Understanding and Navigating What You Might Face after Filing Bankruptcy in New Ulm, MN

Life has its ups and downs, which is a cliché, yes, but clichés are often rooted in simple truths. While some individuals and businesses won’t experience as extreme a financial event as bankruptcy, it certainly affects those who do file in many ways. The emotional and mental stresses of financial struggles aside, bankruptcy has its own effects on a filer’s life before, during, and after a case is closed. If you are considering filing bankruptcy in New Ulm, MN, Behm Law Group Ltd. can help you build a strong petition, meet pre-bankruptcy requirements, follow through with your case, and complete the process successfully with as little stress as possible.

 

Behm attorneys are skilled, knowledgeable, and experienced in handling a wide range of Chapter 7, Chapter 13, and Chapter 12 cases, and we have the means to protect and help you through your entire case.  After a bankruptcy is completed, however, you may face a few challenges.

 

As with people who have not filed for bankruptcy relief and who may have bad credit, there are three instances when bankruptcy filers can be discriminated against.

 

  • Loans: Your post-bankruptcy credit scores will not be what they were pre-bankruptcy. Your scores will take a hit, but you can still build up your score over time. Despite this, you may have a hard time getting new loans after filing. Lenders can turn you down for loans or charge higher interest rates on an accepted application. If you are in a credit counseling program, you may experience difficulties getting financing as well.   Many people who file for bankruptcy relief may actually have great credit scores.  However, they are typically unable to do anything even with great credit scores because their debt to income ratio is so skewed.  Simply put, any great credit scores are entirely illusory because people simply have too much debt already and they do not have sufficient income to materially reduce that debt.  Creditors will not make further loans to you when they see that your income is insufficient to pay and materially reduce the debt that you already have.  After a bankruptcy is completed, you may have a poor credit score but, paradoxically, you may be more credit worthy than you were before.  In many ways, bankruptcy “leans you up” debt-wise because you get rid of most, if not all, of your debts.  In many ways, you are like Pinocchio because you don’t have any “debt strings” or you have a lot less of them.  Additionally, you will not qualify for bankruptcy relief again for several years.  Oftentimes, creditors, even the ones you may have included in a bankruptcy case, see this and they are incentivized to work with you again.   They understand that they would get to be first or second in line to get paid by you after a bankruptcy instead of being tenth or fifteenth in line to get paid before a bankruptcy filing.  They also understand that they could garnish your wages and levy on your bank accounts if you don’t pay them and that you would not be able to do anything about it because you would not qualify for bankruptcy relief again for several years.  Therefore, even after a bankruptcy filing, creditors often consider you a very attractive credit risk.

 

  • Employment: Unfortunately, private employers can pass judgment on your application if they know you have filed for bankruptcy or see that you have a lower credit score than other applicants. Most employers wouldn’t want to hire people who are handling a personal issue as significant as bankruptcy or poor finances as there is a chance the financial issue will affect their job performance. Being open and straightforward with employers can help you get through this prejudice, but sadly, it won’t always help them ignore your circumstances.  However, this also happens frequently with people who have poor credit scores and who haven’t filed for bankruptcy relief.  Often, potential employers will see that your situation is more manageable and secure after a bankruptcy than it was before and that you have been freed of the mental anguish and emotional stressors that you had before.  They know that they will not be served with a garnishment summons on your wages because your debt issues have already been taken care of.

 

  • Renting: Like lenders and employers, landlords may also tend to discriminate against potential renters based on their credit scores or recent bankruptcy cases. Understandably, landlords need tenants to pay rent on time. This means they may place judgment on potential renters based on their credit scores. In the eyes of a landlord, it’s simpler and easier to judge based on credit scores than the many other factors that could be involved.

 

In general, you can avoid these post-bankruptcy issues, but if you do experience them, there are ways to navigate these difficulties. To learn more about the process of filing bankruptcy in New Ulm, MN, and life after filing, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

When and Why Bankruptcy Might Be Your Best Option for Debt Relief in Worthington, MN

In today’s fast-paced consumer world, it might seem easier than ever for businesses to thrive. Despite the increased spending most individuals and households have been doing, especially since the advent of online shopping, many businesses are still struggling with the debts that have existed for years on top of the new financial obligations of the technological age.

 

Debts like building mortgages, equipment expenses, online hosting subscriptions, credit card readers, licenses, and more are all part of running a typical business today. Because of the additional expense that technology requires and the high cost of owning a business, it’s not unexpected that most would benefit greatly from debt relief. Behm Law Group, Ltd. can help you determine if filing for bankruptcy is a form of debt relief in Worthington, MN, that’s right for your situation.

 

Bankruptcy as a form of debt relief can be highly effective for businesses in many different financial situations, but it’s not always the right option. In some cases, filing for bankruptcy may be more detrimental because of the effect it has on your credit and the potential loss of some of your business or personal assets, especially if you want to keep your business operating as usual.

 

Considerations for Debt Relief from Bankruptcy

Often, however, businesses considering bankruptcy at all will likely benefit greatly from the process. To understand if you should think about bankruptcy as a viable option, there are several red flags that can give you an idea of your business’s financial standing:

 

  1. Long-Term Standing: If your income-to-debt ratios show that even a long-term income wouldn’t be sufficient to rebalance your budget and cash flow your business, bankruptcy might be the right choice. Revenue is something that fluctuates throughout the year for every business, but if your bad month turns into a bad quarter, year, and so on, your long-term standing is precarious, if not nonexistent.
  2. At-Risk Assets: If your business is a sole proprietorship or a partnership, as many small businesses are, your personal assets may be at risk if you’re unable to repay your business debts. Creditors can take action to seize your personal property as well as your business assets to repay your debts. If you file for bankruptcy, you can halt any collections with the power of the automatic stay injunctive mandates of 11 U.S.C. §362.
  3. Other Options: There are options outside of bankruptcy that may provide the debt relief you need. Debt consolidation or settlement, negotiating with creditors, and other options may be more suitable to your situation than bankruptcy. However, non-bankruptcy options are often uncertain and precarious because your creditors are not required to work with you and they’re not required to stop collection efforts while you’re trying to work with them.  So-called “debt consolidation companies” who advertise very aggressively on the internet and who purport to deal with your creditors on your behalf are especially troubling.  They have no special influence or legal authority over your creditors and they can’t make your creditors do anything at all.  Often, the only parties who benefit from such non-bankruptcy “debt consolidation plans” are the debt consolidation companies themselves.  Often, people will pay into these plans for months and years only to have their creditors garnish their wages and freeze their bank accounts anyway.  Often, people will not be able to get the money back that they’ve paid to a debt consolidation company because the contracts they sign with such companies provide that the payments first go to satisfy the fees charged by the company before anything gets paid to creditors.  If you’ve considered all other options and still aren’t finding the relief you need, it may be time to think about bankruptcy.
  4. Post-Filing Plan: If you’ve considered bankruptcy and find you’re able to picture filing and establishing a long-term plan, it’s likely you can gain many benefits from filing a bankruptcy case. Behm attorneys can help you build your case and create a post-filing plan for reorganization after bankruptcy is concluded.

 

If you’re looking for debt relief in Worthington, MN, and are considering bankruptcy, contact Behm Law Group, Ltd. at (507) 387-7200 today to learn more.

Voluntary vs. Involuntary Case Dismissals When Filing Bankruptcy in Luverne, MN

Across the U.S., individuals and businesses are filing bankruptcy each month. Not only is the process of bankruptcy designed to help filers come back from severe debt as well as sometimes give creditors some financial return, it also provides a system of balance for the economy. If you are considering filing bankruptcy in Luverne, MN or the surrounding area to discharge your debts, you are contributing to the health of the economy of your community, Minnesota, and the U.S. as a whole.

Because bankruptcy was designed to help debtors, creditors, and the economy alike, bankruptcy law has complex, strict legal boundaries that can be difficult to navigate without the help of an experienced professional. Behm Law Group, Ltd. provides the advice and guidance required to file a successful case as an individual or as a business.

Filing bankruptcy is one of the few legal processes that individuals or businesses can take on without representation. Utilizing the skills of an attorney, however, is highly recommended because of the intricate nuances of bankruptcy law. When filing bankruptcy, every case can have unique and unexpected conditions. Navigating through these conditions without an expert’s advice often results in a case being dismissed or property being permanently lost.

When it comes to case dismissals, the guidance of an attorney can help you avoid involuntary dismissals or, in certain situations, receive a voluntary dismissal.

Filing Bankruptcy: Types of Dismissals

Involuntary Dismissal

If your case doesn’t meet the requirements of the bankruptcy code, you could face an involuntary case dismissal. This occurs most commonly when forms and documents are missing or are inaccurate or if the filer fails to meet pre-bankruptcy requirements. Other reasons your case may be dismissed include failure to make alimony or child support payments during your case period (including the three to five years of a Chapter 13 repayment plan), failing the Means Test if you plan to file Chapter 7, failure to pay court fees, lack of a credit counseling certificate, and more.

 

Voluntary Dismissal

There are many occasions when a filer may request dismissal on a voluntary basis. In some cases, it can be difficult to convince the court to grant the dismissal, and a bankruptcy lawyer can be key to petitioning for and processing the dismissal in these conditions. Dismissal of a Chapter 7 case, for example, is rare. The court will only grant a voluntary dismissal if your creditors will not receive any compensation or benefit from the liquidation of your assets (i.e. it’s not in your creditors best interests). Dismissal from a Chapter 13 case is much more attainable. Typically, the court cannot hold you to a repayment plan against your will, and you can file a dismissal request to end your case whenever you want. However, this does allow creditors to have the automatic stay lifted and resume debt collection activities.

 

To learn more about dismissals and why an attorney is important when filing bankruptcy in Luverne, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

When Corporations, LLCs, and Other Businesses File for Chapter 7 Bankruptcy in Mankato, MN

Running a business is a difficult venture, and even with support systems in place, the enterprise can go wrong. Whether it’s sudden or gradual, debts can overcome a business income and leave no other option than some form of debt relief. Debt relief options vary, but the most effective solution for the long term is to file for bankruptcy. Corporations, LLCs, and other businesses that are not sole proprietorships or partnerships can file for two forms of bankruptcy: Chapter 11 (reorganization bankruptcy) or Chapter 7 (liquidation bankruptcy). Individuals and businesses alike can find guidance when filing for Chapter 7 bankruptcy in Mankato, MN, with the help of Behm Law Group Ltd.’s attorneys.

 

Chapter 7 works similarly for individuals and businesses, but with slight differences. The primary function of Chapter 7 is to liquidate the filer’s assets in exchange for debt discharge. Individual filers may claim exemption allowances to protect certain properties (e.g., the homestead exemption protects the filer’s home from liquidation), but businesses have no such exemptions to claim.

 

How Chapter 7 Bankruptcy Works

Corporations, LLCs, and business formats that are not tied to the owner’s personal debts can petition for Chapter 7 to discharge all of their business debt. Compared to an individual consumer Chapter 7 bankruptcy case, business bankruptcies are fairly cut and dry.

 

Filers work with an attorney to build their case, including all the required documents and financial records. When the petition is submitted to the court and all necessary bankruptcy fees are paid, the court appoints a trustee to handle the liquidation of the business assets. Properties, equipment, business accounts, and any other components of the bankruptcy estate are sold. Creditors are paid with the value of those sales, and the trustee takes his or her commission based on a percentage of the values received.

 

When the assets are liquidated and the trustee distributes the sale proceeds among the creditors of the business, the court will then discharge unsecured business debts, including credit card debt, utilities owed, lease obligations, loans, and other business debts. When this process is complete, the business filing is shut down, effectively ending operations.

 

Chapter 7 bankruptcy is a highly effective debt relief process for businesses, though it’s undeniable that your company will be closed down. Many large U.S. businesses, such as Lehman Brothers in 2008, have used Chapter 7 to rid themselves of debt and shut down. Lehman Brothers filed with $691 billion in assets and $619 billion in debt. This was a case that affected hundreds of employees, but for the long term, was a positive solution for all involved.  In many cases, after the bankruptcy process is completed, one can create a brand new business operation that does the same work as the business that filed for bankruptcy relief and one can operate much more efficiently and smoothly without all of the debts that encumbered the former business.

 

If your business is struggling to keep the lights on and hasn’t had success negotiating with creditors or finding other ways of resolving debt, filing for Chapter 7 bankruptcy may be the final option. Filing will release you from all your business debt effectively, though it will just as effectively close down your business operations.

 

To learn more about filing for Chapter 7 bankruptcy in Mankato, MN, as a business or individual, contact Behm Law Group Ltd. at (507) 387-7200 today.

How Businesses Filing Bankruptcy in Fairmont, MN, Affect Local Creditors

Our economy is a complex system that affects even simple business formats. Businesses of all shapes and sizes can thrive or fail depending on a wide variety of economic circumstances. When economic factors cause financial changes to a business, they have consequences for everyone involved, including owners, investors, customers, and employees. Failing businesses often have the greatest consequences to all parties involved in them, in addition to consequences to the economy as a whole. If you find yourself affected by a business filing bankruptcy in Fairmont, MN, Behm Law Group Ltd. offers guidance and counsel for those filing for Chapter 7, Chapter 13, and Chapter 12 cases.

 

If you are considering filing for a business bankruptcy, Behm attorneys can represent and support you throughout the case. However, we believe it’s important for all involved to understand how the prospect of a business bankruptcy will affect them. One recent example of how a business bankruptcy negatively affected parties involved more dramatically than the typical bankruptcy is the case of Colleen’s Consignment Stores in Las Vegas, NV.

 

In this case, the owner of the business may have created more detriment to creditors than would have been necessary. As small furniture consignment shop, Colleen’s Consignment Stores bought used furniture for resale. The company did not pay for the furniture bought from sellers within the weeks leading up to the company’s bankruptcy filing, and so those sellers became involved in the case as creditors.

 

The nature of this case caused much backlash from those who were involved unexpectedly as creditors and for the employees of the company who were given no warning of the bankruptcy. Some creditors were unaware of the bankruptcy until they were called to the required meeting of the creditors. Many were unsettled by the fact that their goods may be sold during the liquidation process and many were upset about the fact that the company bought furniture while potentially considering filing for bankruptcy.

 

In a nutshell, the effects of this bankruptcy case on the creditors were the following:

 

  1. An automatic stay was placed on their ability to collect payment for their furniture.
  2. They had to submit a proof of claim to retain any chance of receiving payment for their goods.
  3. Their goods would likely be sold in the liquidation process and they would not receive payment.
  4. They had to attend a meeting of creditors and sacrifice additional business and personal time throughout the case resolution.

 

Overall, this bankruptcy case had a less-than-favorable outcome for many creditors and employees involved with the consignment shop. However, this is an exception to the many bankruptcy cases that provide positive results for all parties involved. Bankruptcy is often an effective way to resolve debts for the filer and to provide some form of recompense for the creditors.

 

With the help of Behm Law Group, you can file a bankruptcy case that will steer away from issues such as those in the consignment store case and offer better results for all involved. To learn more about filing bankruptcy in Fairmont, MN, contact us today at (507) 387-7200.

How to Handle Becoming a Creditor Involved in a Chapter 7 Bankruptcy in Owatonna, MN

As a firm of bankruptcy attorneys, Behm Law Group, Ltd. is often most concerned with how a bankruptcy case affects and works out for the people and businesses filing it. However, we believe it’s important to provide information for everyone involved in the case if they’re unfamiliar with the process in any way.

 

There’s an unfortunate standard of thinking in bankruptcy that there are two sides of a battle with the creditors on one side and the filers on the other, while the bankruptcy trustee oversees the fight. The truth is that everyone is in it together, and a bankruptcy process is designed to provide as fair a treatment as possible for all those involved. If you’ve found yourself involved in a Chapter 7 bankruptcy in Owatonna, MN in any capacity, Behm Law Group, Ltd. can provide the advice and guidance you need.

 

Creditors of anyone who has filed for bankruptcy know that the process is a difficult one for each and every lender who is now facing the possibility that they won’t be repaid in full. In more cases than not, a bankruptcy has several creditors who don’t typically provide loans and may not know what to do when their lendee can’t repay a debt.

 

Suddenly a Creditor

The creditors that have the hardest time handling a bankruptcy case are those who’ve never dealt with this situation or given a loan before, such as:

  1. Friends and family who have given the bankruptcy filer a personal loan.
  2. Customers who have prepaid for a service from a business that is now going bankrupt.
  3. Customers who are financing a product (a car, for example) and the provider has gone bankrupt.
  4. Companies with services/products given to any party on Net 10, 15, 30, or 60 terms.

If you’re listed as a creditor in a bankruptcy case, there are certain actions you must take if you want debt repayment in any capacity. If you’ve received a “Notice of Bankruptcy Filing” and are listed as a creditor, you may have to file a proof of claim to avoid losing any chance of repayment. Filing a claim is simple, but requires specific documentation. To accurately file a claim, you must fill out U.S. Bankruptcy Court forms included in a Proof of Claim. While your repayment might not be in full, you’re entitled to some debt accommodation or repayment as a creditor.

 

If you’re caught up unexpectedly in a Chapter 7 bankruptcy in Owatonna, MN as a creditor or considering filing for bankruptcy as an individual or business, Behm Law Group, Ltd. can help. Contact us at (507) 387-7200 to learn more today.

 

 

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.