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Understanding Co-debtor Roles in Bankruptcy

When an individual is in a financial situation ripe to be resolved with a bankruptcy case, it’s likely they have a lot of debt they can’t repay and may even have one or more co-debtors. Debt accumulation over time usually shows a bread crumb trail of having to take on more debt to cover debts already owed. For instance, many debtors open new lines of credit to pay off an auto loan or a mortgage, and that tends to snowball into more credit card debt with interest rates quickly increasing the amount owed.

If your debt has become overwhelming, Behm Law Group, Ltd. can guide and protect you throughout the process of individual consumer bankruptcy in St. Peter, MN.

Bankruptcy can be a complex legal process, and it can be very different from case to case. The bankruptcy code has many specific rules that may or may not apply depending on individual financial circumstances. One example of this is the co-debtor role and the laws that apply to this in a bankruptcy case.

 

What Happens in Bankruptcy

There are two exactly opposite things that happen to a co-debtor depending on which chapter you file. In Chapter 7, you may have the debt discharged, but the co-debtor will still be responsible for repaying the full debt. However, in Chapter 13, you assume responsibility for the debt in a three- to five-year repayment plan, and thus your co-debtor may only be partially obligated on it.   For instance, if you have a $5,000.00 Discover credit card debt and only $3,000.00 of it is paid through your chapter 13 plan, the co-debtor would be liable to pay the remaining $2,000.00.

 

Who Is a Co-debtor?

Any person that has legally agreed to pay the debt owed in the event that you can’t repay it is a co-debtor. Co-debtors include:

    • Spouse: Even if your spouse is not filing for joint bankruptcy with you, they can be responsible for the debt if they signed the lending paperwork. Common examples of this are mortgages, credit cards, and car loans.

 

    • Co-signer: If your relative, friend, or other individual co-signs a loan, rental, or other borrowed value with you, they become your co-debtor if you default on repaying that debt. This commonly happens if you don’t have sufficient credit or a lengthy borrowing history to take out a loan, rent a property, or open an account.

 

    • Personal Guarantor: If you provided a personal guarantee to a lender on behalf of a small business or a start-up, you are considered a co-debtor for the loan that the business receives. If the business files for bankruptcy, you may still be liable for that debt.

 

  • Community Property State Resident: If you and your spouse lived in a community property state in the eight years prior to filing for bankruptcy, your spouse is your co-debtor even if they don’t file a joint petition. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

 

To learn more about your co-debtor’s roles or to start filing for bankruptcy in St. Peter, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

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How a Bankruptcy Insider Affects Debt Relief

Bankruptcy is a legal process that provides debt relief to thousands of individuals and businesses across the United States. If you’re struggling to meet debt payments each month and you feel like your quality of life is significantly affected by this, it may be beneficial for you to consider filing for bankruptcy. Not only does bankruptcy discharge common debts like credit cards and medical bills, it also addresses debts that are tied to properties, including mortgages and car loans. This means some of the most common debt types in America are resolved with a bankruptcy case. If you want to receive debt relief in Redwood Falls, MN, through bankruptcy, Behm Law Group Ltd. can guide you through the system, help you build a strong case, and protect you in the nuanced system of bankruptcy.

 

For the typical individual consumer, there are two types of bankruptcy that can provide debt relief in different ways: Chapter 7 or Chapter 13.

 

Chapter 7 is more suited to people with low incomes who will not be able to repay their debts. It works to liquidate non-exempt assets in exchange for discharge of one’s debts. For example, the trustee administering your case may sell a snowmobile that you may not be able to protect with your bankruptcy exemptions and pay that value to your unsecured creditors.  This is the exception, however, rather than the rule.  However, the bankruptcy exemptions are quite generous.  In the vast majority of chapter 7 cases, one’s bankruptcy exemptions will be sufficient to protect all of one’s assets.

 

Chapter 13 is best for those who don’t want non-exempt assets liquidated and have a steady, stable income. This filing works to restructure or reorganize the filer’s debts into a three- to five-year long repayment plan. Secured debts (debts tied to a property) will be repaid over that time but they are usually repaid under adjusted terms that are more favorable than the original loan terms.  Unsecured debts will be paid only a percentage of what they were owed before the bankruptcy case was filed.

 

When you file for bankruptcy, people and agencies considered “bankruptcy insiders” are taken into account and may affect your case. Bankruptcy insiders include relatives, friends, partners, partner’s relatives, or a company in which the filer has some control/involvement, or business individuals such as directors, business partners, or other business individuals who have a special or close relationship the filer in some way.

 

The court considers bankruptcy insiders in the determination of preferential payments and fraud. For example, if the debtor owed his or her mother $1,000.00 and paid the mother off within one year before he or she filed for bankruptcy relief, the bankruptcy trustee administering the bankruptcy case could demand that the mother pay the $1,000.00 back to the trustee.  The trustee would then divide that $1,000.00 among all of the debtor’s unsecured creditors.  Additionally, if the filer sold some property at below market value to the insider before filing, the entire transaction could be undone or reversed by the bankruptcy trustee.  For instance, if a filer sold a vehicle that was worth $10,000.00 to his or her mother for $1,000.00, the bankruptcy trustee could undo or reverse the transaction because fair value was not given for the vehicle.  The trustee could demand that the vehicle be turned over.  The trustee could then sell the vehicle for fair market value.  The trustee would then divide up the sale proceeds among the filer’s unsecured creditors.

 

To start your bankruptcy process today and receive debt relief in Redwood Falls, MN, or to learn more about bankruptcy insiders, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

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Why the 180-Day Inheritance Rule in Chapter 7 Bankruptcy Exists

One common misconception about bankruptcy is the idea that it will leave the filer with little to their name and damage their credit beyond repair. In reality, bankruptcy is an extremely helpful process for ridding individuals and businesses of debts they would otherwise not be able to repay.

 

Bankruptcy is a legal process administered through the bankruptcy court system. While bankruptcy does affect the filer’s credit and some could lose certain non-exempt properties in liquidation-type bankruptcies, the overall benefits can greatly outweigh the negatives. If you are considering filing for Chapter 13 or Chapter 7 bankruptcy in Jackson, MN, Behm Law Group, Ltd. can help you build a strong, successful case.

 

If you qualify for Chapter 7 bankruptcy by passing the Minnesota Means Test, you will have the majority of your debts discharged. The majority of common debts like credit card debt, medical bills, mortgages, and car loans are discharged in Chapter 7. When it comes to unsecured debts (debts not tied to a property/collateral), the discharge has no side effects. On the other hand, the discharge of secured debts may mean you’ll lose the property tied to that debt in the liquidation process if there is no equity or value in excess of the debt against the property that you can assert an exemption claim to. Exemptions protect important properties like your home, vehicle, furniture, etc.

 

Some properties that are only established as a money value, such as your retirement fund, trust fund, or an inheritance, may also be subject to the liquidation process, though there are generous exemptions for tax qualified retirement accounts such as an IRA, 401(k), 403(b), etc.  For inheritances in particular, such as those received through a will or a life insurance policy, there are special rules in place to prevent bankruptcy abuse and maximize the potential benefit/return to one’s creditors:

 

  • If your relative is still alive, your inheritance is safe from the liquidation process because you don’t own it yet.
  • If you received your inheritance more than 180 days after the date you filed your petition – meaning your relative passed away more than 180 days after the date you filed your case – it’s not considered part of your estate and it will be safe from liquidation.
  • If you receive your inheritance within 180 days of filing for bankruptcy (specifically, your relative passed away within 180 days after you filed your bankruptcy case), your case may be amended, and any inheritance could be at risk of being liquidated.  If you cannot use your available bankruptcy exemptions to protect some of the inheritance, whatever amount is not exempted will be liquidated by the bankruptcy trustee and paid over to your creditors.

 

This 180-day inheritance rule was established to prevent debtors from filing for bankruptcy to rid themselves of debt with the knowledge that they will soon receive a large sum from the death of a family member. Filing for Chapter 7 bankruptcy with that knowledge shows that you wanted a way around repaying your debts honestly with the money gained from your inheritance.

 

To learn more about inheritances or other assets and what happens to them when you file for Chapter 7 bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or via email at stephen@mankatobankruptcy.com.

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Understanding Proof of Claim in Bankruptcy as a Filer or Creditor

Whether you’re a debtor filing a bankruptcy petition or a lender involved in a bankruptcy case as a creditor, you have certain responsibilities. Bankruptcy is a highly complex legal process that requires comprehensive paperwork from all parties involved. If you’re considering filing for bankruptcy relief, Behm Law Group, Ltd. can help you put together a strong petition that provides long-term debt relief from Chapter 7, 13, or 12.

 

As a debtor, bankruptcy can be key in resolving debts in an effective way, and as a creditor, it means you’ll see a return of what’s owed when that might not otherwise be the case. Creditors involved in a bankruptcy in New Ulm, MN are responsible for filing a proof of claim if they want to receive any return on the debt the filer owes.

 

A proof of claim is a key part of the bankruptcy process. All creditors, unsecured or secured, must file the correct paperwork that shows proof of their claim on the debt in order to be paid from the bankruptcy case. Creditors are paid from the liquidation of the filer’s non-exempt assets in a Chapter 7 case, and in both Chapter 13 and 12 cases, that money comes from the filer through payments made pursuant to a repayment plan.

 

Occasionally, creditors won’t be required to fill out a proof of claim form if the filer has a no-asset Chapter 7 case. This means there’s no money in the bankruptcy estate, and none of the creditors involved will receive a return on the debts owed.

 

Proofs of claim must be filed within 70 days of the date the petition was filed for non-government creditors. Government creditors have 180 days to file their proof of claim paperwork.

 

Formal proofs of claim include the name and case number of the filer, creditor information and mailing address, amount owed to the creditor, the basis of the claim, and whether the debt is secured or unsecured. Supporting documentation from the creditor’s records is also required.

 

In some cases, another party of interest (person or entity that might gain or lose from the case) can object to a creditor’s proof of claim. Reasons a claim may be objected to include inaccuracies such as an incorrect amount listing, the wrong type of debt is listed, the supporting documents were not included, or the interest is listed incorrectly.

 

If you’re considering filing for bankruptcy in New Ulm, MN, Behm Law Group, Ltd. can help. Contact us today at (507) 387-7200 or via email at stephen@mankatobankruptcy.com for more information.

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Reopening Your Case with the Help of a Bankruptcy Attorney in Mankato, MN

If you recently filed a bankruptcy case and before you could receive a discharge or reorganization of your debts, your case was dismissed, don’t give up yet. There may be a chance you can reopen your case and successfully file for bankruptcy. Because there are many reasons why your bankruptcy case might be closed before it affects any of your debts, it’s highly advantageous to have the help and protection of a certified legal professional from the start. Whether you’ve filed and had your case closed or you are just considering bankruptcy as an option, Behm Law Group Ltd. can provide the guidance and advice you need from an expert bankruptcy attorney in Mankato, MN.

 

Cases are often closed due to an issue in the pre-bankruptcy requirements or in the paperwork you completed. Bankruptcy paperwork can be complex, and the pre-bankruptcy requirements are mandatory and can be rigorous. That’s why a case closure is frequently due to a failure to satisfy a court requirement.

 

Failure to:

  1. List an asset: If you neglected (accidentally or otherwise) to list an asset/property on the initial documents you are required to complete in your bankruptcy case, your case can be dismissed. However, if your case is originally dismissed due to your lack of accurate asset listing, you can reopen your case with the corrected paperwork. The guidance of a bankruptcy attorney is often key in filling out bankruptcy documents regarding assets.
  2. List a creditor: Even if a creditor will not be involved in the bankruptcy process in any way, you are required to list all the parties to whom you owe money. This includes lending companies, landlords, the court system, the government, and even friends and family. If you fail to list a creditor, chances are you can reopen your case with adjusted documents and direction from a bankruptcy attorney about the details of your creditors.
  3. Complete credit counseling: Every filer has to attend court-approved credit counseling sessions within 180 days before submitting a bankruptcy petition. Without the advice of a bankruptcy attorney, it can be difficult to find an approved counseling provider or to understand when a provider might take advantage of your situation. If your case was dismissed because you failed to complete credit counseling, you can reopen your case if you prove you’ve satisfied that pre-bankruptcy requirement.

 

To reopen you case, you simply have to correct anything you failed to do and submit an application that explains why you want to reopen your case. With that application, you also need to submit documentation that proves you have remedied any failures in the original submission. To learn more about reopening a case and why the help of a bankruptcy attorney in Mankato, MN, is important, contact Behm Law Group Ltd. at (507) 387-7200 or via email at stephen@mankatobankruptcy.com today.

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Overview of Some Bankruptcy Statistics since 2005

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) became law in response to the rapid spike in individual consumer bankruptcies. The difficult economy of the early 2000s pushed many people into serious debt, and filing for bankruptcy was the best option available to them for long-term debt relief. However, it also created a situation in which bankruptcy fraud became more prevalent. To counteract this, the BAPCPA was passed, but since then, a lot has changed in the U.S. economy. If you’re considering filing for bankruptcy relief in Marshall, MN, Behm Law Group Ltd. can help you navigate the BAPCPA and other bankruptcy laws to build a strong, successful Chapter 7, Chapter 12, or Chapter 13 case.

 

After the BAPCPA was passed in 2005, the bankruptcy numbers changed dramatically. There was a decline in the number of Chapter 7 cases filed because the act created more strict requirements to qualify for Chapter 7 bankruptcy relief. From 2005 to 2017, 12.8 million consumer bankruptcies were filed, with an average of 68% Chapter 7 cases and 32% Chapter 13 cases. Even with the passage of the BAPCPA, the ratio of Chapter 7 to Chapter 13 is still high.

 

In 2008, the crashed economy sent more people into bankruptcy, and by 2010, the United States saw the highest filing of bankruptcy cases since before the passage of the BAPCPA. The total number of consumer bankruptcies filed in 2010 was 1,538,033 with 1,105,534 Chapter 7 cases and 430,583 Chapter 13 cases. By 2017, as the economy stabilized, the total of consumer bankruptcies was 767,721 with 61.50% Chapter 7 cases and 38.36% Chapter 13 cases. In comparison, the 2005 total of consumer bankruptcies was more than 2 million nationwide.

 

Georgia, Alabama, and Louisiana filed the highest percentage of consumer bankruptcies from 2006 to 2017, likely due in part to the devastation caused by Hurricane Katrina in 2005. Between 2006 and 2017, 92% of the 25 states contributing the most to the total of national consumer bankruptcies were southern states.

 

In 2011, however, California filers made up 17% of the national consumer bankruptcy filings.  In contrast, Alaska had less than 1,000 filings that same year. In 2016, Alabama had as many as 1 in 112 households filing for Chapter 13 bankruptcy.

 

The most common causes of consumer bankruptcy reported in 2005 included medical bills and credit card debt as significant factors. Since then, the causes of bankruptcy have expanded in variety, including job loss, income reduction, unexpected expenses, and divorce. The average filer today is middle-aged, married, and making less than $30,000 a year.

 

The changes in bankruptcy statistics since the establishment of the BAPCPA in 2005 have manifested in many different ways, including rates of bankruptcy, types of bankruptcy, and circumstances of the filer.

 

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

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Mortgage Options and Rebuilding after Bankruptcy in Luverne, MN

Owning a home is a big goal for individuals and families alike. In today’s world, however, buying a home is a difficult process that requires both good credit and a steady income. Unfortunately, those are conditions that many U.S. citizens don’t have in their lives. For many, the prospect of a mortgage isn’t even on the table. Those struggling with severe debts in addition to having a low income don’t have the option to buy a house unless they seek debt relief and take positive action to turn around their finances. Filing for bankruptcy is one option available to anyone qualifying, and with the help of Behm Law Group Ltd., you can file a successful case and begin rebuilding after bankruptcy in Luverne, MN.

 

Bankruptcy filing is generally offered to most individuals as a Chapter 7 liquidation or Chapter 13 reorganization process. This means your debts will either be discharged in exchange for asset liquidation of your non-exempt assets or reorganized into a repayment plan lasting three to five years and suited to your income. No matter which type of bankruptcy you file for, you’ll receive the benefits of debt relief and likely have long-term stability if you are wise with your finances.

 

While one effect of bankruptcy is debt relief, the other is a hit to your credit. The benefits of bankruptcy are not outweighed by the negative effects on your credit, but it is something you will have to deal with after you file. When it comes to buying a home, for example, you will face varying waiting periods before you can be approved for a mortgage.

 

Chapter 7 Bankruptcy

After you file for Chapter 7 bankruptcy, you will have to wait two years until you can be considered for Federal Housing Authority (FHA) loans. Any other private, conventional mortgage company requires a four-year wait period until it will consider you as a borrower. An FHA loan is offered through a system designed to help consumers struggling to get loans because of poor credit, bankruptcy filings, or other financial problems. FHA mortgages have lower down payments and lower credit score requirements.

 

Chapter 13 Bankruptcy

If you file for Chapter 13 bankruptcy, you will have a two-year waiting period for FHA loans if you have made consistent payments on your chapter 13 plan. However, if you have made consistent payments on your chapter 13 plan for one full year, you may apply for an FHA mortgage consideration with the added recommendation and explanation of your case from your bankruptcy trustee.

 

For conventional loans, that waiting period is two years after the chapter 13 repayment plan is finished and the case is officially closed. If your case is dismissed for any reason, that waiting period is extended to four years.

 

Rebuilding after Bankruptcy

No matter which type of bankruptcy you file for, getting a mortgage afterward requires patience and intelligent planning/management of your finances. To learn more about filing for and rebuilding your credit after bankruptcy in Luverne, MN, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

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Where Things Happen When You File for Bankruptcy in Pipestone, MN and the Surrounding Area

If you’re struggling to meet your debt payments month to month, it may be time for you to consider options for positive debt relief. One of the best long-term options available for individuals struggling with debt is bankruptcy. Bankruptcy is a complex, nuanced legal process that’s difficult to work through without guidance, but with the help of Behm Law Group, Ltd. attorneys, you can build a strong case for Chapter 7 or Chapter 13 bankruptcy in Pipestone, MN. Our attorneys will help you move through the bankruptcy process with confidence and expert advice at each step of the way.

 

Bankruptcy is highly nuanced and requires extensive financial documentation and participation from all parties involved. The participation involved means meetings and other requirements that you, as the filer, must perform. The locations of these meetings vary depending on where you live. For Pipestone, MN residents and those in the surrounding area, these locations and meetings include:

 

  • Attorney Meeting: If you choose to partner with Behm Law Group, Ltd, your attorney meeting will take place in Pipestone, MN at one of the rooms in the Pipestone County Courthouse. Our office is located at 403 South Broad Street in Suite 60, Mankato, MN, but we can and do meet with prospective clients anywhere. If you’re unable to meet with us in person, we can also meet over the telephone and maintain contact via email.
  • 341 Meeting: A meeting of the creditors, also known as the 341 meeting, is required participation for you where you and your lawyer meet with the chapter 7 bankruptcy trustee that the bankruptcy court assigns to review your bankruptcy case. The meeting takes place after you file your petition. In this meeting, the bankruptcy trustee will ask a series of questions about your debts, assets and petition overall. For Pipestone residents and those residing generally in the Pipestone area, your 341 meeting will take place in Mankato, MN at the U.S. Post Office building, if you file a chapter 7 bankruptcy petition.  The Mankato Post Office building is located right across the street from our office.  If you file a chapter 13 bankruptcy petition, the 341 hearing will be conducted in the large conference room in the lower level of the Redwood County Courthouse in Redwood Falls, MN. If you live elsewhere in Minnesota, this list of 341 meetings by county will tell you what location the meeting will take place. Learn more about the 341 meeting here.
  • Bankruptcy Court: The U.S. Bankruptcy Court operates at a national and state level. Each state has various locations of court branches that serve different regions. Minnesota has bankruptcy courthouses in Minneapolis, St. Paul, Duluth, and Fergus Falls. While bankruptcy filers will only have to meet at the courthouse to deal with rare and unusual conditions in their case, there are occasions in which you may have to travel to the court nearest to you. For Pipestone residents any issues that would need to be addressed by the bankruptcy court would be handled at the St. Paul courthouse.
  • Credit Counseling: Another requirement of bankruptcy is credit counseling. Filers must conduct a credit counseling course, either online or in person, within 180 days prior to filing their petitions. There are many court-approved credit counseling agencies in the Pipestone County region and surrounding areas, and you can easily find one suited to your schedule and location. The United States Department of Justice provides a search engine system to find local, approved credit counseling agencies here.

 

To learn more about filing for bankruptcy in Pipestone, MN or to get started on your case today, contact Behm Law Group, Ltd. at (507) 387-7200.

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Understanding the Rise of Bankruptcy in Windom, MN and Nationwide

Filing for bankruptcy is a valuable way to finding long-term debt relief for either an individual or a business. If you’re struggling with your finances and find it difficult to meet debt payments each month, you may benefit greatly from filing a bankruptcy petition.

 

Taking positive steps to work through a bankruptcy case can secure a financial future and stabilize your life in many ways. Behm Law Group, Ltd. can provide the support, guidance, and legal protection you need to build a strong case for Chapter 7 or Chapter 13 bankruptcy in Windom, MN and get the results you need for long-term financial wellness.

 

The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 is also the most common type for businesses of all sizes. This chapter works to liquidate your non-exempt assets (properties and accounts) in exchange for the discharge of the majority of your debts.

 

Chapter 13, on the other hand, reorganizes your debts into a repayment plan customized to your income. This repayment plan lasts three to five years, and it may discharge a large percentage of your unsecured debts (i.e. credit card debt and medical bills).

 

If you do plan to file for bankruptcy, you’ ll not be alone among U.S. citizens. In fact, there has been a recent increase in bankruptcies across the country. While the rate of bankruptcy is still far below recession levels, there is an unmistakable uptick. The American Bankruptcy Institute recorded a 3% increase in bankruptcies from July of 2018 to July of this year, projecting a total of 796,000 cases compared to last year’s total of 777,000.

 

In contrast to this increase in bankruptcies, there has been a national average increase in minimum wages and an overall decrease in unemployment. So, why are there more bankruptcies?

 

The fact is that U.S. debt is incredibly high right now. The recorded debt for total consumer households is at $14 trillion, with credit card debt at $1 trillion. For perspective, the total debt of the 2008 recession was $1 trillion less than today’s debt. Unfortunately, on top of their debt, many individuals are still spending recklessly. Businesses and consumers alike are suffering from the national debt, as all economic conditions ripple through the U.S. financial systems. To learn more about these circumstances, explore the New York Post’s coverage.

 

You may find yourself in dire straits, financially speaking, from accumulated or sudden debts, and this may be a result of actions in or out of your hands. No matter how you got here, bankruptcy is available to you as an effective debt relief option.

 

To learn more about filing for bankruptcy in Windom, MN and the surrounding area, contact Behm Law Group, Ltd. at (507) 387-7200 today.

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Top Three Causes of Bankruptcy in Waseca, MN

Over 700,000 cases of bankruptcy have been filed each year since the 2008 market crash. Though this number has decreased since its peak in 2010, there are still thousands of cases filed across the country.

 

If you’re struggling to meet monthly debt payments, it may be time for you to consider joining others who have used bankruptcy as an effective debt relief option and gain long-term financial wellbeing. With the help of Behm Law Group, Ltd. you can navigate the nuanced waters of bankruptcy in Waseca, MN and file a successful case for Chapter 7, Chapter 12, or Chapter 13 bankruptcy relief.

 

Bankruptcy is a process designed to support debtors, lenders, and the economy as a whole. Different systems of bankruptcy have been in place for centuries, and today’s U.S. Bankruptcy Court has several types of bankruptcy chapters established to treat individual and business debts.

 

For individuals filing for bankruptcy, the system provides solutions for the most common causes of their financial struggles. For many individuals, there are three primary sources that push them to the point of filing for bankruptcy.

 

  1. Medical Bills: Because the U.S. doesn’t provide national healthcare coverage, privatized health insurance companies are the only option for the majority of individuals. Because health insurance providers are private companies, they can be very expensive. In addition to this, medical care itself is very costly, from general check-ups to serious surgeries. For those who can’t afford health insurance, it’s nearly impossible to pay for any medical treatments. Several studies show that accumulated medical bills or sudden expenses are the number one cause of bankruptcy in the U.S.
  2. Unemployment: While the government provides support for the unemployed via unemployment compensation, it’s often not quite enough to make ends meet. Long-term unemployment will almost certainly create a situation of severe debt, especially if the individual has mortgages, credit card debt, or car loans to repay. Chapter 7 bankruptcy is designed to help those without a steady income resolve debts that they cannot pay while unemployed.
  3. Divorce: The combination of legal fees, emotional turmoil, increases in living expenses, and a decrease in income as a result of divorce can all create a situation of financial struggle. The cost of divorce is high just in terms of court fees and legal representation, often meeting a minimum of $2,500. In addition, you lose the income of your ex-spouse, and your living expenses may actually increase. All of this makes divorce a main cause of bankruptcy, especially if the couple was facing financial struggles prior to the split.

 

If you’re considering bankruptcy for any of these reasons and more, you’re not alone. Choosing to take the next step and starting a bankruptcy petition will take you down a path to long-term financial stability. To learn more about bankruptcy in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.