Understanding and Navigating What You Might Face after Filing Bankruptcy in New Ulm, MN

Life has its ups and downs, which is a cliché, yes, but clichés are often rooted in simple truths. While some individuals and businesses won’t experience as extreme a financial event as bankruptcy, it certainly affects those who do file in many ways. The emotional and mental stresses of financial struggles aside, bankruptcy has its own effects on a filer’s life before, during, and after a case is closed. If you are considering filing bankruptcy in New Ulm, MN, Behm Law Group Ltd. can help you build a strong petition, meet pre-bankruptcy requirements, follow through with your case, and complete the process successfully with as little stress as possible.

 

Behm attorneys are skilled, knowledgeable, and experienced in handling a wide range of Chapter 7, Chapter 13, and Chapter 12 cases, and we have the means to protect and help you through your entire case.  After a bankruptcy is completed, however, you may face a few challenges.

 

As with people who have not filed for bankruptcy relief and who may have bad credit, there are three instances when bankruptcy filers can be discriminated against.

 

  • Loans: Your post-bankruptcy credit scores will not be what they were pre-bankruptcy. Your scores will take a hit, but you can still build up your score over time. Despite this, you may have a hard time getting new loans after filing. Lenders can turn you down for loans or charge higher interest rates on an accepted application. If you are in a credit counseling program, you may experience difficulties getting financing as well.   Many people who file for bankruptcy relief may actually have great credit scores.  However, they are typically unable to do anything even with great credit scores because their debt to income ratio is so skewed.  Simply put, any great credit scores are entirely illusory because people simply have too much debt already and they do not have sufficient income to materially reduce that debt.  Creditors will not make further loans to you when they see that your income is insufficient to pay and materially reduce the debt that you already have.  After a bankruptcy is completed, you may have a poor credit score but, paradoxically, you may be more credit worthy than you were before.  In many ways, bankruptcy “leans you up” debt-wise because you get rid of most, if not all, of your debts.  In many ways, you are like Pinocchio because you don’t have any “debt strings” or you have a lot less of them.  Additionally, you will not qualify for bankruptcy relief again for several years.  Oftentimes, creditors, even the ones you may have included in a bankruptcy case, see this and they are incentivized to work with you again.   They understand that they would get to be first or second in line to get paid by you after a bankruptcy instead of being tenth or fifteenth in line to get paid before a bankruptcy filing.  They also understand that they could garnish your wages and levy on your bank accounts if you don’t pay them and that you would not be able to do anything about it because you would not qualify for bankruptcy relief again for several years.  Therefore, even after a bankruptcy filing, creditors often consider you a very attractive credit risk.

 

  • Employment: Unfortunately, private employers can pass judgment on your application if they know you have filed for bankruptcy or see that you have a lower credit score than other applicants. Most employers wouldn’t want to hire people who are handling a personal issue as significant as bankruptcy or poor finances as there is a chance the financial issue will affect their job performance. Being open and straightforward with employers can help you get through this prejudice, but sadly, it won’t always help them ignore your circumstances.  However, this also happens frequently with people who have poor credit scores and who haven’t filed for bankruptcy relief.  Often, potential employers will see that your situation is more manageable and secure after a bankruptcy than it was before and that you have been freed of the mental anguish and emotional stressors that you had before.  They know that they will not be served with a garnishment summons on your wages because your debt issues have already been taken care of.

 

  • Renting: Like lenders and employers, landlords may also tend to discriminate against potential renters based on their credit scores or recent bankruptcy cases. Understandably, landlords need tenants to pay rent on time. This means they may place judgment on potential renters based on their credit scores. In the eyes of a landlord, it’s simpler and easier to judge based on credit scores than the many other factors that could be involved.

 

In general, you can avoid these post-bankruptcy issues, but if you do experience them, there are ways to navigate these difficulties. To learn more about the process of filing bankruptcy in New Ulm, MN, and life after filing, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

Rebuilding Your Business or Starting Fresh after Bankruptcy in Marshall, MN

Owning and operating a business is a difficult endeavor, no matter how small that business is. This is why many businesses find themselves in a financial situation that is less than desirable. If your business is facing debts you’re unable to repay, filing for bankruptcy may be your saving grace in preventing further struggles down the road. With the help of Behm Law Group Ltd., you can file a successful case for bankruptcy in Marshall, MN, and even rebuild your business and your credit after your bankruptcy case is concluded.

 

Business bankruptcies vary depending on the legal status or structure of the business. Any corporations, LLCs or other business formats that have a separate legal and financial standings from their owners typically can file for Chapter 7 or Chapter 11. On the other hand, sole proprietorships and partnerships are directly tied to the owners’ personal assets and personal debts/liabilities, which means they can file for Chapter 7 or Chapter 13.

 

For all types of businesses, the Chapter 7 process works in the same way to liquidate business assets (properties, accounts, etc.) in exchange for the discharge of debts. In any Chapter 7 business case, the business is typically closed when the case is completed.

 

Though Chapter 11 and Chapter 13 work similarly to reorganize business debts into a manageable repayment plan, there are some differences. For small businesses, Chapter 13 is often ideal for many reasons. Learn more about the benefits of Chapter 13 here.

 

No matter what type of bankruptcy you file, your business can face a range of challenges down the line. From shutting down your business completely to severely lowering your credit standing, bankruptcy can force significant alterations or changes but those alterations or changes, in most cases, are both rehabilitative and beneficial long-term. It’s absolutely possible to rebuild your business and your credit after filing for bankruptcy relief, whether this means starting anew or rebuilding through a debt repayment plan. Every case is different, but there are some strategies that every business owner can do to rebuild after a bankruptcy filing:

 

  1. Change the way you budget. Something led to your business bankruptcy, and whether that was caused by your actions or by external reasons over which you had absolutely no control, you can make changes in your budget to prepare for challenging financial times. Creating a conservative spending and generous saving plan is often a vital step.
  2. Focus on rebuilding your credit. When your credit is good, your business can use that advantage to expand, which in turn, opens many other doors. Your credit will take a hit after bankruptcy, but you can take small actions to slowly rebuild it. Take care to pay all bills on time, meet your debt requirements, communicate often with your creditors and stay away from just paying the monthly minimum payments.
  3. Consider separating your business finances from your own. When you can (i.e., have the funds and are not on a Chapter 13 debt repayment plan), establish your business as a corporation or LLC (not a sole proprietorship or partnership) to protect yourself from any financial issues.

 

To learn more about how to rebuild your business and your credit after filing for bankruptcy relief in Marshall, MN, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

 

Five Things You Might Not Expect About Bankruptcy in Windom, MN

Because the average individual is not an expert on the legal nuances of bankruptcy, it’s understandable that most people use the internet as a guidebook for the process. While there are a few accurate sources of bankruptcy information online, there are also a lot of myths and general misinformation.

 

When it comes to correct and reliable information, nothing beats a professional opinion. Behm Law Group, Ltd. provides that expert opinion. If you’re considering filing for bankruptcy in Windom, MN, or the surrounding area, Behm Law Group, Ltd. can offer advice and more throughout the process.

 

You can find much about the basics of bankruptcy online, but the basics aren’t quite enough to file a successful case and see it through. Bankruptcy is an old practice, going back to ancient times, though it has evolved over time. Today, bankruptcy has many conditions that can change the course of a case, making it one of the most nuanced legal processes.

 

Because of this complexity, there are many unexpected things about bankruptcy, even as a nationwide occurrence. For example:

 

  1. About 1 in every 70 households file for bankruptcy each year. If you look at your community based on this information, it’s possible you may know someone who is working through bankruptcy.
  2. Almost 50% of households in the U.S. spend more than half their yearly income and have up to $15,000 in credit debt. This addition of credit debt to an already common pile of debts including student loans, mortgages, car loans, and more has led to a rapid increase in the number of consumer bankruptcies per year.
  3. The vast majority of people who file for bankruptcy relief don’t lose any property and only lose their debts.  The bankruptcy exemptions that are available to you to protect your property are typically very generous.  The bankruptcy exemptions you can use and the limitations of those bankruptcy exemptions vary from state to state.  Generally, you must reside in a particular state for two (2) full years before filing a bankruptcy case in order to use or benefit from the bankruptcy exemptions of that state.
  4. The amount of average debt per bankruptcy case has increased over in the past 10 years. An American Bankruptcy Institute report released in 2009 showed that cases averaged $100,000 in debt for individual bankruptcies alone. Business bankruptcies had even greater debt averages per case. This shows there is a notable increase in the time households and businesses are barely making ends meet before filing for bankruptcy.
  5. Bankruptcy has increasingly affected those with a college education as tuitions rise. Each year, college tuitions increase to match the growing inflation our economy experiences. Student loans must be listed, like any other creditor, in the bankruptcy process but they are generally difficult to get discharged, except under specific circumstances.  Student loan debts, in combination with the weight of others, still significantly contribute to bankruptcy filings, however.

 

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

Lien Avoidance vs. Lien Stripping When Filing for Bankruptcy in Waseca, MN

Anyone struggling to meet monthly debt payments has more options than just slipping deeper beneath the water of financial difficulties. Instead of facing the stress of debt and the emotional toll it creates, those working through financial troubles can find relief within the government sanctioned process of bankruptcy.

 

If you think bankruptcy might be right for your financial circumstances, Behm Law Group, Ltd. can provide professional guidance and support. When you choose to file for bankruptcy in Waseca, MN, as an individual or business, you can gain the benefits of a debt treatment process that will lift the stress of a heavy financial burden.

 

When you file for bankruptcy, you may have many different types of debts to your name. Broadly speaking, the types of debts included in the bankruptcy process are generally secured and unsecured. Your secured debts are tied to or secured by an item of property or real estate, and it’s almost certain that the property or real estate will have liens attached to them.

 

Liens are tied to property loans like mortgages, car loans, and other commonly secured debts that are arranged through lending companies. These liens give the lenders the right to repossess or foreclose on the properties tied to the debts until the debtor pays the debts or the debts are discharged. In the bankruptcy process, mortgage liens can be stripped or avoided, depending on the situation.

 

Lien Avoidance in Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy, you’re entering into a liquidation process that works to provide your creditors the value of your non-exempt property in exchange for debt relief. You can protect your properties from liquidation with your available bankruptcy exemptions, however. If there was a lien on a piece property, claiming the exemption is not considered lien avoidance.  Your available bankruptcy exemptions allow you to protect the equity – the value of an item of property above the debt you may owe against it – in your property.  Sometimes, you can avoid a creditor’s lien in full or in part regarding a certain piece of property and use your bankruptcy exemptions to protect the equity you gain from such lien avoidance.  In order to avoid a lien on property, a secured creditor’s lien must be a non-purchase money lien.  This means that the creditor did not give you any financing for the purchase of the subject asset itself.  For instance, if a creditor gives you a loan for home improvements and you give that creditor a lien or security interest in your furniture or a vehicle, farming equipment or some other assets, that creditor has a non-purchase money lien as to those items because it did not give you a loan to purchase them.  Rather, the creditor gave you a loan for some purpose that was completely unrelated to the assets on which you allowed the creditor to have a lien.  Presume that One Main Financial gave you a $10,000.00 loan for home improvements and further presume that you granted it a security interest in your furniture, appliances, and your car.  In a bankruptcy proceeding, you could avoid the entire $10,000.00 lien on those items and use your bankruptcy exemptions to protect the resulting $10,000.00 equity you would then have as a result of having avoiding the lien.

 

Lien Stripping in Chapter 13 Bankruptcy

If you file for Chapter 13 bankruptcy, your debts are reorganized into a manageable repayment plan lasting three to five years. If you have multiple mortgages on your property, you may be able to strip off second and third mortgage liens, if there is no value or equity to the real estate above and beyond the first mortgage.  If the amount of the first mortgage is greater than the value of your home, you’re considered “upside down” on that mortgage debt, and you can strip the junior liens away.

 

To learn more about the different types of bankruptcy chapters and how your liens are handled when you file for bankruptcy in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

What You Can Learn from Public Listings of Bankruptcy in New Ulm, MN

In the U.S., the majority of court cases are put on public record. This includes all bankruptcy filings which are often listed in local newspapers and are always available on the government-administered online database PACER (Public Access Court Electronic Records). The listings available on PACER are not easily accessed by any individual, but they are available to bankruptcy attorney, creditors involved in bankruptcy proceedings, bankruptcy trustees and bankruptcy judges.

 

If you’re struggling to meet debt payments and think that bankruptcy might be right for you, it’s important to understand why and how your case may be listed publicly and could be accessed by a limited number of parties. If you are considering filing, Behm Law Group, Ltd. can provide the guidance and assistance you need when working through bankruptcy in New Ulm, MN.

 

Bankruptcy is given a poor image both in financial and social terms, but the fact is that it’s a vital process for those who are unable to recover from severe debt. For many, bankruptcy is the best way to debt relief and long-term financial recovery.

 

Those planning on filing for bankruptcy can learn some of the basics of the process just from looking at listings local to their area. If your local newspaper lists monthly bankruptcies, it’s likely they will be written out like this:

  • Name of filer
  • Name of any joint filers
  • Address of filer
  • Chapter they filed
  • Date they filed
  • Their assets
  • Their liabilities

 

This is what you can learn from this listing:

  • The name of the filer may tell you if it was a business or individual.
  • The joint filer names tell you that either a spouse or a business partner filed jointly.
  • Their address tells you what region they filed in, and may give you some more information about the financial demographics of that area if there are multiple bankruptcy filings. If you live in the same region, it may give you some peace of mind to know you’re not alone.
  • The chapter they filed for will give you an idea of the bankruptcy process (i.e. whether it was liquidation or reorganization).
  • The date they filed may give information about fluctuations of increases or decreases in bankruptcy cases throughout the year.
  • Their asset amount tells you how much their properties and accounts were worth. This includes physical property, bank accounts, stocks, retirement funds, and any other sources of income.
  • Liabilities represent a blanket term for debts and other unpaid financial obligations. This amount tells you just how much debt might have been resolved through bankruptcy, and it gives you a good comparison of asset to debt ratios.

 

Overall, public postings of local bankruptcy cases give you a great way to compare your own situation with those who found recovery through the bankruptcy process. Generally speaking, Minnesota newspapers choose not to list local bankruptcy filings.  However, newspapers in North Dakota and Iowa do choose to list local bankruptcy filings.  For many reasons, including the possibility of identity theft, newspapers are becoming much more circumspect about listing local bankruptcy filings.  If you believe filing for bankruptcy in New Ulm, MN, might be the right choice for you, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Long-Term Financial Effects of a Government Shutdown and Getting Help from a Bankruptcy Attorney in Marshall, MN

Starting in December of 2018 and ending more than a month later, the recent government shutdown was the longest in U.S. history and impacted more government employees across the country than any other shutdown before. The ripple effects of the shutdown grew by the day and had severe effects on many employees’ finances. The lack of income for government departments, programs, organizations, and employees alike caused, for many, a rapid decline into debt.

 

If you were affected financially by the recent government shutdown and are facing unmanageable debts because of this, filing for bankruptcy is a viable option to receive government-sanctioned debt relief. Behm Law Group, Ltd. can help you file a strong case with the guidance and counsel of an expert bankruptcy attorney in Marshall, MN.

 

Reports of shutdown-related debts and expenses have come from all kinds of sources. All types of government employees suffered financially from the shutdown. A month without a paycheck can lead quickly to all kinds of poor financial conditions simply due to an inability to pay bills. Government employees found that they were unable to make payments on a wide range of common bills or debts including:

 

  • medical bills and health insurance
  • utilities, including water, electricity, and gas
  • rent or mortgage
  • car payments or car repairs
  • automotive and related insurance
  • life insurance
  • retirement plans
  • student loans
  • credit cards
  • taxes

 

Businesses and organizations that relied on government funding also suffered badly, and the individuals employed by these businesses and organizations experienced a range of difficulties such as not receiving a paycheck and benefits or being laid off. Though the shutdown only lasted for a month, the long-term effects will last for years. Recovery from unexpected, sudden, and complete cutoff from an income and government support for an unknown amount of time is still causing a real struggle today for many U.S. citizens and businesses.

 

In comparison with the 2013 government shutdown, for example, the recovery process has proved to be more difficult and longer simply due to the suddenness, time frame, and nature of the 2018-2019 shutdown. The lack of structure and planning in this recent shutdown created an outcome resembling an economic recession that was crammed into a 30-day period.

 

In times like these, it’s important to remember that consulting a bankruptcy attorney is a real option that you should consider seriously. If you were unable to pay your bills because of the government shutdown and are still trying to overcome the negative effects, bankruptcy may provide realistic, long-term recovery from debt.

 

To learn more about filing for bankruptcy and how an expert bankruptcy attorney in Marshall, MN, can help you get back on your feet after the shutdown, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Guidelines and Limitations of Chapter 13 Bankruptcy in Windom, MN

Chapter 13 bankruptcy is a format of debt reorganization most common for individuals and some types of businesses. Overseen and administered by a standing bankruptcy trustee, a Chapter 13 case takes secured, unsecured, and priority debts and alters them into a consolidated repayment plan that lasts three to five years depending on the debt amount of the filer. If you have a steady income and want to protect your assets from the liquidation that could occur in a Chapter 7 case, Chapter 13 may be the best choice for you. With the guidance of Behm Law Group, Ltd., you can successfully file for Chapter 13 bankruptcy in Windom, MN and obtain long-term debt relief.

 

While Chapter 13 is a highly effective bankruptcy option for people in a broad range of financial situations, it has limitations and guidelines like any other type of legal process. The most basic of these limitations decides who can and can’t file.

 

Who can file?

  1. Individuals:
    1. For an individual to qualify for Chapter 13 bankruptcy, they must have a steady income that allows for reasonable and necessary expenses for living to be factored out of their repayment plan while still meeting monthly payments.
    2. They must have undergone credit counseling within 180 days prior to filing.
    3. They cannot have secured debts exceeding $1,184,200 or unsecured debts exceeding $394,725.
    4. They must have filed all of their income tax returns for the past four years prior to filing.
    5. They cannot have filed a Chapter 13 case within the past two years or a Chapter 7 case within the past four years.
    6. They cannot have filed and had dismissed another bankruptcy case within the last 180 days.
  2. Spouses:
    1. Spouses can file a joint Chapter 13 case involving both of their debts and combined incomes if they have also met all the requirements listed for individual filers.
  3. Businesses:
    1. Some businesses are eligible to file for Chapter 13 bankruptcy. Specifically, those whose owners are personally liable for the business debts.
    2. This includes sole proprietorships and business partnerships.

 

Other limitations and guidelines of Chapter 13 bankruptcy outline the repayment plan itself.

What is an accepted repayment plan?

  1. For a filer’s repayment plan proposal to be accepted by their trustee and the court, it must meet specific requirements designed in fairness to creditors.
  2. In their repayment plan, a filer must be able to repay allowed secured creditors’, under adjusted loan terms/conditions, in full over a three to five-year period.
  3. Their priority debts such as tax debts, child support debts, alimony, criminal fines, etc., must be included in the plan and must be repaid in full over a three to five-year period.
  4. Unsecured debts must be repaid the value of the filer’s non-exempt assets that would have otherwise been liquidated in a Chapter 7 process.   This is informally referred to as the “Best Interests Test”.  For example, if a filer would have non-exempt assets totaling $10,000.00 in a hypothetical Chapter 7 case, the filer must pay that amount over a three to five-year period to their creditors in a Chapter 13 case.

 

While there are many guidelines to follow and limitations to adhere to in the process of Chapter 13 bankruptcy in Windom, MN, it’s undeniable that it has been an effective treatment for a wide variety of debtors. To learn more about the process or to get started, contact Behm Law Group, Ltd. at (507) 387-7200 today.

 

Rising Debt in the Growing Season Increases Cases of Chapter 12 Bankruptcy in Mankato, MN

Ever since people have learned to grow plants and care for livestock, farming has proved to be one of the most difficult occupations in which to make money. Because farming is so dependent on natural conditions, it’s inevitable that it is often filled with hardship. In today’s global economy, and in the face of changing environmental factors, farming has become a harder way to make a living than ever before. If you are struggling to support your farm, you are not alone. With the help of Behm Law Group Ltd., you can decide whether filing for Chapter 12 bankruptcy in Mankato, MN, is the right choice for you, and work through the process with our guidance and support.

 

Chapter 12 bankruptcy is specifically designed to treat the financial conditions of a family farmer. Like Chapter 13 and Chapter 11, this process reorganizes your debts into a manageable repayment plan overseen by a bankruptcy trustee. This allows you to keep your company and property stabilized until your debts are repaid under adjusted or modified loan terms. If you have a difficult few years, Chapter 12 can be a critical option for keeping your family farm running.

 

The problem many farmers have struggled with in the last twenty years is a lack of demand. Farmers can grow more corn and soybeans than ever before thanks to GMOs and pesticide technology. While crop demand increased with production until recently, it has now started to drop in comparison with the supply ratio. Due to this, farmers are seeing decreasing income in response to the time, hard work, and cost of crop production.

 

Reflecting the difficult times farmers are currently facing across the country, Minnesota has seen a rapid increase in the number of Chapter 12 cases, especially during the spring growing season. Spring is the time of year when income from the previous season is most important to be able to get a new crop in the ground and established for the coming months. If you have struggled to make ends meet in the previous year and have seen a decrease in demand for your supply, you may be facing an even lower return in this new season.

 

This cycle starts to resemble a spiraling out of income and a loading on of debt for farmers. A demand for crops that cannot match the supply grown causes a lower income for farmers. This lower income prevents them from paying necessary costs-of-living and farming expenses, and results in more debt, more loans taken out, and in the long term, a higher risk of bankruptcy.

 

Despite this negative cycle we are currently seeing for Minnesota farmers, the possibilities that Chapter 12 bankruptcy offers are a silver lining that, not only allows farmers to keep their businesses running and resolve debt, but also provides a long-term solution for unbalanced supply and demand. To learn more about how filing for Chapter 12 bankruptcy in Mankato, MN, can help farmers with unmanageable debt, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

Consequences of Asset Hiding When Filing Bankruptcy in Jackson, MN

If your debts are severely affecting your quality of life or the function of your business, it may be the right choice to look for realistic debt relief options. While some debt relief options are possible in negotiations with creditors and third parties, filing bankruptcy offers truly permanent, court enforced/sanctioned solutions for debt relief. When you find yourself looking for answers in a complicated financial world, Behm Law Group, Ltd. can provide all the assistance and guidance you need when filing bankruptcy in Jackson, MN

 

Bankruptcy resolves in several ways depending on the type of chapter you qualify for:

  1. If you’re an individual filer or a business with debts that outweigh income, you can qualify for Chapter 7 bankruptcy. This process works to liquidate your non-exempt assets in exchange for the discharge of your debts.
  2. If you don’t qualify for Chapter 7, you can qualify for Chapter 13 as either an individual filer or as a business. This process works to restructure your debts into a manageable repayment plan lasting three to five years. A similar process some businesses can choose instead of Chapter 13 is Chapter 11, which works very large businesses and individuals with very high incomes and very large amounts of debt.
  3. Finally, family farmers and fishers have a specialized bankruptcy process through Chapter 12. This is also a repayment plan structure, but it is designed to be processed in an expeditious legal protocol that is uniquely tailored to the specialized nature of the filer.

 

No matter what type of bankruptcy you file, there are certain parts of the process that are the same in all chapters. One major consistency between every single case that has ever been and will be filed is that the filer must be completely transparent about their finances.

 

Transparency about your finances, whether you’re filing as an individual or as a business, includes providing information to the court about your debts, income, living expenses and assets/properties. Failing to provide this information can result not only in your case being dismissed but also in having accusations of fraud leveled against you. You sign your bankruptcy paperwork under oath and subject to penalty of perjury.  One common type of bankruptcy fraud is asset hiding.

 

If you hide your assets, you can expect several consequences in your bankruptcy case, all negative:

  1. Your debts connected to that asset won’t be discharged because it’s impossible to treat a property secured debt in bankruptcy without revealing the asset.
  2. Discharges provided in your case may be revoked when the asset is inevitably revealed.
  3. If you file for bankruptcy in the future, previously hidden debts cannot be discharged.
  4. If you commit fraud, you can be sued and even face criminal charges with hefty fines or jail time attached.

 

If you’re planning on filing bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 to learn more about how our attorneys can help and for comprehensive counsel throughout your case.

Building Business Up Again after Filing for Chapter 7 Bankruptcy in New Ulm, MN

Businesses may thrive or fail for a wide range of reasons in a nuanced and ever-changing economy. If you are struggling with a failing business, you should never feel shame in seeking debt relief. Instead, understand that you are taking assertive action to protect yourself, any other parties involved, and even your business itself in some cases. One common and highly effective debt relief option available to all kinds of businesses is bankruptcy. With the guidance and counsel of Behm Law Group Ltd., filing for Chapter 7 bankruptcy in New Ulm, MN, can be a positive, long-term solution for your finances.

 

While it’s true that the majority of Chapter 7 business bankruptcy cases end with the closing of the company, there are some businesses that can maintain their functioning after filing.

 

Businesses that stay open after liquidation include those that:

  1. Do not themselves own the assets needed for business operations (i.e. the assets are actually owned and have always been owed by the individuals who own and operate the business); and
  2. The total value of assets owned by the business is less than the total amount of debt owed by the business, particularly debts owed to creditors who have security interests in and to the business assets.

 

In the case that you can keep your business open after Chapter 7 bankruptcy, however, it may become increasingly difficult to maintain production/services and revenue. For those who would be unable to continue operating their business even while meeting the above condition, and for the remaining majority of business owners whose businesses close after liquidation, don’t despair. There is still hope you may be able to reopen your business in the future or start a new business successfully.

 

Starting Afresh

While it may be difficult, starting a new business after filing for Chapter 7 bankruptcy is entirely possible. Being fully prepared for the obstacles you might face is the best course of action if your end goal is a long-term business operation.

 

  1. You may have challenges getting loans and business credentials in general. It is hard but not impossible to gain business credit after a business you have already been affiliated with has filed for bankruptcy relief.
  2. The best way to improve your chances of gaining business credit is to create a detailed, strong business plan with both short- and long-term structure.
  3. Another way to improve your chances of a successful business is to partner with someone who has good credit and is ready to support you in the face of lenders.
  4. Finding investors with reputable backgrounds (friends and family included) to support your business in the beginning stages is often an effective way to navigate through and around the credit structure system.
  5. Many local banks and credit unions provide financing programs for those individuals and businesses who have worked through a bankruptcy case in their community. Finding organizations that are willing to support your endeavors with goodwill is also a viable option.
  6. Depending on the nature of your business and your community, you can also find a wide range of grants, financing, and crowd-sourced funding that are provided to many starting business owners.

 

If you are hesitating to file for Chapter 7 bankruptcy in New Ulm, MN, because of a concern for business closure or other difficulties beyond, contact Behm Law Group Ltd. at (507) 387-7200 to learn more. There is life after bankruptcy, both for the individual and the business!