasible Chapter 13 repayment plan
  • Failing to report changes in employment or income (as long as it was not intentional)
  • Attempting to apply exemptions where they cannot be applied
  • Any other unintentional signs of fraud that are caused by a lack of understanding of the requirements of filing for bankruptcy or simply by mistake

 How Professional Counsel Helps You When Filing for Bankruptcy

When you work with Behm attorneys, you can trust us to help you build a strong case and eliminate any potential for mistakes in your documents and forms. With the protection and counseling we provide, you can rest easy on your road to debt relief through the bankruptcy process.

 

To get started with Behm Law Group, Ltd. or to learn more about filing for bankruptcy in St. Peter, MN, contact us at (507) 387-7200 today.