Posted on

Using Bankruptcy for Debt Relief after a Layoff in Fairmont, MN

Since the start of the coronavirus pandemic in the United States, thousands of individuals have been laid off when government shutdowns required businesses to close. While many have returned to work, there is a large population still suffering the effects of job loss and the debts accrued during that time. If you are struggling to meet debt payments each month due to a layoff, filing for bankruptcy will likely help you find much needed permanent debt relief and long-term financial stability. Behm Law Group Ltd. is one of the only law firms specializing exclusively in bankruptcy cases in southern Minnesota. Our attorneys provide legal services for those filing for Chapter 7, 12, or 13 bankruptcy. With our help, you can file a strong case and permanently resolve your financial issues for effective debt relief in Fairmont, MN, and the surrounding area.

 

The most important factor to consider after a layoff is how to distribute your funds. If you plan on filing for bankruptcy, use your income for essential items like food, gas, and utilities and mortgage and vehicle loan payments. The debts that accrue with your credit card bills, medical debts, past due utility bills and other such debts can be addressed and fully discharged when you eventually file for bankruptcy.

 

You will not be penalized for prioritizing and paying certain debts for essential things, such as your homestead mortgage payment, over other debts that are not essential. Generally speaking, you should not spend money on items like gambling or fancy vacations to foreign countries.  You should also not be paying friends or relatives on debts that you owe to them.  The bankruptcy trustee administering your bankruptcy case will review your bank account statements and other financial documentation.  The trustee could sue any friends or relatives you may have paid and recover the money you paid them for the benefit of your creditors.

 

Most people who have been laid off and had a lack of sufficient income for that time period choose to file for Chapter 7 liquidation bankruptcy. This chapter provides significant debt discharge in many cases, but only those with incomes below the state median or average income for a similarly-sized household will qualify. When you file your petition, the past six months of your earnings are analyzed to determine if you qualify for Chapter 7 bankruptcy. If you were recently laid off from a well-paying job, you may not be able to qualify for Chapter 7, but you can instead opt to file Chapter 13.  However, sometimes you can still qualify for a chapter 7 bankruptcy even though you’ve had a high paying job, you’ve been laid off from that high paying job and your income has been higher than the state average income for a household of similar size.  For instance, if you’re receiving unemployment compensation or your re-employment prospects are not encouraging you may still be able to qualify for a chapter 7 even though your income level was previously quite high.

 

Chapter 13 restructures debts into a three- to five-year repayment plan that is suited to your income. Whatever balances of your unsecured debts remain at the conclusion of your chapter 13 plan will be discharged.  If you had debts with the Internal Revenue Service (IRS) or the Minnesota Department of Revenue (MDR), the principal of those debts would be paid in full.  If you have just been laid off and your last six months of income prevent you from qualifying for Chapter 7, thus pushing you to file for Chapter 13, you may find that down the line a continued decreased income or ongoing diminishment of income will change your ability to meet your repayment plan requirements. Chapter 13 Trustees allow chapter 13 plans to be altered or modified when income changes are experienced during the three- to five-year plan repayment period to accommodate this reality.

 

To learn more about filing for bankruptcy and getting debt relief after a layoff in Fairmont, MN, and the surrounding region, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com today.

Posted on

Adversary Proceedings vs. Contested Matters for Debt Relief

Each year, thousands of U.S. households struggle with debt, and while a very few will eventually find ways to overcome that debt, most people will not. For those who know they will be unable to repay their debts, filing for bankruptcy is an effective option to resolve their debts permanently and without the threat of wage garnishment, creditor harassment, and foreclosure. Filing bankruptcy to discharge your debts provides a government-sanctioned process that provides permanent debt relief that is enforceable by law. At Behm Law Group Ltd., we help clients work through Chapter 7, Chapter 12 and Chapter 13 bankruptcy filings to find effective, long-lasting debt relief in Mankato, MN, and the surrounding area.

 

No matter what chapter you file, bankruptcy can be a detailed and nuanced process that requires the sharing of your current financial information with a third party. Your petition will need to include all of your debts— even ones that you want to keep—your income sources, your properties, and virtually all other aspects of your financial situation. The bankruptcy petition that you complete with your attorney is something that you sign under oath.  You make the representations in your bankruptcy petition subject to penalty of perjury.  Creditors rely on the accuracy of those representations.  The trustee administering your bankruptcy case relies on the accuracy of those representations. The bankruptcy court itself relies upon the accuracy of those representations.  Bankruptcy is an “on your honor” proceeding.  When you file bankruptcy, no one comes knocking on your door and invading your residence to see what you own.  However, it is vital and incumbent upon you and your attorney to make a good faith and detailed review of your financial circumstances and to make sure that the bankruptcy petition is completed as accurately as possible.  The willful failure to correctly complete your bankruptcy paperwork may result a dismissal of your case, at best.  At worst, the making of an intentionally false statement, concealing property or obtaining money or property by fraud in connection with a bankruptcy case can result in fines up to $250,000.00, or imprisonment for up to 20 years, or both.

 

The reason the court needs such detailed information is to:

  1. determine if you qualify for bankruptcy;
  2. correctly evaluate how to handle your case;
  3. work through each debt with respect to how creditors will be repaid or discharged; and
  4. avoid difficulties like contested matters and adversary proceedings.

 

In your particular case, there may be issues brought to the court from the trustee, bankruptcy judge, or one of the creditors involved. These issues could be presented either as contested matters or as adversary proceedings. Both will extend the duration of your case and both can cost you more money the longer they are left unresolved.

 

Adversary Procedures

These contests are lawsuits within a bankruptcy case typically brought to the court by creditors who want to have a discharge of a particular debt revoked, denied or otherwise objected to, creditors who are hoping to recover money or property from parties other than the bankruptcy filer, or creditors who wish to stop some other court action related to your case. Although it’s related to your case, an adversary proceeding is a separate and distinct matter.

 

Contested Matters

Contested matters are similar to adversary proceedings, but they are not proceedings that are distinct and separate from your case. Creditors or other parties can bring contested matters in a case by filing a motion that requires the court to make a ruling based on a particular matter. Contested matters are often resolved more quickly than the resolution of adversary proceedings, but they will still extend the duration of your case and you still likely will have to pay your lawyer more money to assist you in resolving them.  The court will usually consider lifting the automatic stay, objecting to a creditor’s proof of claim, or objecting to a proposed chapter 13 repayment plan as contested matters.

 

 

To learn more about adversary procedures, contested matters, and how bankruptcy can provide permanent debt relief in Mankato, MN, and the surrounding region, call Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.

Posted on

Four Main Types of Fraud According to the Bankruptcy Code in Worthington, MN

Like any legal proceeding, bankruptcy is a big step to take in your life, and if you’re considering filing, you should prepare to be completely frank with your bankruptcy attorney about your financial circumstances/problems and you should prepare to collect paperwork that substantiates the assets you own and the debts you owe.  Due diligence and a careful review of your financial troubles and of how those troubles came about are big components that come into play with every case.  Unfortunately, there is a lot of irresponsible advertising misinforming people that bankruptcy is “easy”, “simple” and consists of “just a bunch of forms” that you fill out.  It is important to understand that the papers you complete and file are legal pleadings.  When you sign and file them with the bankruptcy court, you make representations in those pleadings under oath and subject to penalty of perjury.  Many parties rely upon the accuracy of those representations.

 

Even though it’s a big step to take, bankruptcy is undeniably helpful for thousands of households every year. It may be the best choice for your financial wellbeing as it will provide long-term debt relief and stability.  While bankruptcy is nothing to be afraid of, one must have due respect the for the process and certain rules and procedures must be observed and done correctly to get you through it with as little disruption to your life as possible.

 

The two main types of bankruptcy available to individual consumers are Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy. They are each designed to treat debt specific to each filer’s income, types of property, and types of debt.

 

At Behm Law Group, Ltd., we offer services to people seeking to file for Chapter 7, Chapter 12 and 13 bankruptcy relief. Our attorneys can guide you through the process of preparing and filing your case and they can help you understand how to do it correctly in Worthington, MN.

 

No matter what type of bankruptcy chapter you file, you will be required to provide documentation of your financial circumstances and you will have to do certain things, including completing a credit counseling course, before your case is filed. If you work with Behm attorneys, you can be sure your petition will be correctly filed and you will receive hands-on guidance on what to do so that your case is properly prepared.

 

Filing without the help of a trained professional comes with significant risks.  Without the assistance of an attorney, you could fail to list assets, fail to list creditors or engage in other conduct that could be perceived as fraudulent.  The permanent financial benefits of bankruptcy are intended for individuals who are honest and forthright.  It is important to understand that even simple mistakes could be perceived as fraudulent conduct.

 

There are four main ways a filer could commit bankruptcy fraud. Some of those actions could be accidental, but the court could still view them as fraudulent and could dismiss your bankruptcy case. In addition, you could be federally prosecuted for bankruptcy fraud.   The penalties for making a false statement, concealing property, or obtaining money or property by fraud in connection with a bankruptcy case can result in fines of up to $250,000, or imprisonment for up to 20 years, or both.

 

The four most common ways bankruptcy fraud is committed are as follows:

 

  1. The filer might try to bribe a bankruptcy trustee. This is generally the most obvious type of fraudulent behavior but it is also very rare.
  2. The filer might hide property to keep it from being liquidated or included in a case. This is the most common fraudulent action. One may even engage in this type of fraud accidentally if a filer fails to fully understand the asset-listing section of the bankruptcy petition paperwork.
  3. The filer might file fake, inaccurate, or incomplete forms in their petition. Again, this may happen accidentally without the guidance of an attorney during the process of constructing a bankruptcy case. However, even though it may be unintentional, this may be deemed as perjury depending on the circumstances.
  4. The filer might file multiple cases in an unlawful time frame using false information. Filers must wait a minimum of eight years between Chapter 7 cases, and a minimum of two years between Chapter 13 cases.

 

Mistakes and accidents that can be perceived as unintentional fraud are easily avoidable with the expert knowledge and legal counsel of a bankruptcy attorney. Contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com for information on filing and bankruptcy code in Worthington, MN.

Posted on

3 Factors to Consider When Using Bankruptcy for Business Debt Relief

For individual consumers and businesses alike, bankruptcy is always an option that can help restructure, dissolve, and generally treat debts that filers wouldn’t be able to repay. The process of bankruptcy is designed with fairness to both the filers and creditors, but also serves to support economies from local municipalities to the national economic system. At Behm Law Group Ltd., we provide services for Chapter 7, 13, and 12 cases, guiding filers through the complex process of each step in their case and providing legal protection against creditor harassment and abuse. While we primarily work with individuals filing for Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy, we also guide small businesses using bankruptcy for long-term debt relief in Luverne, MN, and the surrounding areas.

 

Chapter 7 bankruptcy is the most commonly filed case for individuals and businesses. It functions to liquidate non-exempt assets in exchange for the permanent discharge of debt. Business owners who file Chapter 7 can have only their business debts or both their business and personal debts handled in the case, depending on how their business is structured and depending whether both the business and they themselves, personally, are contractually liable on the debts.  Sometimes a business will close following the completion of a business chapter 7 case.  Many times, a business will continue operating after a business chapter 7 case has concluded but the business will operate with a lot less debt.  Sole proprietorship businesses can also file for Chapter 13 bankruptcy and have personal and business debts rolled into one case. This chapter works to reorganize debts into a manageable repayment plan lasting three to five years. Business operations can continue during a Chapter 13 case as long as the business finances fit into the case requirements.

 

If you plan to use any type of bankruptcy for business debt relief, it’s important to take these three major factors into consideration:

 

  1. Is your business currently profiting? If your business is still making money, filing for bankruptcy might not be the right choice. For example, if you’re facing a temporary hard time, incurring more debt to help you through the difficult period that you would be able to repay when your business situation is more stable is probably a better choice than bankruptcy. Filing for bankruptcy is the right choice when your business is consistently losing money with no end in sight.
  2. What’s the asset-to-debt ratio? Every business has assets, whether that includes real estate, equipment, or stock holdings. If the value of your assets exceeds the total debt your business owes to its creditors, bankruptcy might not be the best option. Rather, it may behoove you to engage the services of a lawyer to help you construct various non-bankruptcy work-out arrangements with your creditors.
  3. Who is liable for the business debt? If you own a sole proprietorship, you are personally responsible for business debts. In this case, you can use Chapter 13 to restructure both business and personal debts into one manageable three to five year repayment plan, but this may only be effective if you are also struggling with personal finances. If you don’t file for bankruptcy relief and you’re personally responsible for business debts, the business creditors can use legal action to pursue your personal assets.

 

To learn more about bankruptcy and business debt relief in Luverne, MN, and the local region, contact Behm Law Group Ltd. by calling (507) 387-7200 or email stephen@mankatobankruptcy.com.

Posted on

Understanding the Debt Settlement Process of “Mega” Bankruptcies

In the United States, different types of bankruptcy processes are available to a wide range of filers, from individual consumers filing Chapter 7 bankruptcies to large corporations filing complex Chapter 11 cases.

 

At Behm Law Group Ltd., we primarily work with individuals filing for Chapter 7 liquidation or Chapter 13 reorganization bankruptcy, but we also provide filing services and legal protection to local businesses qualifying for either Chapter 7 or Chapter 13, and we provide Chapter 12 bankruptcy services for family farmers and fishers in the southern Minnesota region. Outside of small business and individual bankruptcy, other types of businesses like LLCs, corporations, and partnerships will typically utilize Chapter 11 bankruptcy to handle large debt loads and complex financial situations. While we don’t provide services for Chapter 11 debt settlement in Mankato, MN, and the region, at Behm Law Group Ltd., we still think clients need to understand the role that all types of bankruptcy play in the U.S. economy.

 

One significant segment of the total annual bankruptcy cases filed in the United States is comprised of “mega” bankruptcies. Typically, Chapter 11 “mega” bankruptcy cases address either the debt loads of numerous affiliated and closely intertwined businesses which are consolidated into a single “mega” bankruptcy case or the large-scale debts of a single massive business entity.

 

What Makes a Bankruptcy “Mega?”

To fit into the category of “mega bankruptcy,” a business must have either $1 million or more in debt or have over 1,000 creditors involved. Business entities who file “mega” cases can also have relatively large debt loads that may be under $1 million or have under 1,000 creditors involved, but have a significant degree of public involvement, interest and investment. Some of the most famous mega cases include the bankruptcy cases of Lehman Brothers in 2008 (involving over $691 billion), General Motors in 2009 (involving over $82 billion), and Washington Mutual in 2008 (involving over $327 billion). Many of the recent retail store bankruptcies that have been filed in the United States, including JCPenney, Toys“R”Us, and Sears, have also been handled as mega cases.

 

How are Mega Cases Handled?

Because of the massive sizes of many businesses involved in mega cases, the outcomes of such cases can have rippling economic effects that the majority of other business and individual cases do not. Bankruptcy courts must monitor these potential effects and handle the cases accordingly to eliminate any negative large-scale economic impacts as much as possible. This usually means mega cases are handled with a much higher degree of involvement and scrutiny by bankruptcy court judges. Bankruptcy judges will often employ Omnibus hearings to allow the parties to review and generally “clean up” or “pre-package” a case before allowing it to proceed through the full court process. Omnibus hearings are pre-trial hearings through which the parties to the bankruptcy gather records and financial documents, and then outline the overall situations of the bankruptcy filer and the creditors involved.  Such Omnibus hearings help alleviate the overall administrative stress “mega” bankruptcy cases can place on the court and court staff and provide a more direct and expeditious way to handle the complexities of such cases.

 

To learn more about how our attorneys can help you use bankruptcy for debt settlement in Mankato, MN, contact Behm Law Group Ltd. by calling at (507) 387-7200 or emailing stephen@mankatobankruptcy.com.

Posted on

Filing for Bankruptcy Has Ups and Downs

For those who haven’t been able to meet debt payments on time for several months and suspect they may never be able to fully repay their debts, bankruptcy is always an option. Bankruptcy was designed to support consumers and businesses that can’t repay debts. It’s a failsafe support system that benefits filers, creditors, and the economy overall.

While bankruptcy helps thousands of Americans each year climb out of debt and find long-term financial stability, it’s not just a bailout, and it has its ups and downs just like any other legal process. However, in the majority of cases, the good vastly outweighs the bad. At Behm Law Group, Ltd., we help clients work through the process of filing for bankruptcy in Windom, MN and the local region. In fact, we’re the only law firm in South Central and Southwestern Minnesota that works exclusively with bankruptcy cases.

While the benefits typically outweigh the detriments, it is important to be aware of how bankruptcy can affect you overall.

The Good

Bankruptcy provides direct and permanent debt relief for many types of debts. When you file, the court will also place an immediate automatic stay on your creditors. They will not be able to collect debts or harass you in any way. You will also most likely be able to protect all of your property from liquidation with the many generous bankruptcy exemptions that are allowed in a typical case. You will find that you may have an increase in credit card solicitations/offers and more access to banking opportunities after your case is concluded. Additionally, negative credit marks against you from missed debt payments will be wiped from your credit record. Overall, bankruptcy can give you a completely clean financial state.

The Bad

Filing for bankruptcy can be reflected on your credit profile usually for 5 to 7 years.  Sometimes, after a bankruptcy is concluded, one must wait 2 to 3 years to get approved for a mortgage loan.  Sometimes, one will experience slightly higher interest rates on vehicle loans.  Also, you generally can’t qualify for Chapter 7 liquidation bankruptcy if your income is higher than the state average or median income for a household of your size.  However, this doesn’t mean that you won’t be able to file for Chapter 13 reorganization bankruptcy. Also, some debts, such as student loans, are more difficult to discharge in any kind of bankruptcy and some debts, like most tax debts, child support debts and alimony, are generally not discharged at all. In a Chapter 7 case, you can lose some property if the value of that property exceeds your bankruptcy exemption allowances.  Also, if you have co-signers on a loan, the creditors could pursue them for collection on the debt.  Finally, bankruptcy can be costly when court fees and attorney costs are added together.  While there is no set fee for a bankruptcy case and while the fee one winds up paying depends on how complicated the case is, the typical range is between $1,500.00 and $3,000.00.  However, having to pay an attorney $1,500.00 to $3,000.00 is generally preferable to having to continue paying on thousands of dollars of credit card debt, medical debt and other debts.

If you’re unsure whether filing for bankruptcy in Windom, MN and the surrounding communities is the right choice for your financial situation, contact Behm Law Group, Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com today. Our attorneys can help determine which type of bankruptcy you qualify for and whether filing bankruptcy is even in your best interests.

 

Posted on

Basics of Each Different Bankruptcy Chapter

At Behm Law Group, Ltd., we provide comprehensive legal guidance and protection for individual consumers filing for Chapter 7 or Chapter 13 bankruptcy, and for family farmers and fishers filing for Chapter 12 bankruptcy. If you’re considering filing for bankruptcy, our attorneys can help you determine which chapter will be the most effective for handling your current financial circumstances.

 

Each chapter is designed to help individuals in many different situations get out of debt that they wouldn’t have otherwise been able to repay. While we work with only those three chapters (7, 12, and 13) of bankruptcy in Mankato, MN and the surrounding area, there are other types of bankruptcy available to individuals and businesses.

 

The six general bankruptcy chapters in U.S. bankruptcy law include:

 

  • Chapter 7: Available to individuals and businesses alike, Chapter 7 bankruptcy is the most commonly filed chapter. It works to liquidate or sell the filer’s non-exempt assets, distribute the proceeds among the filer’s creditors, and discharge the majority of the filer’s debts. Chapter 7 is also called liquidation or straight bankruptcy. The bankruptcy exemptions under Minnesota state law and the bankruptcy code that are used to protect one’s property are very generous, however.  In the vast majority of cases, no property is liquidated or sold at all and all that one loses are one’s debts.
  • Chapter 9: This bankruptcy chapter is an option only available to municipalities such as cities, school districts, or counties. In 2013, Detroit, MI used Chapter 9 to file the largest municipal bankruptcy case in U.S. history, with debt load estimated at $18 to $20 billion. The process of Chapter 9 bankruptcy works to protect the filer from creditors while the filer restructures their debts to much more favorable repayment terms.
  • Chapter 11: Like Chapter 9, Chapter 11 also protects the filer from creditors as they reorganize their debts. Chapter 11 is a process only offered to businesses that are not sole proprietorships and individuals, such as doctors, lawyers, famous actors, corporate CEOs, etc. who have total debts that exceed the debt limitations of Chapter 12 and Chapter 13 bankruptcy or who have incomes that far exceed the state median/average income for a household of their similar size. The goal of Chapter 11 is to help a business or an individual restructure their debts under more favorable repayment terms in a Chapter 11 repayment plan while they maintain operations. Some of the most recent large Chapter 11 cases include J.C. Penny, Hertz, and Neiman Marcus.
  • Chapter 12: For filers that generate the majority of their annual income from family owned farming or fishing operations, Chapter 12 is a debt restructuring option. The restructured debts are put into a Chapter 12 plan lasting three to five years. This chapter is reserved for family farmers and fishers largely because their income is received seasonally.
  • Chapter 13: The second most common individual consumer chapter filed is Chapter 13. This process works to restructure the filer’s debts into a manageable repayment plan that lasts a three to five-years. Some secured creditors (creditors with collateral or security such as vehicle lenders) are paid in full under more favorable repayment terms and some unsecured creditors (creditors who don’t have security or collateral such as credit card debts, medical debts, etc.) are repaid only partially with no interest and have their claims completely discharged. Chapter 13 is also called reorganization, restructuring, debt repayment, or wage-earner bankruptcy.
  • Chapter 15: Finally, Chapter 15 bankruptcy is relatively rare, but still necessary. Added to the bankruptcy code in 2005, Chapter 15 bankruptcy handles filers with foreign debts and/or foreign assets. Chapter 15 overall works to negotiate a case with foreign courts and foreign bankruptcy/insolvency laws.

 

To learn more about our work with Chapter 7, 12 and 13 bankruptcies in Mankato, MN and the local region, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Posted on

Refinancing with Today’s Low Mortgage Rates Might Offer Debt Relief

In the midst of a global pandemic and a rocky political climate, there’s so much negative news that we are exposed to every day. However, one of the positives of the end of 2020 and the beginning of 2021 is that mortgage interest rates are extremely low, and the housing market is booming. If you’re a homeowner, you know how much pressure there is to meet monthly mortgage payments along with all of your other pressing financial obligations. For homeowners struggling to meet mortgage payments or other debt requirements, taking advantage of favorable current mortgage interest rates by refinancing your home mortgage may be the ticket to staying out of bankruptcy. If you are considering filing for bankruptcy relief during this uncertain time, Behm Law Group Ltd. can help you navigate the legal process and receive long-term, effective debt relief in Marshall, MN, and the surrounding area.

 

Those who have steady incomes but are finding it difficult to meet their monthly financial requirements may be considering Chapter 13 bankruptcy to reorganize their debts into a manageable repayment plan.  Homeowners with steady incomes are also most likely to benefit from refinancing their home mortgages. A refinance with current interest rates could save homeowners several hundreds of dollars with each payment. The resulting savings could be significant enough such that the money saved could effectively be put into paying off several other debts that might otherwise force a homeowner into filing for bankruptcy relief.

 

Approximate Mankato mortgage rates as of November 2020 for a $250,000 loan

Loan type Rate Points APR Monthly payment
15-year fixed loan 2.1% 0.56 2.4% $1,300
20-year fixed loan 2.5% 0.84 2.7% $1,060
30-year fixed loan 2.6% 0.75 2.8% $800
5/1 ARM variable loan 2.4% 0.89 2.7% $780
7/1 ARM variable loan 2.5% 0.76 2.7% $790
10/1 ARM variable loan 2.6% 0.76 2.8% $800

 

For a conventional loan, refinancing may cost around $3,000 to $4,000, but that cost would be wrapped into your refinanced mortgage, so it won’t typically impact the amount of cash you have on hand at the time of the refinance. The only common factors that might prevent qualification are a low FICO score due to missed mortgage payments, too many debts, other than your mortgage, with high balances or low self-employment income from this year.

 

While saving $100 to $300 a month on a refinanced mortgage might not seem like a large amount, it’s a significant enough of an amount that many homeowners may use to repay other debts and financial obligations that they might not otherwise be able to pay. Those minor monthly adjustments can be key in preventing the stress and budget shortfalls that can lead one into having to file for Chapter 13 bankruptcy relief.

 

Chapter 13 or Chapter 7 bankruptcy can be highly helpful options for those struggling financially who are unable to refinance their mortgages and are unable to make other helpful budgetary adjustments. To learn more about finding debt relief through bankruptcy in Marshall, MN, and the surrounding region, contact Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.

 

Posted on

Different Types of Bankruptcy in Redwood Falls, MN

Because the current time is full of uncertainties, any growing financial worries can add a tremendous amount of stress on a household. Whether you’re an individual, a family breadwinner, or a business owner, you can rest assured that when worst comes to worst, you will always have the option to file for bankruptcy if your financial circumstances call for it. Bankruptcy often gets a negative image cast over it, but the truth is that it’s a system designed to protect debtors, creditors, and the economic system overall with fair and just treatment to every party involved. If you are finding it impossible, or even just difficult, to meet debt payments each month, you can join thousands of other U.S. citizens who filed for bankruptcy and received permanent debt relief. With the help of Behm Law Group Ltd., you can build a strong case for Chapter 13 or Chapter 7 or Chapter 12 bankruptcy in Redwood Falls, MN, and start down your own road to a debt-free life.

At Behm Law Group, we work with individuals or joint-filing spouses going through Chapter 7 or Chapter 13 bankruptcies. We also work with Minnesota family farmers and fishers to help them file for Chapter 12 relief. The different chapters/types of bankruptcy outlined in the code include:

  • Chapter 7: This process is for individuals or businesses of any size. It works to liquidate non-exempt assets in exchange for the discharge of debts. With most individual cases, the exemptions provided by the bankruptcy code protect one’s property from liquidation and all one loses are one’s debts.
  • Chapter 13: This bankruptcy is primarily for individuals, but sole proprietorship businesses can file by combining personal and business debts into one case. This process works to reorganize debts into a manageable repayment plan lasting three to five years that is tailored to one’s monthly income and reasonable and necessary monthly living expenses.
  • Chapter 12: This works like Chapter 13, but it is exclusively designed for family farmers and fishers who derive 50% of their yearly income from their farming/fishing operations.
  • Chapter 11: This is another reorganization bankruptcy, but it’s typically available to very large businesses that aren’t sole proprietorships or partnerships and to individuals who have a lot of property and have more than $419,275 of unsecured debts and more than $1,257,850 of secured debts. Chapter 11 typically costs more, takes longer, and involves more debts than the other reorganization bankruptcies.
  • Chapter 9: This bankruptcy process is for cities, towns, and other municipalities. The process protects the filing municipality from its creditors while a debt reorganization plan is drafted.
  • Chapter 15: This chapter applies to bankruptcies that cause cross-border insolvencies and is used when a filer has debts in the United States and in another country.

This is a brief explanation of the general chapters in the U.S. bankruptcy code. To learn more about bankruptcy law or to file for bankruptcy relief in Redwood Falls, MN, today, call Behm Law Group Ltd. at (507) 387-7200 or email at stephen@mankatobankruptcy.com.

Posted on

Understanding the Elements of a Chapter 13 Bankruptcy Repayment Plan

If you are in a difficult financial situation that will benefit greatly from a bankruptcy case, you have two primary potential options as an individual consumer. Depending on your financial circumstances, you can either file for Chapter 7 or Chapter 13 bankruptcy. For those with a debt-to-income ratios higher than the state median or average income of a similar household, Chapter 7 bankruptcy is not an option. If you don’t qualify for Chapter 7 based on your income, you may find your situation is better suited to filing for Chapter 13 bankruptcy. Those considering filing for Chapter 13 bankruptcy in Owatonna, MN, can put together a strong case with the legal protection and guidance of a Behm Law Group Ltd. attorney.

 

Chapter 13 bankruptcy works to restructure your debts into a repayment plan with monthly payments suited to your current income. This plan will last three to five years, depending on your income level. During this time, any material changes in your monthly income and monthly living expenses will be reflected by slight adjustments to your repayment plan. Because the filer and filer’s attorney must work together to create a repayment plan proposal to submit to the trustee, you should make a point of understanding the basic components of a typical Chapter 13 repayment plan.

 

Included in your plan:

  1. Bankruptcy and administrative fees, including your filing fee, trustee’s fee of 3%-10% of each monthly payment, and attorney fees. You will pay 100% of these fees in your plan.
  2. Priority debts, including child support, most tax debts, criminal fines and penalties, alimony, wages owed to people you may have employed, and others. You will pay 100% of these debts in your plan but these debts will not be paid interest.
  3. Secured debts, including mortgages, car loans, and any other debts tied to real estate and items of personal property. You will pay most of these debts in your plan under different/adjusted terms that are more compatible with your regular monthly income and your regular reasonable and necessary monthly living expenses.
  4. Unsecured debts, including credit card debts, medical bills, and any other debts not tied to a property or protected with a lien. You will pay only a percentage of these debts.  Generally, these debts will not be paid in full and they will not be paid interest.  The amount you’ll repay depends on your disposable income (remaining monthly income after your reasonable and necessary monthly living expenses are paid) that will be paid monthly in the repayment plan and on how many months your plan will last.

 

You now are aware of the basic components of a typical Chapter 13 bankruptcy repayment plan. With the help of a skilled bankruptcy attorney, you can easily craft a reasonable repayment plan proposal that fits your current monthly income and other financial circumstances and restrictions.

 

To learn about other, more complex components of a chapter 13 repayment plan or to file for Chapter 13 bankruptcy in Owatonna, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.