Handling the Impact on Your Credit Score When Filing for Bankruptcy in Mankato, MN

Filing for bankruptcy can be a saving grace and vital step in helping businesses and families get back on their feet financially. Becoming bankrupt, however, is stigmatized in many ways. A large part of that stigma comes from how bankruptcy can affect credit. The fear of damaged credit or a credit report stamped with the implications of bankruptcy is often a strong deterrent for those considering filing for bankruptcy. Our attorneys at Behm Law Group, Ltd. provide legal advice and assistance to help you through the effects that bankruptcy in Mankato, MN, can have on your credit.

A bankruptcy filing can stay on your credit report for several years after filing. While a bankruptcy filing does impact your credit score, there are other factors to consider when it comes to bankruptcy and credit. A bankruptcy filing can actually be the starting point for rehabilitating your credit. To creditors, a bankruptcy filing is more a point of demarcation on your credit file. It shows creditors that before the bankruptcy filing your debt to equity ratio was skewed negatively such that the total of your debt far exceeded the value of your assets. It shows creditors that before the bankruptcy filing, your limited income was committed to and divided among many creditors. After a bankruptcy filing, your debt equity ratio will look much more favorable because the many creditors you had will no longer be relevant. New creditors will no longer have to compete with those old creditors with regard to your ability to make payments. After a bankruptcy, creditors know that they don’t have to compete with many creditors and that you can’t file for bankruptcy relief for several years. They are, therefore, more incentivized to work with you.

Chapter 7

Filing for Chapter 7 bankruptcy will essentially discharge all of your debts that are not exempt from the process, such as tax debt or child support debt, or denied based on situational grounds, such as debts that you may have incurred fraudulently. Chapter 7 will remain on your credit report for a maximum of ten years. This may seem hopeless with regard to increasing your credit, but, as related above, you will likely actually be more attractive to future creditors.

Chapter 13

Debts discharged during the Chapter 13 bankruptcy process are shown on your credit report no differently from Chapter 7. However, under the Fair Credit Reporting Act (FCRA), your creditors must denote those claims in such a way reflecting that you are no longer responsible for them. Your creditors must not list such claims as “past due” or “delinquent” or “account in collections” or “account assigned to legal”. Rather, they must list the claims as “account included in bankruptcy” or “account discharged in bankruptcy” or other similar language. If creditors fail to list the claims appropriately, a person can commence legal action against them under the FCRA.

Dealing with how a bankruptcy can impact your credit report may seem daunting but given time bankruptcy can become an important step in recovering from debts and starting anew financially. Behm Law Group, Ltd. is here to help you every step of the way when filing for bankruptcy in Mankato, MN. Contact us at (507) 387-7200 today for more information.

 

Understanding Good and Bad Debt When Considering Bankruptcy in Mankato, MN

Our consumerist culture, in combination with the demands of supporting a household or business, offers numerous opportunities to fall into debt. Credit cards, cars, and homes are common culprits that cause debt. What we frequently see in the clients that come to Behm Law Group Ltd. for legal advice and assistance with bankruptcy is a difficulty in distinguishing between types of debt. While all debt adds stress and financial obligations to your everyday life, the difference between good debt and bad debt could determine how you file for bankruptcy in Mankato, MN.

The normal debts that people acquire throughout their lives are generally categorized as “good” or “bad” debts. These types of debts are defined in simple terms, but are more complicated in the real world than they are on paper.

Good Debt:

Generally speaking, good debts are described as investments. Mortgages, student loans, business loans, and real estate loans are common examples of investment debts that have potential to increase in value over time. The concept of spending money to make money stems from the existence of investment-based debts.

For example, a mortgage may add to your financial responsibilities for several years, but in time, the value of the mortgaged property will increase and can be resold for a significant profit. Student loan debts are considered investments based on the idea that those with a degree statistically earn a greater income than those without.

Bad Debt:

The exponential growth in the use of credit-based payments as monetary value has continually increased cases of bad debt. Credit cards and store credit are common sources of consumer debt. Just as good debts are investments, bad debts are forms of divestment, meaning that from the moment they are obtained, they will consistently decrease in value and, very possibly, diminish the overall strength of one’s financial condition.

One example of a bad debt that almost every US citizen will handle throughout their lives is an auto loan. Even without a loan, cars themselves are almost always money pits that significantly depreciate over time. However, cars are also often a necessity of life, and there are many types of auto loans that are discharged in bankruptcy.

When filing for bankruptcy in Mankato, MN, the good and bad debts eligible for discharge will vary based on several factors. For legal help during your bankruptcy filing, contact Behm Law Group Ltd. at (507) 387-7200.

 

Debts Not Discharged Under Chapter 7 Bankruptcy in Mankato, MN

The Bankruptcy Code and the U.S. Bankruptcy Court can be very forgiving when it comes to the right debts and debtor. In the majority of cases, a debtor released from responsibility to debts (discharged from debts) is given a fresh start for building credit and a significant lightening of the demanded financial load. However, there are times when filing for bankruptcy is unadvisable given the type and circumstances of the debt in question. At Behm Law Group, our attorneys can guide and protect you when it comes to filing for bankruptcy in Mankato, MN.

For many individual filers and some businesses, Chapter 7 bankruptcy is often the most beneficial type of debt relief. Under Chapter 7, the debtor is released from all debts deemed dischargeable and the debtor’s assets (excluding allowable exemption claims such as homestead, vehicle and others) are distributed to creditors as debt repayment. In most cases, however, a person will be able to retain all of one’s property because the exemption allowances are very generous.

In some cases, filing for Chapter 7 bankruptcy is not beneficial to the debtor because the debts owed are non-dischargeable and could likely be denied for discharge.

Non-Dischargeable Debts:

Several types of debt are not recognized as dischargeable in U.S. Bankruptcy Courts. These include debts that obligate the debtor to the welfare of another person—for example alimony and child support debts or debts to the debtor’s employees. Similarly, debts for injury or death caused by alcohol consumption owed to another person are not discharged under Chapter 7. Educational debts such as student loans and several types of tax-related debts are also common types of non-dischargeable debts. However, student loans can be discharged if one is able to demonstrate “undue hardship” under 11 U.S.C. §523(a)(8). In order to do this, one must go beyond the initial bankruptcy filing and one must actually sue the student loan creditor and request the bankruptcy court to discharge the student loan debt. The burden of proof regarding “undue hardship” is on the person seeking to have the student loan debt discharged.

Denial of Discharge:

While debts that do not fall into the non-dischargeable category are approved under Chapter 7 for release from the debtor more often than not, there are times when debts are denied for discharge. These cases include those where the debtor has not kept accurate financial records, has committed a bankruptcy crime, has inaccurately explained assets or the loss thereof, or any cases where the debtor has committed fraud related to bankruptcy, assets, or debts. All that one has to do to have one’s debts discharged is to be honest and forthright with one’s bankruptcy attorney and list all of one’s assets and liabilities in one’s bankruptcy petition and related schedules.

At Behm Law Group, we make it our goal to help our clients understand any possible reasons why debts may not be discharged during the filing process under Chapter 7. With the help of our attorneys, filing for bankruptcy in Mankato, MN, doesn’t have to be an uncertain, difficult, or thankless process. For more information, contact us at (507) 387-7200 today.

 

How to Recover from Filing for Bankruptcy in Worthington, MN

After you’ve filed for bankruptcy in Worthington, MN, your credit will be damaged, but it won’t ruin your financial future forever. Listed below are several tips the attorneys at Behm Law Group, Ltd. would like you to consider to help you rebuild your credit and life after bankruptcy. Remember, if you’re contemplating bankruptcy, the compassionate professionals at Behm Law Group, Ltd. can help you with your decision by providing solid answers to your questions and concerns.

  • Create a budget to help you stay on top of your finances. The attorneys at Behm Law Group, Ltd. recommend NerdWallet. Non-profit credit counseling agencies offer free basic consumer help on topics such as budgeting. Simple budgeting forms can be downloaded from the Internet, too.
  • Begin building an emergency fund, even if it’s just a small amount at first. Research by the Urban Institute shows that having as little $250 in savings for an unexpected expense can protect families from resorting to payday loans or running up credit cards, which can start a new debt spiral.
  • Cautiously apply for a credit card. Try to obtain either a secured or unsecured credit card, and make sure to repay the entire balance every month. Doing this quickly establishes a timely payment history and improves your credit. Do not fall into the trap of obtaining too much credit.
  • Repair your credit. It’s unusual for your credit report to be 100% accurate following a bankruptcy, and some of your debts may not indicate that they were discharged in your bankruptcy. Its the creditor’s responsibility to update your credit reports to show that your discharged debts have a zero balance, but you obtain the best results if you dispute incorrect items on your credit report. The three major crediting reporting agencies offer free credit reports annually.
  • Open a new bank account. Opening a new checking or savings account will demonstrate financial stability. It can also give you a fresh slate to practice good financial habits. When you open your account, talk to the banker about signing up for automatic online bill pay. This will ensure that your bills are paid on time, which is a major factor in rebuilding your credit score.

If you have questions about what your life in Worthington, MN, will look like post-bankruptcy, give Behm Law Group, Ltd. a call at (507) 387-7200. We’re standing by to assist you with all aspects of filing for bankruptcy.

 

How to Know it’s Time to File for Chapter 7 Bankruptcy in Redwood Falls, MN

If creditors are calling you daily, your credit card debt is rising, and you have little or no savings or assets, it may be time to let Behm Law Group, Ltd. assist you with your Chapter 7 bankruptcy in Redwood Falls, MN and surrounding communities.

Chapter 7, the most common type of bankruptcy, is often referred to as “straight” or “complete” bankruptcy. Depending on your situation, filing a Chapter 7 may help you eliminate all of your debt without having any obligation to repay any of it. Because all of your debts may be eliminated, it is also often referred to as a “fresh start” bankruptcy. Chapter 7 bankruptcies are generally best if you don’t have a significant amount of assets, such as substantial equity in your home or other investments.

How do you know if Chapter 7 bankruptcy is right for you in Redwood Falls, MN? Here’s a roundup of red flags which signal a path toward bankruptcy:

Creditors are constantly calling you. If you are a chronic late payer or non-payer, you probably get numerous calls from your creditors, or their hired hands, wanting to know when they can expect payment(s). These calls can range from professional to downright harassing. Depending on the amount you owe and the lateness of the payment, the creditor might be willing to strike a deal with you regarding a payment plan. Be wary and consult a Behm Law Group, Ltd. attorney before agreeing to any deal.

You have rising credit card debt. If you find your credit card bill growing each month – despite your best efforts to pay it down – you’re headed for financial trouble. Making minimum payments and thinking you’ll eventually pay off your high credit card balances isn’t realistic. The way high interest charges are calculated and the associated fees with missing or late payments are added almost eliminates any value to making minimum payments on the debt. Also, if you’re using your credit cards to put food on the table and gas in the car, be very careful. Balances can add up quickly. If not managed proactively, they can become unmanageable in a short amount of time.

Your nest egg is small or non-existent. If you‘re living paycheck to paycheck, chances are you have not had the opportunity to save much or any money. Many people live their entire lives this way, always being vulnerable to happenstance and potential financial disaster when things go wrong. If you find yourself in this position, you could be on the road to bankruptcy.

If the above descriptions fit you and your family’s situation, call Behm Law Group, Ltd. at (507) 387-7200 and let us help you find an equitable resolution for your financial difficulties. We’re standing by to assist you with all of your bankruptcy needs.

 

The Cause of the Gawker Bankruptcy in the St. Peter, Minnesota Area

In the St. Peter, Minnesota area and across the United States, people have access to all kinds of celebrity gossip. Whether it’s your grandma snagging a magazine next to the checkout or your little brother Googling information about the latest famous downfall, we have nearly unlimited access to gossip about the rich and famous.

Recently, however, this access to information has become a bit of an issue for some stars. A celebrity gossip source known as “Gawker” recently filed or bankruptcy as a result of a suit against Hulk Hogan. Here’s all you need to know about the case that led Gawker to file for Chapter 11 bankruptcy:

  • Illicit Publications: Gawker recently published a private video of Hulk Hogan against his wishes. The content of this video was somewhat explicit, making Hogan seek legal action against the celebrity gossip site. Little did Gawker know, this suit would eventually lead to a bankruptcy filing.
  • Private Funding: Hogan was able to pay for this long, arduous lawsuit because Peter Thiel privately funded Hogan’s actions. Thiel is a major player in Silicon Valley, making his funds nearly endless for the purpose of Hogan’s suit.
  • Controversy: In the midst of this suit, there has been controversy amongst journalists. Some have argued that Hogan’s suit violates freedom of press and feel frustrated that Gawker had to file for bankruptcy. Others question Gawker’s news reporting, whether it relates to Hogan or other famous folks.

Expensive lawsuits can lead to bankruptcy in the St. Peter, Minnesota area and in the world of the rich and famous. If you find yourself in expensive legal trouble and you need the assistance of a professional regarding bankruptcy, we’re here to help. Contact the professionals at Behm Law Group Ltd. today!

 

Summertime Budgets in the New Ulm, Minnesota Area

Summertime is upon us in the New Ulm, MN area, which means folks are ready to get outside and enjoy the glorious sunshine. In the New Ulm area, there are all kinds of exciting activities to enjoy. However, if you’re going through a bankruptcy filing, it can be challenging to keep your budget in check during these three warm, sunny months.

Fortunately, there are all kinds of free or low budget activities to try out in New Ulm, so you can make the most of summer, even while on a budget or going through bankruptcy! Here’s a >list of a few exciting places to visit:

Minnesota Music Hall of Fame: For the low price of three dollars, this museum allows you to experience the musical culture of Minnesota! Featured in the museum are all kinds of well-known artists such as Bob Dylan, The Andrews Sisters, and Prince. What a fun, inexpensive way to spend a rainy summer day!

Museum of Brewing: Although it may seem like a brewery museum might only be geared towards those twenty-one or older, this museum is made for families to enjoy! Admission is free, making the Museum of Brewing a perfect venue for those budgeting or going through bankruptcy. Come see the grounds, enjoy the peacocks, and perhaps indulge in a beer (with or without root!)

Oktoberfest: German culture is important to New Ulm, so it’s only natural that Oktoberfest is widely celebrated! Better yet, admission to the event is free! Come listen to music and participate in traditional German events, without spending too much extra money. While you’re at it, why not pop by the glockenspiel, a forty-five foot tall monument that keeps New Ulm on time year round!

There are so many free or nearly free activities in the New Ulm, MN area, so if you’re concerned about spending too much money or bankruptcy, you can still have a fun and festive summer. For additional questions about your bankruptcy filing, contact the professionals at Behm Law Group, Ltd. today!

 

Little Free Summer Activities in the Mankato, Minnesota Area

Summer has officially begun in the Mankato, Minnesota area, which means folks are ready to get outside, work on their suntans, and celebrate three months of sunshine and fun! Although there are a lot of fun activities available during the summer months, it can be challenging to pay for expensive tickets or experiences while on a tight budget or while going through bankruptcy.

Fortunately, there are a lot of free activities available in the Mankato, Minnesota area. There’s one that’s especially exciting that also allows for a little physical activity: the Little Free Libraries scattered around Mankato and surrounding towns. Here’s how to make the most of those little libraries while keeping your bankruptcy budget in check:

Look for Libraries! There is a website available that can help you find all the Little Free Libraries nearest to you. How cool is that? Once you know the locations, sit down with a friend or family member to set your route. The more walking in the sunshine, the better!

Walk it Out! Once you’ve got a plan in mind, grab a book you’re ready to part with and start walking! Take time to enjoy the adventure between little libraries, and to see the neighborhood or town in a whole new way.

Lend or Borrow: Little Free Libraries rely on consistent donations and borrows from folks that pass by. If you see something you like, drop off your old book inside the library and take one that’s new. It’s yours to keep. That is, until you find the next book you want to borrow!

A Little Free Library walk is the perfect free summertime activity to kick off June in the Mankato, Minnesota area. Regardless of your budget or the status of your bankruptcy filing, this free outing will keep you happy and well read. Bankruptcy is not always fun, but that doesn’t mean your summer has to suffer!

For more information about your personal bankruptcy budget or bankruptcy filing, call the professionals at Behm Law Group Ltd. today!

 

Bankruptcy Turbulence for SkyMall in the Owatonna, Minnesota Area

It’s almost summertime in the Owatonna, Minnesota area, which means folks are preparing to travel and enjoy the sunshine! Though you may be boarding a plane sometime in the next few months, you’ll notice something is glaringly absent. Although you’ll still have access to those individually packaged peanuts, tiny glasses of ginger ale, and in-flight movies, Skymall will be nowhere in sight due to a bankruptcy filing from this past January.

There are a few different reasons why SkyMall succumbed to bankruptcy over the past few years, but here are the major reasons why you’ll be missing SkyMall on your next trip:

Phone Competition: Rather than perusing pages of neck pillows and pet accessories during flights, folks have recently preferred to look through their personal devices. This has decreased the amount of traffic through SkyMall, consequently decreasing their overall sales and taking them one step closer to bankruptcy.

Touch Down and Take Off: Although this had already been a problem during flights, SkyMall still took advantage of that precious time when customers couldn’t use phones during touch down and take off. When flights changed their policy on cell phone usage and folks didn’t have to turn off their phones, SkyMall finally had to file for bankruptcy.

The Cost of Paper: Under increasing pressure to go paperlessfor either environmental or cost-based reasonsairlines have recently found it difficult to justify carrying magazines or catalogues.

In the Owatonna, Minnesota area, folks are getting ready to take flight without SkyMall to keep them distracted and entertained. Fortunately, in recent months SkyMall has found a new buyer based out of New Jersey . Perhaps they’ll be back in business, out of bankruptcy, and ready to fly just in time for you to purchase a festive cat hat for Aunt Muriel this fall.

For additional information about bankruptcy filings, contact the professionals at Behm Law Group Ltd. today!

 

Fun, Fashionable, but filing Bankruptcy in the Marshall Minnesota Area

It’s important to look fashionable and fun in the Marshall, MN area, especially with summer just around the corner. While shops in the area are pulling their shorts and sundresses out of storage, one teen-focused retailer will be pulling out a “Closed” sign instead. Aeropostale filed for bankruptcy earlier this week.

Though Aeropostale may have once been a go-to destination for teen shoppers, it’s recently slipped out of the public eye. After a few years of struggling, they finally filed for Chapter 11 bankruptcy protection. Here’s all the information you need to know:

In total, this New York-centered retailer will close 113 of their 739 stores across the United States and Canada. This process will begin soon, and may have already begun in certain store locations. Stores slated to be closed in Minnesota are located in Blaine, Coon Rapids, and Woodbury.

The market for teen shoppers has changed in recent years. Rather than looking for logos, polos, or high price clothing, teenagers are looking to stores like H&M and Forever 21 for their quick fashion fixes. These types of stores have pushed Aeropostale out of the current youth market and into bankruptcy.

Though Aeropostale stores near you may be closing, they hope to reopen as a “standalone enterprise” after their Chapter 11 filing is complete. This will mean higher efficiency and a lower number of stores.

Aeropostale recently tried a social media revival, which ultimately fell flat. This failed marketing tactic was a sign that bankruptcy may be the best option for this teen clothing retailer.

Although Aeropostale is filing for bankruptcy protection, that doesn’t mean you’ll be without fashionable clothing in the Marshall, MN area. After their bankruptcy filing is complete, this retailer should be up and running once again.

If you have questions regarding bankruptcy or feel you need to file for bankruptcy protection contact the professionals at Behm Law Group, Ltd. today!