First Three Critical Steps in Filing for Bankruptcy in Redwood Falls, MN

Life is full of unexpected events. When it comes to debt and financial difficulties, it’s best to deal with those life events head on. You may have accumulated debts over the years or be struggling with sudden expenses, but whatever the reasons leading up to severe debt, you don’t have to face it alone. Getting rid of debt and finding a fresh start is always a possibility through filing for bankruptcy. With the expert support and advice of Behm Law Group, Ltd. attorneys, you can file a successful petition for bankruptcy in Redwood Falls, MN.

 

When the ball gets rolling in a bankruptcy case, things are quickly resolved. If you file for Chapter 7, your debts will be discharged and non-exempt assets liquidated. If you file for Chapter 13, your adjusted repayment plan will begin, and you can start making regular payments to a chapter 13 trustee fairly quickly. However, before you can reach that point in your bankruptcy case, you must perform a few crucial primary steps.

 

Filing for Bankruptcy- Starting Gates

 

  1. Gather your financial information: To put together a bankruptcy petition for either Chapter 13 or Chapter 7, you have to gather a comprehensive inventory of financial documents. This includes filling out the necessary bankruptcy forms, listing all debts, providing income information, listing your assets and properties, and describing your monthly expenses for household needs. Behm attorneys will provide you with direction on how to put together this information to begin the bankruptcy process.
  2. Attend credit counseling: Even if you’ve completed the first step and gathered all the necessary information, you’ll still be required to complete an online credit counseling course in order to file a bankruptcy petition. You must work with a United States Trustee-approved credit counseling agency and complete the credit counseling course within 180 days of the filing of your bankruptcy petition. Behm Law Group, Ltd. can provide direction to quality, affordable online credit counseling in your area.
  3. Attend your 341 hearing: The last step to getting your case completed and obtaining debt relief is to attend your meeting of creditors (341 hearing). This meeting occurs after you have finished your filing for bankruptcy. This is not a court hearing per se where you appear before a bankruptcy judge. Rather, it is an administrative hearing where you appear before a bankruptcy trustee.  The bankruptcy trustee is a court-appointed attorney assigned to monitor, supervise and review your bankruptcy case.  You must personally attend the 341 hearing and your creditors have a right to attend if they like.  It is up to the bankruptcy trustee to review your bankruptcy paperwork and ask you questions at the 341 hearing – questions you must answer under oath and subject to penalty of perjury – to ensure that your paperwork is accurate. Part of the purpose of the 341 hearing is to ensure you’re apprised of the consequences and seriousness of filing for bankruptcy and to discuss debt reaffirmation with your attorney. During this meeting, the trustee will also make sure you’re not abusing the process of bankruptcy.

 

After these steps are completed, the next part of filing for bankruptcy —which varies depending on the chapter you file for— is getting a discharge order from the bankruptcy court which discharges the vast majority of your debts.

 

To learn more about filing for bankruptcy in Redwood Falls, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

Using the Marital Adjustment to Qualify for Chapter 7 Bankruptcy in Jackson, MN

Chapter 7 liquidation bankruptcy is the most common type of individual consumer bankruptcy in the US. The process of Chapter 7 works to liquidate a filer’s non-exempt bankruptcy estate property in return for the discharge of their debts. Not only is it an effective way to free yourself from credit card debts, medical bills, and more, Chapter 7 bankruptcy represents a government-sanctioned fresh start. If you’re struggling to meet debt payments, Behm Law Group, Ltd. offers the legal support and advice you need to file a successful case for bankruptcy in Jackson, MN.

 

Chapter 7 bankruptcy offers a direct path to debt relief, but it’s not a process available to everyone. To prevent bankruptcy abuse, every filer must pass the Means Test before they can qualify for Chapter 7.

 

The Means Test examines your finances to determine if your income and debts are at a level that will benefit from Chapter 7 bankruptcy while remaining fair to your creditors. If your income is lower than the Minnesota median for a similar household size, you qualify to file for Chapter 7 bankruptcy. You may also qualify if the Means Test shows your debts are higher than your income even if your income is greater than the state median income for a household of your size.

 

If you’re married, you may be able to qualify for Chapter 7 bankruptcy using the marital adjustment deduction.

The Means Test looks at the household income to determine your eligibility, but if you choose to file for bankruptcy and your spouse doesn’t, you can deduct the expenses attributed solely to your spouse. By deducting these expenses, you can lower the income you list on your Means Test, making it possible to qualify for Chapter 7. It works like this:

 

  • Your spouse’s income would usually be listed with your own on the Means Test, but he or she doesn’t want to file for bankruptcy with you.
  • You choose to take away the expenses of your spouse using the marital adjustment deduction.
  • In doing this, you reduce those expenses from the full income of the household, lowering your overall income and making it more likely that you will qualify for Chapter 7.

 

Expenses that can be deducted from your income vary depending on your location and court approval, but most deductions will allow for:

 

  • Payroll including taxes, insurance, union dues, retirement, and other deductions
  • Alimony, child support, and other court-issued domestic support payments
  • Your spouse’s attorney fees
  • Payments on debts in your spouse’s name
  • Payments on 401(k) loans
  • Expenses on your spouse’s car
  • Cell phone expenses in your spouse’s name
  • Recreation expenses including vacations, hobbies, memberships, and other entertainment expenses
  • Property expenses for real estate in your spouse’s name

 

Overall, you can deduct a significant portion of your income through the marital adjustment deduction and possibly qualify for Chapter 7 bankruptcy even with a high income. To learn more about filing for bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200.

Understanding When and Why You Can Be Forced into Involuntary Bankruptcy in Fairmont, MN

If you’re struggling to make monthly debt payments on time or missing payments completely, you may be eligible to file for bankruptcy. However, there are many who consider bankruptcy to be a last-ditch effort to save their finances. Whether you’re ready to file for bankruptcy or want to try to work through your debts another way, the full bankruptcy process might still be in the cards. This is because it’s possible for your creditors to force you into an involuntary bankruptcy if your debts and properties fit certain criteria. If you’re pushed into an involuntary bankruptcy in Fairmont, MN, Behm Law Group, Ltd. can protect you and guide you throughout the process.

Bankruptcy law is designed to benefit both the consumer or business as well as the creditors involved in the highest capacity possible. You may not want to file for bankruptcy, but you might be forced to “choose” this process anyway if your creditors file an involuntary case against you.

 

Involuntary Bankruptcy

The U.S. bankruptcy code protects creditors against negligent debtors by allowing them to file involuntary cases against those debtors, pushing them to file for Chapter 7 bankruptcy (Chapter 13 is not permitted in an involuntary case). When a debtor neglects their debts yet still maintains valuable assets, creditors can petition the courts to force that debtor into a liquidation bankruptcy process that’ll result in two things. First, creditors will gain some repayment from the liquidation of the debtor’s assets. Second, the debtor will receive discharges for the related debts. The majority of involuntary cases are filed against businesses rather than individuals, family farmers, or fishermen, but creditors can force individuals into bankruptcy if they owe significant debts and have adequate assets for creditors to benefit from in liquidation.

 

Rules

  1. One or more creditors must file a petition to set the ball rolling on an involuntary bankruptcy case.
  2. The debtor must respond to the petition within 20 days of receipt or the court will automatically force the debtor and creditors to start the involuntary bankruptcy process.
  3. If the debtor responds within 20 days, a hearing date will be established that’ll allow the debtor to defend themselves against the bankruptcy.
  4. If a debtor has more than 12 unsecured creditors, there must be a minimum of three creditors (with at least $15,775 owed to them in unsecured debt) participating in the petition for an involuntary bankruptcy.
  5. A single creditor can file an involuntary petition if the debtor owes them at least $15,775 and that debtor has under 12 unsecured creditors.
  6. Debts cannot be disputed or dependent on future legal decisions (e.g. lawsuit-related debts).
  7. Involuntary bankruptcies cannot be filed against family famers or fishermen, banks, insurance companies, credit unions, or non-profits.

 

If you’ve been avoiding debt payments for some time and are worried your creditors may try to file an involuntary case against you, contact Behm Law Group, Ltd. today at (507) 387-7200 to learn more about bankruptcy in Fairmont, MN.

Successfully Getting Credit During Repayment of Chapter 13 Bankruptcy in Mankato, MN

 

Bankruptcy is often viewed as a last option for those with extreme debt and low income, but there’s more than one kind of bankruptcy available to individuals and businesses. Chapter 7 bankruptcy is the type of bankruptcy that fits the description that’s most often associated with being bankrupt due to the liquidation of the filer’s non-exempt assets. Chapter 13 bankruptcy, on the other hand, is a completely different process that works to reorganize a filer’s debts. If you’re struggling to meet debt payments but don’t want to possibly sacrifice non-exempt assets in a liquidation process, Behm Law Group, Ltd. can provide the legal support you need to file a strong case for Chapter 13 bankruptcy in Mankato, MN.

 

If your income to debt ratio is higher than the Minnesota median income for a household of your size, you cannot qualify for Chapter 7 bankruptcy. Even if your income is low enough to pass the Means Test, you may still choose to file for Chapter 13 bankruptcy and keep your estate intact. In this case, you’ll work with an attorney and trustee to draft a repayment plan that is suited to your situation.

 

A Chapter 13 bankruptcy repayment plan is a highly effective way for those struggling with debt to sort through their finances under the guidelines of a three to five-year bankruptcy period. Despite the many benefits of a repayment plan, however, the period it fills is a long time. During that three to five-year period, you might experience several life changes including anything from a new job to moving into a new home. Your repayment plan could be altered to accommodate those life changes, but there are occasions where you need to operate outside of your bankruptcy plan. One common example of this is when the filer is in need of getting a loan.

 

There are few reasons an individual working through a Chapter 13 bankruptcy repayment plan may need to seek a loan, and because of your overall financial history, your trustee may or may not approve any loans you try to obtain. However, there are times when you need a little boost, whether you’re starting a business that’ll gain more revenue in the long-term or if you have a real emergency.

 

Gaining credit during your repayment plan period depends on several factors:

 

  1. Whether you receive the required court authorization and trustee approval.
  2. The type of credit you’re attempting to obtain (consumer or business).
  3. How a new loan will alter your repayment plan.

 

Generally, you may be granted permission to obtain a loan based on household emergencies. Home repairs, medical emergencies, vehicle repairs, or disaster recovery are some primary examples.

 

If you’re working through a repayment plan or considering filing for bankruptcy in Mankato, MN, Behm Law Group, Ltd. can help. To learn more about the legal support and advice our attorneys offer, contact us at (507) 387-7200 today.

Properties Excluded from an Estate when Filing for Bankruptcy in Owatonna, MN

If you’re struggling to meet debt payments on a regular basis and have been for some time, you may find yourself in over your head financially. Fortunately, U.S. law offers a way back to the surface and an opportunity for a fresh start through the process of bankruptcy. Navigating this nuanced system alone is a large feat, but with the help of Behm Law Group, Ltd., you’ll have the guidance and support you need to file a strong, successful case for bankruptcy in Owatonna, MN.

When you choose to file for bankruptcy, the long-term benefits are numerous, and you receive certain immediate advantages as soon as you file (automatic stay, for example). However, the benefits that bankruptcy provides come with the rest of the process, including the examination of your debts and the categorizing of your properties and accounts into a bankruptcy estate.

No matter which type of bankruptcy you file for, the bankruptcy estate plays an essential part in your case. In a Chapter 7 case, the estate determines what your trustee can liquidate in exchange for your debt being discharged. In a Chapter 13 case, the bankruptcy estate can determine the structure of your debt repayment plan and the amount you will have to repay to your creditors. While most of your properties and accounts are included in the bankruptcy estate, there are some exceptions.

What’s not in the bankruptcy estate?

  1. Any property or accounts you acquired after the date you file your bankruptcy petition. Keep in mind, however, that you must notify your bankruptcy attorney of any property that you acquire within 180 days of the date that you filed for bankruptcy relief. Your bankruptcy attorney will speak with the bankruptcy trustee administering your bankruptcy case to determine whether how much, if any, of such property may be subject to seizure.
  2. Child support arrears owed to you from another party.
  3. Joint bank accounts that your name is on along with the name of some other party (if the proceeds in such an account don’t actually belong to you).
  4. Withheld wages for employee benefits and health insurance programs.
  5. Education funds that are tax deferred.
  6. Funding from tuition programs qualified under the 2005 bankruptcy act and Coverdell account—if those funds are deposited at least one year prior to filing for bankruptcy or are for the benefit of your child, stepchild, step-grandchild, or foster child. Any funds deposited two years prior to bankruptcy are exempt from your estate, and you can exempt up to $5,850 from your estate if it was deposited between the one and two-year period.
  7. Last but not least, the majority of retirement funds are exempt from the bankruptcy estate.

The process of bankruptcy is designed to give debtors recovery and relief and not to punish or leave them without anything to their name while repaying something to their creditors as best as possible. While many of your properties are included in the bankruptcy estate, you’ll still have ample opportunity to exempt and protect most of your assets.

To learn more about filing for bankruptcy in Owatonna, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

 

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

When you file for bankruptcy, the people or organizations you owe money to are broken down into several different types of creditors. Generally, these creditors are considered as priority, secured, and unsecured. Within these categories, there is a simple hierarchy: priority creditors are repaid in full, secured creditors are paid the value of their collateral after exemptions are taken into account or the collateral is surrendered back to them, and unsecured creditors are paid with varying amounts depending on your case. While these creditors are considered similarly in both Chapter 7 or Chapter 13 bankruptcy, the outcomes of their repayments are different. Behm Law Group, Ltd. offers expert counsel and support when you file for Chapter 13 bankruptcy in Pipestone, MN, to help you navigate through your creditors and case.

 

For most Chapter 7 cases, the creditors are treated based upon which debts can be discharged and which exemptions can be claimed. In a Chapter 13 bankruptcy, however, the creditors must be treated differently based on the types of debts and the significance of those agreements.

 

When a Chapter 13 case is filed, the end goal is to restructure the filer’s debts into an appropriate repayment plan. This plan provides for the full repayment of priority debts and the payment of the value of secured debts, but often offers the filer the benefit of partial repayment of unsecured debts. The creditors of unsecured debts are written into the repayment plan in two fundamental ways.

 

  1. The first basic requirement for the treatment of unsecured creditors in a Chapter 13 bankruptcy repayment plan is that they will be paid at least as much as they would if the filer had filed a Chapter 7 bankruptcy.
  2. Secondly, the filer must pay all disposable income – surplus income left over after reasonable and necessary living expenses are paid – to their unsecured creditors throughout the duration of their three to five-year repayment plan. This income amount may fluctuate throughout the plan period, and the chapter 13 plan must be updated to reflect these income changes.

 

The repayment plan period for any Chapter 13 bankruptcy case depends on the filer’s income. If your income is less than the Minnesota median of a household similar to your own, your plan will last three years. If your income is higher than the median, you must file a five-year plan. The amount you repay your unsecured creditors will also depend on how long your plan lasts. For example, if you owe an unsecured creditor $5,000 and your disposable income adds up to $100 a month, you will repay 72% of that debt in a three-year plan or repay 100% of that debt in a five-year plan. In some cases, you will repay 0% of an unsecured debt when you file for Chapter 13 bankruptcy.

 

What you repay your unsecured creditors in Chapter 13 will vary greatly depending on your income and your additional debt payments and expenses. For most filers, these debts will be alleviated at least in part. For more information about your unsecured creditors and filing for Chapter 13 bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

What Happens When Retirees File for Bankruptcy in Redwood Falls, MN

Financial difficulties can occur for any number of reasons at any time in one’s life, but with the accumulation of debt into retirement and a decrease in income, retirees are increasingly becoming more likely to file for bankruptcy. Several studies have shown that in the past twenty years, the percentage of 65 or older bankruptcy filers has increased by more than 5%, and many of these petitions outlined medical debt as the primary financial burden of senior citizens. Debts gathered over a lifetime, a drop-in income after retirement, and the issue of medical bills with increased risks of health problems in advanced age all add up to severe financial struggles for many retirees across the country. Behm Law Group, Ltd. serves to protect you throughout the filing of your bankruptcy petition and help you understand what happens when retirees file for bankruptcy in Redwood Falls, MN.

 

The common concern for retirees and senior citizens who file for bankruptcy is how it will affect their retirement funds. Fortunately, most types of retirement accounts are protected from asset liquidation in Chapter 7 bankruptcy and the amount in your fund will not affect your repayment plan in Chapter 13 bankruptcy. Protected accounts include 401(k), 403(b), 457(b), and Keogh plans. The majority of other profit-sharing or benefit plans are also protected. Funds saved in an IRA, SIMPLE IRA, SEP IRA, or Roth IRA are protected from bankruptcy with a set exemption limit. The amount you can exempt from the bankruptcy process changes as the cost of living changes.

 

Another concern for seniors and retirees filing for bankruptcy is whether their Social Security will be involved in the process or not. Social Security is protected from wage garnishments along with disability income, but when that income is deposited into your bank account, it can sometimes be subject to garnishment. However, banks are required to know if federal benefits are in your account before they can take garnishing action, and even then, a two-month value of your Social Security and other benefits are protected.

 

If you are struggling to make ends meet in retirement and face looming medical bills or other debt, bankruptcy can be a valuable option. The majority of your retirement income is protected by federal law, and your retirement funds will most likely be completely protected in the process. With the help of a Behm Law Group, Ltd. attorney, you can free yourself from medical debt, credit card debt, utility debt, property debt, personal loans and more when you file for bankruptcy.

 

Live your retirement in peace and take full advantage of your freedom free from financial stress. Contact Behm Law Group, Ltd. today at (507) 387-7200 to learn more about whether filing for bankruptcy in Redwood Falls, MN, is right for you and start your petition today.

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

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

 

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

 

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

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

 

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

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

 

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

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

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

 

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

 

The Bankruptcy Court

 

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

 

Core Issues when Filing for Bankruptcy

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

 

Federal vs. State

 

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

 

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

 

 

Handling Debt Sale When Filing for Bankruptcy in Worthington, MN

When an individual or business fails to meet debt obligations without excuse, they may start to experience more aggressive collection actions from creditors. If you have been struggling to make your debt payments for several months, filing for bankruptcy might be the best option to end creditor harassment and get a fresh financial start. Behm Law Group, Ltd. provides the legal support you need when filing for bankruptcy in Worthington, MN and get optimal results in your case.

 

Generally speaking, when  filing for bankruptcy you’re immediately protected by the automatic stay for the period of time it takes to resolve your case. This means the creditors of the debts that will be handled in your case can’t perform any collection actions. However, things can get complicated when one of your creditors sells one of your debts while you’re filing for bankruptcy or in bankruptcy.

 

A creditor may choose to sell a debt to another creditor at any time, even while you’re in the middle of a bankruptcy case. A creditor might choose to sell the debt if they don’t want to wait for your bankruptcy case to be completed to see if it will get paid anything by the trustee administering your case. By selling your debt, they will receive a small immediate sum, and the buyer of the debt will stand in the place of the original creditor.

 

How does this affect filing for bankruptcy?

 

In most cases, the sale of a debt doesn’t affect your bankruptcy case. Whether you owe a debt to the original creditor or to a debt buyer, you still owe the same amount for that debt. From your perspective, it will be handled in bankruptcy as if there was never a sale. However, the original creditor or the debt buyer must notify the bankruptcy court of the sale so that the party in charge of the debt can receive payments in the event that you file for a Chapter 13 bankruptcy and are scheduled for a three to five-year repayment plan.

 

A debt sale may affect you if the debt in question is discharged or scheduled to be discharged. Because the selling of a debt included in a bankruptcy is an act that is in violation of either the automatic stay injunctive provisions of 11 U.S.C. §362 or the discharge injunctive provisions of 11 U.S.C. §524, you may need to take action if this occurs. For example, presume you have filed for Chapter 7 bankruptcy and your credit card debt was discharged in the process. Presume further that, soon after, you’re contacted by a creditor who claims they bought one of your debts and is attempting to collect payments. In this case, you should provide the creditor with a copy of the Notice of Bankruptcy Filing that was issued by the bankruptcy court when your case was commenced.  If your bankruptcy case has been concluded, you should provide the creditor with a copy of the Discharge Order that the court issued.  If the creditor continues to harass you and continues collection activities, you may be forced to contact your bankruptcy lawyer and sue the creditor in bankruptcy court.

 

The sale of a debt will often not concern you as a filer and is simply business between creditors. To learn more about this process and to receive legal support when filing for bankruptcy in Worthington, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.