Selling in Foreclosure and Automatic Stay in Chapter 7 Bankruptcy in Pipestone, MN

Owning a home with a mortgage is a major expense, and often, mortgage debts and foreclosure play a large part in filing for Chapter 7 bankruptcy. If you own a home and are having difficulty meeting mortgage payments, choosing to file might be the best course of action to recover from financial harm. Behm Law Group, Ltd. provides legal assistance to homeowners filing for Chapter 7 bankruptcy in Pipestone, MN.

If you’re facing foreclosure on your home, Chapter 7 bankruptcy can actually turn your troubles concerning mortgage debt around. However, that result all depends on a few things.

  1. Your home equity and Homestead Exemption: The method of Chapter 7 bankruptcy is to liquidate assets to repay your creditors and discharge debts. This process is much more complex in practice. In fact there are several steps in determining which properties can be liquidated and which debts can be discharged. Your home equity and the home exemption amount you can claim decide how your mortgage and home will be treated in Chapter 7.
  2. Your bankruptcy trustee’s commission: In cases where your home qualifies for liquidation in a Chapter 7 case, your trustee is incentivized with a commission from the sale. Starting with the difference of the sale against the debt owed, your trustee will take 25% on the first $5,000 made, 10% on the next $50,000, and 5% on the remainder below $1 million.
  3. How long Automatic Stay lasts: When you enter into the bankruptcy process, the court issues an automatic stay, which immediately prevents your creditors from collecting. If your home is in foreclosure, your debts will still be placed under the automatic stay for some or all of the time it takes to process your case. If your creditors press the court to lift automatic stay, you may be faced with continuing to make payments to them even while you’re in the process of filing for bankruptcy. However, if the automatic stay lasts for a month or two, you can still save a significant amount from keeping those monthly mortgage payments.
  4. If you will keep your home: Whether or not you will keep your home depends on the exemption you can claim and your unprotected equity. If your home is not in the situation to provoke liquidation, you can keep your home after bankruptcy, and if you negotiate terms with your lender before filing, you can change payments on your mortgage. If your equity and exemption amount trigger a sale, selling in foreclosure can also be beneficial because your mortgage debt will be discharged and you may gain tax advantages.

 *Determining your unprotected equity can be done with the following equation:

(Market Value of Home) – (Homestead Exemption) – (Trustee Commission) – (Cost of Selling the Home) – (Mortgage Debt) – (All Non-Mortgage Liens on the Home) = (Your Unprotected Equity)

For more information about how foreclosure affects your mortgage and home status during Chapter 7 bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Holding on to Retirement Plans and Pensions When Filing for Bankruptcy in Pipestone, MN

Sometimes financial difficulties arise when least expected, and tackling the burdens of debt can prove more and more trying as time passes. Even with the relief that the U.S. Bankruptcy Code can provide to households and individuals in need of debt alleviation, the stripping of assets with debt liquidation or the reorganization of debts with repayment plans does not solve all problems. If you’re considering filing for bankruptcy in Pipestone, MN, Behm Law Group, Ltd. can provide assistance with your petition so you can make the best out of a sticky situation.

For the majority of bankruptcy cases, pensions and retirement plans are left untouched. The U.S. Bankruptcy Code was designed to protect the filer as much as possible during and after the bankruptcy process, including shielding all pension funds and retirement plans with only a few exceptions.

Non-Exempt Pensions

The few pensions that do not qualify for an exemption from bankruptcy filings include the following:

  • Employee Stock Purchase Plans (ESPP)
  • Plans that are not considered legitimate retirement plans under sections of tax code indicated in the bankruptcy process
  • Plans that are not fully funded or that are incorrectly funded
  • Plans that are not in compliance with tax code in any other way, including roll-overs or transfers and plans without approval from the Internal Revenue Service
  • An Individual Retirement Account (IRA) inherited from anyone not your spouse

Automatically-Excluded Pensions

There are many types of pensions that are untouchable during the bankruptcy process because they are considered excluded from your asset stockpile (your estate). As such, you do not need to claim them as exempt, but you should still offer information about these accounts to your trustee and attorney.

Automatically-excluded pensions include the following:

  • Plans under IRC 414(d) (most government retirement plans)
  • Plans under IRC 567 (most deferred compensation plans)
  • Plans under IRC 530(1)(b) (most educational IRAs)
  • Plans under IRC 403(b) (most tax deferred annuity plans)
  • Plans that qualify under the Employee Retirement Income Security Act of 1974 (ERISA)

There are also several forms of non-excluded retirement funds and pensions that you can claim as exemptions in your bankruptcy case; however, these codes change between state exemption laws and federal exemption laws. You can elect to choose either state or federal exemptions when you file for bankruptcy in Pipestone, MN, depending on which will benefit you most in the long term. Behm Law Group, Ltd. can provide the legal advice you need to make these kinds of decisions throughout the bankruptcy process. Contact us today at (507) 387-7200 for more information.

How Filing for Chapter 7 Bankruptcy in Waseca, MN, Affects Types of Small Business Ownership

Small business owners are some of the bravest adventurers when it comes to finances. Not only does starting a small business often require a large investment in the form of a loan or personal funds, but the liabilities of starting and maintaining a small business are numerous. Sadly, many entrepreneurs are unable to keep expenses balanced with revenue, especially during the first few years of a startup. Although bankruptcy is a common occurrence for small businesses, the outcome of bankruptcy will change depending on the type of business and the ownership status. At Behm Law Group, Ltd., our attorneys work to protect small business owners throughout the process of filing for Chapter 7 Bankruptcy in Waseca, MN.

For most small businesses, there are three main forms of ownership. Each type of ownership is affected differently when the business enters the process of Chapter 7 bankruptcy:

  • Sole: If you own your business, you are the sole proprietor. As a sole proprietor, your finances are linked with your business finances. If your business (or you) are over your head in debt, you can only petition for a personal case of Chapter 7 bankruptcy. It’s not possible for your business to file for bankruptcy alone because there is no separate, distinct business entity apart of you, so the process must combine your personal and business debt into one case. You can, however, prevent many of your assets from being liquidated with your bankruptcy exemptions.
  • Partner: If your business is a partnership, it still is not a separate entity from you and your partner’s personal finances. When filing for a Chapter 7 partnership business case, the process is not really any different from a personal case. In partnership business bankruptcy, the partnership debts are collectible against you and all partners personally and your personal assets must also be listed in the bankruptcy petition.  However, you can still protect your personal assets with your bankruptcy exemptions.
  • Corporations and LLCs: A business owned as a corporation or an LLC is a separate and distinct legal entity from you and, therefore, it must file for a separate business bankruptcy.  In such a bankruptcy, however, there are no exemptions that can benefit the corporation or LLC. The trustee handles liquidation for corporations and LLCs. If your business is an LLC, you are required to eliminate any of your own debts with a personal bankruptcy case before filing a business case.

Filing for bankruptcy can give you the financial relief you need when there are no other options. For more information about filing as a small business for Chapter 7 bankruptcy in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200.

Guilt, Blame, and Shame: The Real Reasons Why Most People File for Bankruptcy in Mankato, MN

The accumulation of debts is a widely varied process that can occur over the course of years or in an instant. Those struggling with overwhelming debts for whatever reason often experience situational guilt or shame. Creditors will frequently add to this negative mindset, placing the blame solely on the debtor and gaining an advantage over them by emphasizing their guilt. At Behm Law Group, we’re here to tell you that the guilt and shame you may be feeling about your debts is unwarranted, despite the blame-game your creditors play. If you are considering filing for bankruptcy in Mankato, MN, were here to help, starting with lifting the pressure on your conscience and beginning to think critically about the situation.

While your creditors would have you believe that your debts are all your fault and shame you into feeling guilty enough to place repaying them ahead of your health and your family, these claims are often baseless. In fact, the vast majority of debts leading to bankruptcy are due to unavoidable or unexpected circumstances.

Job loss is one of the most common reasons our clients have found the need to file for bankruptcy. Lay-offs and a poor job market make optimal conditions for people of all income brackets to gain debts.

Medical bills are a necessary debt for anyone who needs medical care to stay healthy and capable of caring for their families. Unfortunately, even those with insurance can land in a pit of soaring medical expenses.

Divorce rates grow each year and the emotional upset alone can be enough to damage the health and security of a household. The debts from lawyer fees, spousal lawsuits, and general divorce expenses can send anyone down a spiraling path to bankruptcy.

Credit misuse is a common occurrence for people of all ages and financial backgrounds. With late fees, interest rates, and general credit card misuse, credit debt can multiply right beneath your nose.

Accumulated expenses from a variety of sources can quickly land you in a world of debt. These expenses are often unexpected and unavoidable, such as home damage after a natural disaster or costs related to a brokendown car.

You may be in a rough financial situation, but know that the blame does not rest on your shoulders alone. If you are considering filing for bankruptcy in Mankato, MN, contact Behm Law Group for a consultation at (507) 387-7200.

 

Avoiding Mistakes When Filing for Bankruptcy in Mankato, MN Behm Law Group offers Bankruptcy Advice

Filing for bankruptcy may seem daunting and complicated, but with the right assistance and advice during the filing and discharging process, bankruptcy may be the best thing that has happened to you financially in a long time. U.S. Bankruptcy Courts don’t exist to belittle you, shame you, or leave you out to dry during the filing process. However, there are some occasions that may make it seem that way if you forego the expert legal help our attorneys at Behm Law Group, Ltd. can provide when filing for bankruptcy in Mankato MN.

There are several common, yet crucial, mistakes that debtors can make when filing for bankruptcy. Without legal assistance, you could be subject to making mistakes concerning these aspects of your financial situation during the filing process:

Settling Debt: If you have begun the filing process, you should avoid paying your unsecured creditors (creditors that do not have collateral) such as credit cards, medical debts and other debts that you do not wish to retain. These debts will be discharged in the bankruptcy. Continuing to pay them will neither improve your credit standing following the bankruptcy nor incentivize creditors to lend you credit. Paying on these debts is like “throwing good money after bad”. It will do absolutely nothing for you. Of course, you should continue to pay on secured debts (creditors that do have collateral), such as mortgage lenders and vehicle lenders, that you want to retain.

Retirement Funds: Because your creditors legally cannot touch your retirement account, you should not cash in your funds until the process is complete. You should never use your retirement money to “settle” your debts. By doing so, you are essentially wasting a financial “nest egg” that you have worked hard to establish that you can fully protect in bankruptcy.

Family Loans: Avoid paying off family loans or helping family and friends financially during or directly before the filing process. Your creditors and the bankruptcy trustee administering your bankruptcy case may bring a lawsuit against your family and friends to recover the money you paid them.

Property: Hold all your current property in your name during the bankruptcy process. DO NOT transfer property out of your name. If you do transfer assets out of your name, you will most assuredly lose the property you transferred.

Lawsuits: Because pending lawsuits or lawsuits against you will continue until your bankruptcy is filed, you should not ignore these suits. Our attorneys can help advise you on lawsuits and determine whether or not you should respond before a bankruptcy is filed.

Purchases: Making large purchases on your credit cards or cash advances in other forms is a frequent mistake made during the filing process. Wait until the process is complete to ensure you won’t still be accountable for these charges.

The professional attorneys at Behm Law Group, Ltd. are here to keep you from making these common mistakes and other important missteps when it comes to filing for bankruptcy in Mankato, MN. For more information, contact us at (507) 387-7200.

 

Why It Is Wise to Hire a Bankruptcy Attorney

If you live in Marshall, MN, and are contemplating filing for bankruptcy, it makes the most sense to hire a bankruptcy attorney with Behm Law Group, Ltd. vs. doing it yourself. Filing on your own without the assistance of an attorney is a process known as “pro se” representation.

While some folks think it might save them some money by filing “pro se,” it’s actually not a wise thing to do for several reasons. They include the following:

  • A lot is at stake when you file for bankruptcy, and filing a bankruptcy petition by yourself can be a complicated and demanding process.
  • Attorneys have the experience and training necessary to give you the best advice possible for your specific bankruptcy situation.
  • Judges, trustees, and creditors’ lawyers are comfortable working with bankruptcy lawyers and aren’t always happy to be working with someone who is not familiar with the intricacies of the law. A trustee may even request that you hire an attorney if they believe that an attorney will benefit you.
  • A bankruptcy attorney looks out for your best interests at every step of the bankruptcy process and makes sure you receive the full relief to which you are entitled under bankruptcy law.
  • Bankruptcy can be an intimidating and time-consuming process. You will need to fill out many forms, research the law, and attend hearings. If you are not comfortable with any aspect of the bankruptcy process, consider hiring Behm Law Group, Ltd. We will prepare the forms, attend the hearings with you, and guide you through the complicated process.
  • An overwhelming majority of Chapter 13 cases filed without an attorney get dismissed by the court.

If you’re facing the possibility of filing for bankruptcy in Marshall, MN, it’s wise to give Behm Law Group, Ltd. a call at (507) 387-7200 to discuss your options. We’re standing by to assist you with the complexities of filing for bankruptcy!

 

The Differences Between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Fairmont, MN

If you’re struggling to pay your bills and being hounded by debt collectors in Fairmont, MN, you may be contemplating filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Fortunately, the compassionate and knowledgeable team at Behm Law Group, Ltd. can assist you with your decision to file for bankruptcy.

Below is a brief rundown of the differences between Chapter 7 bankruptcy, which is referred to as a liquidation, and Chapter 13 bankruptcy, which is called an adjustment of debts of an individual with regular income or a reorganization.

Your financial situation generally dictates which type of bankruptcy you will file for. Chapter 7 is for people with little or no income, while Chapter 13 is for folks who have a higher and regular income. Reportedly, the most common filing is Chapter 7. Companies, married couples, and individuals are allowed to file Chapter 7. Companies are not allowed to file Chapter 13.

A debtor filing Chapter 7 bankruptcy is essentially scrapping everything and starting over, hoping for a clean financial slate. Once the filing is underway, an administrator or trustee is appointed to manage the sale of the debtor’s assets. This does not mean everything that the person owns is sold. Both state and federal laws allow for certain exemptions, meaning that the debtor might get to keep some property, such as his or her private residence and/or personal items like clothing.

Once the debtor’s assets are liquidated, the trustee pays certain creditors a portion of the money raised. Of course, not all of the creditors receive money from the proceeds, so many of the debtor’s financial obligations are forgiven or discharged. Once a person has filed for bankruptcy under Chapter 7, he or she can’t file again for eight years.

Chapter 13 is a reorganization bankruptcy designed for debtors with regular income who can pay back at least a portion of their debts through a repayment plan. If you make too much money to qualify for Chapter 7 bankruptcy, you may have no choice but to file for Chapter 13. Many debtors choose to file for Chapter 13 because it offers many benefits that Chapter 7 does not. These benefits include the ability to catch up on missed mortgage payments or strip wholly unsecured junior liens from your house.

In Chapter 13 bankruptcy, you get to keep all of your property, including non-exempt assets that you could otherwise lose in a chapter 7 case. In exchange, you must pay back a portion of your debts through a repayment plan. The amount you pay back depends on your income, expenses, and types of debt.

If you think you are a viable candidate for either Chapter 7 or Chapter 13 bankruptcy, give Behm Law Group, Ltd. a call at (507 ) 387-7200. We’re standing by to discuss the intricacies of all four types of bankruptcy (7,11, 12 and 13) and to help you make the best decision for you and your family.

 

Will Dire Farm Economy Predictions Result in More Bankruptcies in the Redwood Falls, Minnesota Area?

The U.S. Department of Agriculture is predicting that farmers will produce a record corn crop in 2016. But if Minnesota economic forecasts of dropping commodity prices, a stronger U.S. dollar, and weak global growth create fallout in the Redwood Falls, Minnesota area, Behm Law Group, LLC is ready to help.

Analysts are worried that the combination of healthy supplies, the strength of the U.S. dollar, and slow growth in world-wide demand have kept prices for corn and soybeans low. The result is harming the profits of Minnesota farmers and it could impact other related businesses.

Stephen Behm and the staff at Behm Law Group, LLC are keeping an eye on the latest trends and their impact on the local economy. Behm Law Group has earned a reputation for skill and excellence in the field of bankruptcy law in the Redwood Falls area. They have assisted hundreds of people to make a fresh start financially through Chapter 13, 12, and 7 bankruptcies.

The outlook for 2016 does have some bright spots as well: forecasters credit Minnesota’s large and diverse economic base for helping it absorb the global slowdown. There is a reason for optimism with job gains in education, health care, retail, and finance, as well as a need for tradespeople as homebuilding activity begins to rebound.

If Minnesota’s changing economic fortunes leave you seeking some assistance and you need questions answered, Behm Law Group, LLC offers private and free bankruptcy information. These meetings at the Redwood County courthouse are available to anyone and we expect no commitment should you decide to attend.

Behm Law Group, LLC wants to help you navigate the ever-shifting world economy and get the relief you need through bankruptcy, even if it’s only by having a conversation to help you answer some questions and figure out your options. You don’t have to live with crushing debt and hounding collection calls. Allow us to do what we have confidently and successfully done for hundreds of others: help you with a fresh financial start.

 

Dismissal Versus Discharge in the Worthington, Minnesota Area

In the Worthington, Minnesota area, going through the bankruptcy process can be a bit confusing. There are papers to complete, assets to assess, and numerous monetary concerns to consider. Which document means what, and how exactly does one get through the process with the most success? Where to begin a filing and where to end it?

Though the process can be troublesome, it’s important to make sure that you understand the language used throughout your personal bankruptcy filing, especially when it comes to the difference between “discharging” or “dismissing” debts.

In today’s post, just in time for St. Patrick’s Day, we’ll examine the distinctions between these two separate processes, one of which is fittingly known as “the pot of gold.”

Discharge: This process is truly the pot of gold at the end of a bankruptcy filing. If your case is discharged, that means that all former debts are satisfied and creditors may no longer hold you responsible for past expenses. In this outcome, the filer is truly free of their debts and is clutching onto that pot of gold, successfully walking away from their bankruptcy case.

Dismissal: Dismissal is somewhat more complicated than discharge. There are three specific reasons for this:

  1. Dismissal means that the entire bankruptcy filing is deemed void.
  2. Dismissal can sometimes occur before, during, or after a bankruptcy discharge. This can yield different results depending on the personal situation and can be either a positive or negative outcome.
  3. Dismissal means creditors still have the ability to pursue past debts. This means that filers are not free of their debts.

Of these two options, those filing for bankruptcy typically hope for a discharge rather than a dismissal. Especially around this time of year, everyone is searching for a pot of gold!

In the Worthington, Minnesota area, your personal bankruptcy filing should be clear and easy to understand. For all your concerns regarding bankruptcy, contact the professionals at Behm Law Group Ltd. today.

The Case for Discharging Student Loan Debt in the Mankato Minnesota Area

Over the past few weeks, we’ve been examining how to discharge student loan debt in the Mankato, Minnesota area. Bankruptcy is an option in specific circumstances, but does not always apply to every student. So, how are you supposed to know whether or not your case is valid?

This week, we’ll take a look at a few cases of student loan debt that arrived in bankruptcy court. Although some were more successful than others, each of these cases offers an important look into the world of discharging student loans through bankruptcy:

  1. Case One: This case involves a telemarketer working for $8.50 per hour. At fifty years old, barely making enough to get by, this person was released from their student loans through bankruptcy because they were trapped in a cycle of poverty and debt.
  2. Case Two: A part-time cellist and music instructor came to bankruptcy court after years of attempting to pay student loan debt. This person was denied their claim because, despite their college degree, they had chosen to accept low paying work. The courts ruled in this case that the individual could be capable of earning more money.
  3. Case Three: A married couple obtained a discharge through bankruptcy because they were both working part time jobs and paying private school tuition for their children. The courts ruled this couple could follow a future repayment plan for their student loans.
  4. Case Four: Generally speaking, if the borrower attended a school deemed fraudulent, or if their education was not ultimately beneficial to them, the courts often rule to discharge the borrower’s loans through bankruptcy.

There are a number of ways in which student loans can impact people in the Mankato, MN area. Whether you’re trapped beneath your student loans, or curious whether or not you may have a bankruptcy case, the professionals at Behm Law Group, Ltd. are here to help. Give us a call today.