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.

 

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.

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.

 

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.

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.

 

 

 

Industries Most Likely to File Commercial Bankruptcy Due to COVID-19

Today’s economic and social circumstances are continuing to be unpredictable and unstable. Unfortunately for investors and business owners, this can mean dramatic variations in the economy. With coronavirus infections still spiking and most businesses having operations limited in some way, a wide range of industries are struggling to stay afloat.

If you’re a business owner in this climate or even if you’re an individual having a hard time with current finances, Behm Law Group, Ltd. can provide expert legal advice and protection to help you resolve debts by filing for bankruptcy in Fairmont, MN and the surrounding area.

Our skilled attorneys work with clients filing for personal bankruptcy including Chapter 7, 12, and 13, in addition to sole proprietorship or partnership-owned business bankruptcies. We expect to see an increase in small business bankruptcy cases throughout many industries, but some industries may be impacted much more than others.

Some of the hardest hit industries include:

 

Theaters, both film and stage, will most likely still be avoided by many customers after they open. With the severe impact of the initial shutdowns already forcing theaters into dangerous territory, the continued decrease of attendance doesn’t bode well for the future.

Restaurants will also find the coming terrain difficult. Dine-in services are still unavailable in many U.S. regions, and take-out consumption has been greatly reduced. Locally owned restaurants, cafes, and other small food service providers will find it hard to move forward successfully.

Boutique stores and gift shops will suffer as well, unless they can provide curbside and shipping services that are accessible to their customer base.

Gyms, spas, and other similar health centers are also in danger of failure due to decreased consumer interest. Since the pandemic hit, health-conscious individuals have been more likely to find at-home workout routines and self-care solutions.

Sports arenas, local or otherwise, may not open for some months. When they do, attendance is expected to be low, and many sports centers and arenas will suffer financially because of this.

Amusement parks and entertainment centers will see a similar decrease in attendance when they re-open. If the infection rates and exposure in the U.S. don’t change by the next summer season, many parks may be forced to close.

 

These industries are just the tip of the iceberg when it comes to decreases in consumer spending and participation. The avoidance of these often public, busy commercial operations is already showing effects in current sharp economic declines.

 

If you own a business suffering from COVID-19 shutdowns, Behm Law Group, Ltd. can help you alleviate your debts and work with you through a bankruptcy case. Contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com to file for bankruptcy in Fairmont, MN.

Potential Covid-19 Student Loan Relief Act of 2020 and Debt Relief through Bankruptcy

Tuitions in the United States are higher than ever before, and individuals who graduated within the last ten years are facing large amounts of student loan debt. For those already struggling with additional debts, student loans with high interest rates can push some people to the point of needing debt relief. With the additional financial stresses of the current pandemic times, many people are turning to bankruptcy as a source of government-regulated debt relief. At Behm Law Group Ltd., we can help you find long-term financial stability and debt relief in Redwood Falls, MN, and the surrounding area by filing for bankruptcy.

 

While student loans are typically exempted under 11 U.S.C. § 523(a)(8) from the general discharge awarded at the end of the bankruptcy process, with some rare exceptions, there may be some changes as to how student debt is treated in bankruptcy due to a potential Covid-19 relief act.

 

The many lingering effects, both medical and financial, of the peak of the coronavirus pandemic and subsequent shutdowns are still being recognized and processed by the U.S. government, and acts like the potential Covid-19 Student Loan Relief Act might be put in place until national health and economic conditions are more stable. The initial CARES Act of March 2020 put many other benefits into place, including stimulus checks and additional federal unemployment, but now that much of that first act is coming to a close, new legislation will likely be enacted to continue addressing the severe economic effects of the pandemic.

 

For now, those with federal or private student loans looking for debt relief through bankruptcy may be able to have those loans discharged depending in a few specific circumstances. Primarily, discharge of student loans in bankruptcy is only available to filers who have been directly economically affected by the coronavirus shutdown. This means:

 

Your income was significantly reduced because of Covid-19. This reduction must be a certain percentage, depending on your prior income. Qualifying reductions of income include:

  • 20% reduction for those earning $75,000 or less;
  • 30% reduction for those earning $75,000 to $125,000;
  • 40% reduction for those earning $125,000 or more.

Your household’s primary income earner passed away during the pandemic shutdowns. The timeline for the period this rule covers will be outlined more specifically in the legislation’s details.

You were permanently disabled during the shutdown/pandemic. Again, the timeline will have more specifics for qualifying dates in the legislation’s details.

 

While the requirements of the potential Covid-19 Student Loan Relief Act are highly limiting, the legislation could open the door for many more people struggling financially to benefit from student loan discharge in addition to the discharge of the other usual debts included in a bankruptcy.

 

To learn more about how the new stimulus legislation might affect your bankruptcy case, more about qualifying for student loan discharge, or more about how filing for bankruptcy can be an effective source of debt relief in Redwood Falls, MN, and the surrounding area, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

Litigation That Can Move from State Court to Bankruptcy Court

Working through the U.S. legal system is often a complex process, and no matter what type of case you’re handling, it’s likely that details will vary greatly from other similar cases. For example, if you’re working through a state court case that involves litigation and one of the parties in the case files for bankruptcy relief, certain aspects of the litigation may be moved to bankruptcy court.

 

When this sort of thing happens, it’s essential to have the expertise of a bankruptcy attorney on your side. Whether you’re involved in state court litigation or not, Behm Law Group, Ltd. attorneys can guide you through the process of filing for bankruptcy relief in Jackson, MN.

 

Filing for bankruptcy is a nuanced process, and moving civil litigation from state court to bankruptcy court can make the bankruptcy process even more complicated. There are several types of litigation that may result in the removal of a case from state court to bankruptcy court. All litigation that involves the payment from one party to another will impact a bankruptcy case because the litigation may piecemeal or dilute resources that would otherwise have been used to repay creditors in a bankruptcy. For example:

 

Fraud: A common example of a fraud litigation that may be moved to bankruptcy court is when a creditor files suit against a debtor and claims the debtor misrepresented one’s financial standing in a repayment contract. The bankruptcy court needs to determine if the debt would be discharged in a bankruptcy outside of the litigation case. If the bankruptcy court determines that fraud has been committed, the bankruptcy court could decide that the debt is not dischargeable which could change the value paid to all creditors in the bankruptcy estate.

Personal injury: In personal injury litigation, the offender may need to make monetary restitution to the victim or the victim’s family. If the offender also files for bankruptcy relief, the money that could be used to pay the victim in the personal injury litigation could be used to pay other creditors as well through the debtor’s bankruptcy estate. This means there could be less money to repay the personal injury creditor.

Business: The movement of business litigation to bankruptcy court occurs most commonly when shareholders of a company file a lawsuit against that company for negligently or intentionally causing their stock to lose value due to ineffective or incompetent business decisions or outright corruption. If the company then files for bankruptcy relief, the shareholders will likely request that the litigation case be moved to the bankruptcy court to save money. If the case is handled in bankruptcy court, the process would likely be less costly for the parties.

 

The results of moving litigation from state court to bankruptcy court can be highly varied depending on the circumstances and timeline of any particular case. If you are considering filing for bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com to learn more about the process.

Case Dismissal without Prejudice and How Bankruptcy Assistance Can Help

If you are working through a difficult financial time, you are not alone. The results of the Covid-19 pandemic and associated economic hardships are impacting millions of individuals and businesses across the United States. Through the process of filing for bankruptcy, debt relief and financial stability are all possible for people who are struggling to pay their bills.

 

Filing for bankruptcy may seem like a tough choice, but it’s a much more common occurrence than you might think. In fact, bankruptcy is a legal process that aids many individuals and businesses in need of positive debt relief and financial rehabilitation. If you take the step to file for bankruptcy relief, Behm Law Group Ltd. can provide you with bankruptcy assistance in St. Peter, MN, and the surrounding area. Our attorneys’ expert legal support can help you work through a case and limit the risk of having your bankruptcy case dismissed with or without prejudice.

 

To eliminate the potential for abuse of the bankruptcy system, the U.S. Bankruptcy Court system has strict requirements for filers. Bankruptcy petitions involve extensive documentation of your financial situation and rigorous paperwork on top of pre-bankruptcy requirements. The guidance and support of a Behm attorney can help you navigate through the very nuanced bankruptcy filing process and prevent the possibility of case dismissal.

 

If there is intentional fraud or other such issues with your case, the court could dismiss your bankruptcy case with prejudice, and this ruling comes with its own significant restrictions on being permitted to file for bankruptcy relief again and the potential of criminal prosecution. However, even if there is no intentional fraudulent behavior or abuse of the bankruptcy system involved in your case, there is still the possibility of that your case could be dismissed without prejudice. Dismissal without prejudice is highly improbable with the expertise and legal aid of an experienced lawyer. If you choose to file without the support of an attorney, you will have a greater chance for dismissal of your bankruptcy case without prejudice.

 

In fact, dismissal without prejudice can occur if you:

 

  1. Do not file the correct bankruptcy forms or fail to fill out a form accurately
  2. Do not submit full documentation of your financial standing that supports your bankruptcy paperwork
  3. Do not perform all pre-bankruptcy requirements, including the attendance of a credit counseling course with an approved credit counseling agency
  4. Do not attend the 341 hearing
  5. Do not make monthly payments to your trustee in the event you file a Chapter 13 case and have a repayment plan approved and put into motion for a three- to five-year period
  6. Fail to meet any additional deadlines or paperwork requirements that may be specific to your case

 

If the court dismisses your case without prejudice, you can file again right away with corrections made and other failures remedied. However, if you file again right away, the automatic stay placed on your creditors’ ability to collect debts is limited to 30 days. Also, if you have two or more cases dismissed within the past year, you will receive no automatic stay protection when you file again.

 

To learn more about receiving bankruptcy assistance in St. Peter, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

How Bankruptcy Is a Stigmatized Source of Debt Relief and Why That Assumption is Wrong

Anyone who has struggled financially knows the unfortunate potential of feeling ashamed. While the stigma against poverty and debt isn’t unique to the U.S., it certainly is made worse by our social standards and consumer society. The negative assumptions around debt are a centuries-old standard that will take a change in mindset to reverse. If you have assumptions about debtors and bankruptcy, you’re one of many, but those ideas are not necessarily based on any facts.

 

Rather than being a last-gasp chance for “destitute people” or something that throws your credit into the trash forever, bankruptcy is a highly effective process that provides long-term debt relief, financial stability, and a second chance to thousands of individuals every year. At Behm Law Group, Ltd., we provide advice and protection to our clients, guiding them through the bankruptcy process and helping them receive much needed debt relief in Worthington, MN and the surrounding area.

 

A large part of the stigma against bankruptcy is based on an old idea of tying morality to money and social status. This is an unfortunate mark of the classist history that has saturated the western world for centuries. The idea of “poor” people having low morals is an outdated, problematic one that needs to be left behind along with stigmas against race, gender, and other marks of oppression.

 

The problems of social stigma aside, bankruptcy itself is often seen as the wrong choice because of the impact it has on the filer’s credit. While it’s true bankruptcy will lower your credit score and make you ineligible for certain things like taking out a mortgage, those effects are temporary, and the permanent positive impacts of bankruptcy greatly outweigh the temporary negatives. The assumption that bankruptcy is a bad choice because of any impact it might have on your financial standing is a flawed idea. To see how beneficial bankruptcy is for anyone in the right situation, you only have to look at the number of people who went on to improve their quality of life and maintain a balanced income-to-debt ratio after filing.

 

Those who are in the position to file for bankruptcy are often not able to take out a mortgage in the first place, and it’s likely that their credit score has already been lowered to some degree because of their current income-to-debt ratio, late payments, defaults on loans, and other conditions that lead them to qualify for bankruptcy.

 

Finally, filing for bankruptcy is almost always the better option for debtors than other debt management practices. Debt consolidation, payday loans, debt settlement, and other non-bankruptcy options for debt relief are frequently used to take advantage of people and end up costing them much more in the long run. Bankruptcy is a law-based process that is designed to serve an honest filer’s best interests.

 

To learn more about how bankruptcy debt relief in Worthington, MN is worth it and why the stigma is wrong, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.