Knowing When and How to File For Bankruptcy in New Ulm, MN

Filing for bankruptcy may be a daunting task in New Ulm, MN, and knowing how and when to do so can be overwhelming. The attorneys at Behm Law Group, Ltd. will help you with your bankruptcy process by making it flow smoothly and easily.

The timing for when you file for bankruptcy can be an advantage or detriment to the bankruptcy process. For instance, there is a popular belief that one can splurge with a large amount of money right before filing for bankruptcy and not have to pay it back.

This is simply not true.

The money will have to be paid back and, in addition to that, the legitimacy of the bankruptcy claim may be questioned. Our attorneys will inform you whether you qualify for bankruptcy and which bankruptcy option is best for you.

There are two ways one can file for bankruptcy in New Ulm, MN. The first is voluntary and the debtor chooses to file for bankruptcy. The second is when a debtor is forced by a court order to file for bankruptcy.

How to file for bankruptcy depends on the type of debt you have. At Behm Law Group, Ltd., we assist with filing for Chapter 7, 12, and 13 bankruptcies. Since Chapter 12 is for fishermen and family farmers with a regular annual income, most people choose Chapters 7 or 13.

Chapter 7 bankruptcy does not allow the debtor to repay their debt using a payment plan. Rather, the debtor’s non-exempt assets are sometimes sold in order to pay some of their debt.  While much of the analysis would depend on the value of property and the amount of debt, if any, against that property, some non-exempt property may include a second home or car, family heirlooms, or an expensive musical instrument. A person eligible for Chapter 7 does not have an income to pay off or materially reduce over time the debts that have accrued.

Chapter 13 bankruptcy allows debtors with a regular income to repay all or a portion of their debt based on their income. The debtor will repay the debt for the next three to five years. This process can be a tad more complicated, but the professionals at Behm Law Group, Ltd. will make the bankruptcy process easier and understandable.

Knowing your options during your bankruptcy in New Ulm, MN will help make for a smoother process. The professionals at Behm Law Group, Ltd. will take you through the process and thoroughly inform you every step of the way.

 

Delinquent Mortgages in Chapter 13 Bankruptcy

Behm Law Group provides bankruptcy advice for Mankato, MN residents.

The bankruptcy attorneys at Behm Law Group, Ltd., believe everyone deserves a second chance. You want your self-esteem and dignity back. You want to be a contributing member and a better citizen in society. You dream of financial solvency.

Make that dream become your new reality, for a second time. First, let’s consider your bankruptcy dilemma. You, like everyone else, need shelter. A home mortgage, however, can be quite pricey.

Let’s say you are delinquent with your mortgage by $10,000.00. You filed for bankruptcy. At this time, things have changed. While you now have an income, the mortgage is still delinquent. Under 11 U.S.C. Sec. 1322 and 1325 of the Bankruptcy Code, in a Chapter 13 bankruptcy, you can “cure” or pay back the delinquency over a period of 60 months. How? You would be submitting your monthly payments to the Chapter 13 trustee for those 60 months. The trustee would in turn ensure the payments were received by the mortgage lender in question. One stipulation is that you must remain current in your mortgage payments during your Chapter 13 plan.

Sixty months may seem like a long time, but the bankruptcy attorneys at Behm Law Group, Ltd., know that time will pass quickly. Just having a plan can be a big dream booster for that opportunity of a second chance. It won’t be long until making payments will become a habit for you. Pretty soon you’ll be out of Chapter 13 bankruptcy.

Your strengthened self-esteem will be waiting for you. You will have relinquished those bouts of not knowing what to do. You will have acquired some financial discipline. After those 60 months, prepare for the worst, but hope for the best. If feasible, maybe you could continue those “mortgage payments.” Instead of giving them to a trustee, why not put them in a savings account as a payment to yourself. You will accumulate a buffer to hedge against future financial disasters.

We know you can’t predict the future. You can only plan the best that you can. Should you find yourself in financial difficulty, give us a call. Like we stated, everyone deserves another chance.

“Cramdown” Under Chapter 13 Bankruptcy in Mankato, MN

Behm Law Group provides bankruptcy assistance for residents of the Mankato area.

When traveling somewhere, many people cram all sorts of necessaries in their suitcases. The idea is to compress space, yet take what you want. Under 11 U.S.C. Sec. 1322 and 1325, when applied to Chapter 13 bankruptcy cases, a cramdown of a vehicle debt conveys a similar meaning.

Let’s consider one example for folks in Mankato, MN. The bankruptcy attorneys at Behm Law Group, Ltd., would like you to imagine you take out a vehicle loan for $20,000.00 at 20% interest, and this loan becomes effective more than 910 days before filing for bankruptcy relief. At the time of the bankruptcy filing the vehicle is only worth $10,000.00. In a Chapter 13 bankruptcy case, you could cramdown the $20,000.00 debt to the present $10,000.00 value of the vehicle. In addition, you could cramdown the interest rate from 20% to 5%. Now, instead of paying the vehicle lender, you pay the Chapter 13 trustee the $10,000.00 at 5% interest. This means that you are no longer paying the vehicle lender directly.  Rather, the chapter 13 trustee pays the vehicle lender with the payments you make to the chapter 13 trustee but pursuant to the modified terms as denoted above.  At the conclusion of the Chapter 13 bankruptcy, you would get the vehicle title. You would have effectively crammed down or decreased the amount of your vehicle debt.

But, wait! Don’t rush out to buy a vehicle using Chapter 13 as a strategic maneuver just so you can decrease the amount of your vehicle payments, Mankato, Minnesota. The bankruptcy attorneys at Behm Law Group, Ltd., recognize there are stipulations for who can file for a Chapter 13 bankruptcy. You may or may not qualify. You would still need a source of income to make payments under Chapter 13.

A cramdown is just one feature of a Chapter 13 bankruptcy. Of course, Chapter 13 isn’t the only type of bankruptcy either. Mankato, MN, feel free to call the bankruptcy attorneys at Behm Law Group, Ltd., if you are experiencing financial difficulties. We’d be more than happy to discuss your options with you.

What A Difference A Dollar Makes: Bankruptcy Law in Mankato, MN

Mankato, MN Bankruptcy Law and Mortgage Lien-Stripping – Behm Law Group, Ltd.

Bankruptcy law can turn on a dime, or at least a dollar. Consider, for example, the “mortgage lien-stripping” clause found in Chapter 13 bankruptcy. In cases where a debtor has a home with more than one mortgage, mortgage lien- stripping may come into play, depending on a multitude of factors. Generally speaking, if a debtor owes more on their home with a first mortgage than the home is actually worth, then a second mortgage could be stripped away via Chapter 13 bankruptcy. Behm Law Group, Ltd. offers bankruptcy advice and assistance in Mankato, MN during your time of need.

However, the margin to qualify for mortgage lien-stripping can be razor thin. For example, if a home is valued at $125,000, but the debtor has a first mortgage of $130,000 and a second mortgage of $40,000, the second mortgage would qualify for mortgage lien-stripping because the debtor clearly owes more on the first mortgage alone than the home is actually worth. The mortgage lien-stripping waters become considerably less clear the closer the first mortgage and actual home value become. For example, if a first mortgage is for $130,000 but the actual home value is currently appraised at $130,001, the margin in that case is considered close enough that any secondary mortgage could not actually be entirely stripped off. Therefore, a single dollar can stand in the way of a debtor being able to discharge several thousands of dollars on a secondary mortgage.

Bankruptcy provisions such as mortgage lien-stripping can be incredibly complex and confusing, and they definitely shouldn’t be navigated by amateurs who aren’t extraordinarily well-versed in the nuances of bankruptcy law. After all, there are thousands of dollars at stake, and debt-holding entities don’t let go of thousands of dollars without putting up a huge legal fight. You need bankruptcy law professionals who can stand knowledgeably in your corner to protect your rights under the law.

The professionals at Behm Law Group, Ltd. are adept at navigating the intimidating landscape of bankruptcy filing and helping clients find their way through the bankruptcy experience. We assist clients throughout Mankato, MN, and all of Southern Minnesota, ensuring they fully understand their bankruptcy options and achieve their best possible outcomes. Contact us today!

Don’t embark on your bankruptcy path without our professional team at your side. Contact Behm Law Group, Ltd. today and start your journey out of bankruptcy.

Why Chapter 13 Bankruptcy? Advice from Behm Law Group

Mankato Bankruptcy Tips

Chapter 13 Bankruptcy, Behm Law Group, Mankato BankruptcyFor some people, Chapter 13 bankruptcy is the best option to consider when deciding which type of bankruptcy to file. While Chapter 7 bankruptcy discharges people from all of their unsecured debts, Chapter 13 allows you to renegotiate your debts into more affordable payments which you make over the next three to five years. Chapter 13 isn’t for everybody, but it just might be the right option for you. The experienced bankruptcy attorneys at Behm Law Group can help you decide which option is right for you.

Ineligible for Chapter 7

Not everyone is eligible for Chapter 7 bankruptcy. To be eligible, you have to pass the means test, which we have discussed in a previous post . However, Chapter 13 bankruptcy offers you some protection that Chapter 7 does not.

Protect Your Property

If you want to retain your property, such as a house or a car, you will want to file for Chapter 13. While Chapter 7 bankruptcy only discharges debt, Chapter 13 can allow you to reorganize your debt on secured property under much more favorable terms. Also, Chapter 13 allows you to protect property that you might not be able to keep in a Chapter 7 bankruptcy.

Protect Your Conscience

Even though they are in a bad situation through no fault of their own, some people feel guilty about filing for bankruptcy. They want to feel like they have kept their obligations. For these people, Chapter 13 provides the opportunity to reorganize their debt  into more manageable payments and may afford them greater peace of mind. 

We’re Here to Help

The bankruptcy attorneys at Behm Law Group, Ltd. are dedicated to helping people make these difficult decisions. We can help you decide whether Chapter 7 or Chapter 13 is best for you. If you need help deciding between Chapter 7 or Chapter 13, give us a call.