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.

Facing the Bankruptcy Appellate Panel With the Help of a Bankruptcy Attorney in Jackson, MN

For many people, the prospect of facing legal issues in any type of court is a daunting one. Because most legal actions can affect your life for the long-term, it’s natural to be apprehensive about going through any court proceeding. The process of bankruptcy is no exception, but with the help of a reliable legal professional, you can be protected and guided from start to finish. Behm Law Group, Ltd. provides support and assistance with the preparation of your petition, the accurate recording of your financial information, protection from creditors, case structuring, and help navigating the bankruptcy process every step of the way. Before you launch into this complicated process, take full advantage of the help of a Behm bankruptcy attorney in Jackson, MN.

When you file a bankruptcy case, it gets filed in the U.S. Bankruptcy Court in your location. In Minnesota, there is only one District for the bankruptcy court – the District of Minnesota.  However, there are several Minnesota bankruptcy court divisions, including St. Paul, Minneapolis, Duluth, and Fergus Falls.  Whether you choose to file for liquidation bankruptcy – chapter 7 – or debt reorganization bankruptcy – chapter 13 – and whether you’re filing on behalf of your business or as an individual consumer, your bankruptcy case will be processed through one of these divisions, depending on where you reside in the state.  The filing of a bankruptcy case is a federal legal proceeding, as opposed a legal proceeding brought under Minnesota state law.  The Bankruptcy Court is a specialized federal court that was specifically created by Congress to process bankruptcy cases.  It was the sense of Congress that bankruptcy matters were so specialized, detail oriented and nuanced that a highly specialized court system was needed to process them.

With the guidance of a Behm attorney, our clients are able to successfully file a bankruptcy petition that provides them a fresh financial start, freedom from creditor harassment, and relief from crushing debt.

Occasionally, however, a case must be appealed after the court makes a decision that doesn’t rest well with either the filer or the creditors involved. If this occurs, your bankruptcy case will be taken to the Bankruptcy Appellate Panel (BAP). This is a panel of three bankruptcy judges that reviews the initial decision of the bankruptcy court. Minnesota is located in the Eighth Circuit Court of Appeals, and bankruptcy appeals would be processed through the Thomas F. Eagleton Courthouse in St. Louis, MO.

The process of resolving bankruptcy appeals is an undertaking that’s complicated and nuanced to an exacting degree. How these cases are handled depends on the financial past of both filer and creditors, the arguments of the parties involved, and a wide variety of other current circumstances. For those who have little to no experience with bankruptcy law, self-representation is a dangerous choice especially if a case is put to the test of the BAP.

Don’t put yourself at risk if you’re considering filing for bankruptcy. Instead, schedule a consultation with Behm Law Group, Ltd. Even if your case isn’t sent to the BAP, the guidance of an experienced attorney is a critical benefit during this trying time. For more information about our work as bankruptcy attorneys in Jackson, MN, contact us at (507) 387-7200 today.

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.

 

Understanding Assignment and Bankruptcy in Mankato, MN

Businesses struggling with unmanageable debts have a range of options for debt relief at their hands. While debt consolidation and debt management plans are popular options that’ll keep a debtor’s overall credit in good standings, there are often situations when these debt relief options only act a bandage instead of a true healing process. When you’re unable to pay your debts and don’t have any way of increasing your income in the next few years, filing for bankruptcy is your best option. Behm Law Group, Ltd. offers the legal advice and assistance you need to successfully file for bankruptcy in Mankato, MN.

 

Bankruptcy is designed to help both debtors and creditors out of a sticky situation, but some creditors may try to dissuade you from filing for Chapter 7 bankruptcy and instead liquidate your business outside of court with an assignment process.

 

ABC

 

Assignment for the benefit of creditors (ABC) is an option for business debtors to privately sell assets and return the value of those sales to creditors. When creditors are awarded these sales, they’ll release debtors from payment obligations. This option might be a way to avoid attorney fees and court proceedings, but the process overall is more beneficial to your creditors than to you.

 

Why is Bankruptcy Better?

 

Filing for bankruptcy, despite its effect on your credit, is a better option for business debtors than ABC for a number of reasons:

  1. In bankruptcy, creditors are forced to allow asset liquidation for all dischargeable debts, but in an ABC, they can choose to forgo approval of discharge on debts higher than the secured collateral value. For example, if you owe $5,000 on an auto loan, but the car is only worth $4,500, the creditor would not have to discharge the debt in an ABC.
  2. Unincorporated businesses are not protected during an ABC against creditors seizing the business owners’ personal assets. This means you could be forced to liquidate your personal car or other property in an ABC. In bankruptcy, however, the debts and the assets of incorporated and unincorporated businesses are generally not involved with the liquidation of one’s personal property.
  3. Personal collateral guarantees and other forms of personal security interests on business debts are not removed in an ABC as they would be in bankruptcy. This means if your property was used to secure a loan, creditors can force you to liquidate that property even if it’s not connected to your business in other ways. Bankruptcy allows for exemptions to prevent you from losing your property even if it’s tied to your business debt.

 

ABCs have their benefits, but most of those benefits inure to your creditors. Filing a bankruptcy is the most effective way to remove debt with minimized liability to you and your property. To learn more about the advantages of filing for bankruptcy in Mankato, MN and to find out how we can help, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

 

Handling a Rental Property When Filing for Bankruptcy in Windom, MN

When filing for bankruptcy, you’ll have to take all your property into consideration. Your home, car, and even expensive jewelry are part of your bankruptcy estate and will be handled according to the exemptions you can claim, the equity in your property, and any additional claims your creditors make. Whether you file for Chapter 7 liquidation bankruptcy or Chapter 13 reorganization bankruptcy, there is a possibility that you might not be able to retain all of your property in the process. With the professional guidance of Behm Law Group, Ltd. attorneys, you can find the optimal solutions to resolving property issues and protecting your property when  filing for bankruptcy in Windom, MN.

One of the biggest concerns for homeowners filing for bankruptcy is whether or not they’ll lose their home in the process. That’s where the homestead exemption comes into play, protecting most homes from liquidation during Chapter 7 bankruptcy. Because debts are restructured in a Chapter 13 case, homeowners generally don’t have to worry about losing their homes in Chapter 13 bankruptcy.

However, there are cases where a filer owns multiple rental properties in addition to one’s principle residence. The homestead exemption you can use to protect your primary residence isn’t applicable to rental properties, so it can be more difficult to keep rental properties when filing for bankruptcy.

Rental Property in Chapter 7

If you have equity on your rental property and its value is higher than the debt you owe, you probably want to hang onto that property. To try and protect your rental property from liquidation during the Chapter 7 filing process, you have to assert an exemption claim. Because you can’t use the homestead exemption, your only choices include a portion of the un-used federal homestead exemption (up to $11,850) and the federal wildcard exemption (adding another $1,250). In Minnesota people can elect to utilize either the state or the federal exemptions, so it’s possible you can protect some value in your rental property depending on its worth versus how much debt is against it. If the value of your rental property is less than the debt against, the trustee will not attempt to liquidate it because the entire value is extinguished by the debt against it.  Essentially, the creditor that holds the mortgage or other secured lien has full and complete rights to it.  Generally, you can keep making mortgage payments on the rental property outside of bankruptcy.

Rental Property in Chapter 13

In Chapter 13, your property debts are reorganized with other applicable debts into a three to five year repayment plan. This means you’ll be able to keep your rental property and continue making the monthly payments on it.  However, you can only do this if there is equity or value in the rental property above the debt you owe against it and the property generates a positive income for you.  In other words, the income you receive from the rental property must exceed the associated monthly expenses (mortgage payment, utility payments, property tax payments, insurance payments, etc.). If the rental property generates negative revenue, however, you will be required to surrender it in Chapter 13. You may also be able to find options to cram down or strip liens off to keep a rental property that generates a negative cash flow.

Find Professional Help When Filing for Bankruptcy

If you’re considering filing for bankruptcy in Windom, MN and own rental property, Behm Law Group, Ltd. can help you work to retain that property during the bankruptcy process. Contact us at (507) 387-7200 for more information about filing for bankruptcy and how our expert bankruptcy attorneys can help you.

 

 

Judgment Liens and Handling Them With a Bankruptcy Lawyer in Fairmont, MN

Filing for bankruptcy is an option available to almost every consumer and business in the US. However, despite the layman’s access to filing for bankruptcy, the fact remains that it is a complex, highly nuanced legal process. While a debt from which a judgment lien is obtained is discharged in a bankruptcy proceeding, a judgment lien can still remain after a bankruptcy is concluded and a bankruptcy filer must take certain steps to fully remove it. This responsibility is best approached with the help of a professional. Behm Law Group, Ltd. offers the counsel of an expert bankruptcy lawyer in Fairmont, MN, throughout your petition.

 

What is a Judgment Lien?

 

In a state civil court case, after a judge or jury hands down a decision, or after a court-approved settlement, a judgment is entered by the court. As part of a typical judgment, the court orders the payment of money from one person to another. But the person who owes the money (the debtor) doesn’t always pay up. A judgment lien is one way to ensure that the person who won the judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to be paid a certain amount of money from proceeds from the sale of a debtor’s property.

 

In Minnesota a judgment lien can attach to any real estate a person has an ownership interest in (farm, house, condominium, etc.).  A judgment lien is automatically entered against any real estate that a debtor (the person against whom the judgment has been assessed) owns in the county in which the judgment was awarded.  If the person owns property in another county, a creditor can take a judgment and docket or file it in that county at which time it becomes a judgment lien against any real estate a debtor owns in that county, too.  A judgment lien can last up to ten (10) years and it can remain a lien on a debtor’s real estate for that entire time.  A judgment lien can also be renewed for successive ten (10) year periods.  If a judgment lien is levied against someone’s real estate, any sale of the real estate can’t be completed unless the judgment lien is paid or expunged/removed.

 

Judgment Liens and Bankruptcy

A discharge obtained through bankruptcy nullifies the debt giving rise to a judgment lien.  However, a discharge does not require a judgment creditor to take affirmative steps to remove a judgment.  In other words, a creditor is not required to go to the county in which it obtained the judgment and ask the court to remove the judgment lien from a debtor’s real estate.  Thus, even after a bankruptcy has concluded, a judgment lien becomes a nuisance lien that still clouds title to a debtor’s real estate and prevents any sale of the real estate from being consummated.

 

In order to remove a judgment lien from the real estate, a debtor must, after the bankruptcy has concluded, file an application to discharge or expunge the judgment lien with the state court in which the judgment and judgment lien were obtained in the first place.  Generally, one can only do this with regard to a judgment lien on real estate that one owns and actually occupies as one’s homestead.  Minn. Stat. §548.181 is the statute that one must use to remove or discharge a judgment from real estate that one owns.  There is a specific protocol that must be followed.  Navigating the procedure and making sure it is done correctly is extremely difficult without the help of a knowledgeable, trained professional. With the help of Behm Law Group, Ltd. and the expertise of a Behm bankruptcy lawyer in Fairmont, MN, filing for bankruptcy can be a successful experience that offers financial recovery. We can assist you with the removal of judgment liens following the completion of a bankruptcy case.  Contact us today at (507) 387-7200 today for more information.

Judgment Liens and Handling Them With a Bankruptcy Lawyer in Fairmont, MN

Filing for bankruptcy is an option available to almost every consumer and business in the US.
However, despite the layman’s access to filing for bankruptcy, the fact remains that it is a
complex, highly nuanced legal process. While a debt from which a judgment lien is obtained is
discharged in a bankruptcy proceeding, a judgment lien can still remain after a bankruptcy is
concluded and a bankruptcy filer must take certain steps to fully remove it. This responsibility is
best approached with the help of a professional. Behm Law Group, Ltd. offers the counsel of an
expert bankruptcy lawyer in Fairmont, MN, throughout your petition.

What is a Judgment Lien?

In a state civil court case, after a judge or jury hands down a decision, or after a court-approved
settlement, a judgment is entered by the court. As part of a typical judgment, the court orders the
payment of money from one person to another. But the person who owes the money (the debtor)
doesn’t always pay up. A judgment lien is one way to ensure that the person who won the
judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to
be paid a certain amount of money from proceeds from the sale of a debtor’s property.

In Minnesota a judgment lien can attach to any real estate a person has an ownership interest in
(farm, house, condominium, etc.). A judgment lien is automatically entered against any real
estate that a debtor (the person against whom the judgment has been assessed) owns in the
county in which the judgment was awarded. If the person owns property in another county, a
creditor can take a judgment and docket or file it in that county at which time it becomes a
judgment lien against any real estate a debtor owns in that county, too. A judgment lien can last
up to ten (10) years and it can remain a lien on a debtor’s real estate for that entire time. A
judgment lien can also be renewed for successive ten (10) year periods. If a judgment lien is
levied against someone’s real estate, any sale of the real estate can’t be completed unless the
judgment lien is paid or expunged/removed.

Judgment Liens and Bankruptcy

A discharge obtained through bankruptcy nullifies the debt giving rise to a judgment lien.
However, a discharge does not require a judgment creditor to take affirmative steps to remove a
judgment. In other words, a creditor is not required to go to the county in which it obtained the
judgment and ask the court to remove the judgment lien from a debtor’s real estate. Thus, even
after a bankruptcy has concluded, a judgment lien becomes a nuisance lien that still clouds title to
a debtor’s real estate and prevents any sale of the real estate from being consummated.

In order to remove a judgment lien from the real estate, a debtor must, after the bankruptcy has
concluded, file an application to discharge or expunge the judgment lien with the state court in
which the judgment and judgment lien were obtained in the first place. Generally, one can only
do this with regard to a judgment lien on real estate that one owns and actually occupies as one’s
homestead. Minn. Stat. §548.181 is the statute that one must use to remove or discharge a
judgment from real estate that one owns. There is a specific protocol that must be followed.

Navigating the procedure and making sure it is done correctly is extremely difficult without the
help of a knowledgeable, trained professional. With the help of Behm Law Group, Ltd. and the
expertise of a Behm bankruptcy lawyer in Fairmont, MN, filing for bankruptcy can be a successful
experience that offers financial recovery. We can assist you with the removal of judgment liens
following the completion of a bankruptcy case. Contact us today at (507) 387-7200 today for
more information.

Understanding Bad Faith Cases When Filing for Bankruptcy in New Ulm, MN

If you are considering filing for bankruptcy, there are a number of ways you can prepare your financial situation before you file a bankruptcy petition that can help your case and bring about the best results for you. Many of these preparation techniques are acceptable methods for improving the possible outcome of your bankruptcy case—for example, choosing a certain time to file or avoiding certain financial obligations. However, there are instances when certain actions done before filing for bankruptcy or during a bankruptcy case can result in the dismissal of your case on the grounds of “bad faith.” Behm Law Group, Ltd. offers legal advice and assistance to help prevent a potential bad faith bankruptcy case when you’re filing for bankruptcy in New Ulm, MN.

While there are legitimate means of preparing for filing for bankruptcy or altering your finances to your advantage before you file a bankruptcy case, some such techniques could be considered bankruptcy “red flags” and prompt your bankruptcy trustee to determine that your case has been filed in bad faith. When you file for Chapter 7 or Chapter 13 bankruptcy, you must meet the “good faith” requirement in order to proceed. If there are aspects of your case that suggest you may be trying to take advantage of the bankruptcy system, your bankruptcy trustee or even one of your creditors could view your case as having been filed in bad faith and could ask the bankruptcy court to dismiss your case.

Examples of common actions or circumstances that could be construed as bad faith include:

  1. The filer hid certain assets, like keeping cash in a coffee jar or in a safe in one’s home, and did not disclose the cash in one’s bankruptcy petition.
  2. The filer has little to no cash flow and is not registered as being unemployed with the government (this could alert a trustee to think that there is hidden income somewhere – the trustee could conclude that you are working for cash only and not disclosing it).
  3. The filer had a job change during the bankruptcy period or recently prior to filing for bankruptcy and did not reveal an income increase to the trustee.
  4. The filer made one or more large luxury purchases prior to filing for bankruptcy (vacation expenses, electronics, and jewelry are common examples).

Another common occurrence that may lead to a dismissal for bad faith is an attempted conversion from a Chapter 13 case to a Chapter 7 case.

Chapter 7 Conversion When Filing for Bankruptcy

If a filer is in a Chapter 13 repayment plan, one may attempt to convert that case to a Chapter 7 case if one can no longer pay the monthly Chapter 13 plan payments. This can occur if the filer had a job change, experienced a temporary period where one was unemployed, or incurred unexpected large expenses. However, if the filer begins to convert a case to Chapter 7 and one’s situation improves during that time (for example, one gets a better paying job, or a family member gives one a large sum of money through inheritance or otherwise), one’s case could be dismissed for bad faith.  In short, it would be seen that one would be inappropriately trying to convert to a chapter 7 case – essentially indicating that one does not have the financial ability to make any payments to one’s creditors – from a chapter 13 case.  Given the receipt of a large sum of money from a relative or given a higher paying job, the trustee and the bankruptcy court would conclude that one would have the ability to continue making payments to one’s creditors and should, therefore, be required to stay in a chapter 13 case.

There are other examples of why your case may be dismissed for bad faith, and you can learn about all the additional circumstances that may lead to bad faith in the American Bankruptcy Institute Journal.

Find out more about filing for bankruptcy in New Ulm, MN with the help of Behm Law Group, Ltd. and contact us today at (507) 387-7200.

Possible Plan Outcomes with Chapter 12 Bankruptcy in Jackson, MN

The seasons of winter and spring in Minnesota are the most difficult times for farmers who support their households with income from agricultural sources. In fact, it’s a time when bankruptcies filed by family farmers spike across the country. In 1987, Chapter 12 bankruptcy was added to the bankruptcy code to help family farmers recover from extreme financial difficulties through the process of debt restructuring and debt consolidation. Behm Law Group, Ltd. offers legal advice and assistance for farmers who are considering filing for Chapter 12 bankruptcy in Jackson, MN.

The process of Chapter 12 bankruptcy is similar to that of Chapter 13 reorganization bankruptcy, but offers specific benefits tailored to fit the financial circumstances of a family farming household. The process of Chapter 12 takes a filer’s debts and restructures them to create a new payment plan that can last 3 to 5 years. This plan requires a full repayment of priority unsecured debts, such as tax debts, and, generally, a specific percentage (0%-100%) repayment of all other debts.

The outcome of a Chapter 12 bankruptcy case can be decided in one of five ways:

  1. Converted: If your household income is low enough to pass the Means Test and you have either failed to propose a repayment plan or your proposed plan was not confirmed by the bankruptcy court, you can have your case converted to a Chapter 7 liquidation case.

 

  1. Confirmed without discharge: If your repayment plan proposal is accepted, your plan will be confirmed or approved by the bankruptcy court. Depending on the amounts you owe and the types of debts you have, you may not actually receive a discharge of your debts and you may only need the assistance of a chapter 12 bankruptcy proceeding to simply restructure or consolidate your debts.

 

  1. Confirmed with discharge: The most common outcome for approved Chapter 12 cases includes a repayment plan that is confirmed by the bankruptcy court and provides for the restructuring or consolidation of some debts and for the discharge or other debts. Debts that are often discharged in a Chapter 12 bankruptcy include medical bills and credit card debts. This is the optimal outcome of a Chapter 12 case.

 

  1. Dismissed before confirmation: If your Chapter 12 case is filed in bad faith, or if you have engaged in other fraudulent behavior either before or after your case is filed, your bankruptcy case could be dismissed before you begin the chapter 12 plan confirmation process.

 

  1. Dismissed after filing: If you engage in fraudulent behavior within the 3 to 5-year repayment plan period, your plan can be dismissed, even after you successfully get the bankruptcy court to approve or confirm your chapter 12 plan. This can result from a number of different circumstances, for example, if you hide additional income or attempt to convert your case to Chapter 7 in bad faith.

 

If you’re a local family farmer and struggling to meet debt payments and daily financial obligations, Chapter 12 bankruptcy might be a way to recover. Contact Behm Law Group, Ltd. at (507) 387-7200 today for more information about filing for Chapter 12 bankruptcy in Jackson, MN.