The Role of a Property Lien in Bankruptcy in St. Peter, MN

If you’re considering filing for bankruptcy, you should understand that you must not only fully disclose all property that you own either entirely or in which you have any partial ownership interest but also provide your attorney sufficient documentation substantiating any such ownership interests/claims.  You must provide your attorney with copies of all titles, deeds, real estate mortgages, life insurance policies, retirement account documentation, homeowner’s insurance policy information, vehicle loan promissory notes, financial statements, tax assessment statements, tax returns, copies of judgments and all other like documentation.  Generally an attorney will require you to provide your financial information for the past 3 years. This means you’ll have to provide all personal records along with your public records. Because gathering your financial information correctly can be difficult without experience and legal knowledge, the help of a bankruptcy attorney is essential. Behm Law Group, Ltd. offers professional legal support and counsel that can help you throughout the process of filing for bankruptcy in St. Peter, MN.

While you gather your personal records for your attorney to consider in relation to your case, you should also consult with the local court administrator’s office, court recorder’s office and county tax assessor’s office to examine any public records you may have against you. Records such as deeds, county tax assessor valuations for any real estate you own, judgment liens and title certificates for vehicles are public records.

Another example of a public record of your financial history is a property lien or mortgage lien.

What is a Property Lien?

Property liens are a matter of public record and they legitimize and provide notice of the claim your creditor has on your property to secure the money you owe to that creditor.  It is used by a creditor to provide public notice to other creditors that it has first secured standing on certain property you own.  In other words, it is announcing to all other creditors that it is first in line to collect its debt against the property.  For example, if there is a mortgage on your home regarding money you owe to a bank, the mortgage will be publicly listed in the county recorder’s office.  Any other bank who may want to lend you money will search the county recorder’s office and see the property lien to the first bank.  Any such bank will understand that it will not be able to utilize your house as collateral for any financing it extends to you to the detriment of the first bank.  If it does elect to extend financing to you and if it does want to use your house as collateral, the property lien to the first bank will provide the second bank notice that it will be second in line to the first bank if you default on your payments and it proceeds to initiate foreclosure proceedings against your house.  Liens work to protect a creditor’s claim on the property if you file for bankruptcy relief. A properly filed property lien is enforceable against any and all parties in a bankruptcy proceeding.

A bankruptcy filing does not extinguish the creditor’s property lien.  If you want to retain your house through a bankruptcy proceeding, you must continue to pay on any outstanding property liens against it.  Any equity or value above the amount of any property liens can be protected from your creditors, however.  For instance, if your house is worth $100,000 and you owe $20,000, you have $80,000 worth of value or equity.  You can protect the $80,000 equity/value against all of your creditors and against the bankruptcy trustee but you must still pay the underlying $20,000 to the bank that holds the property lien.  If you don’t pay the underlying $20,000 property lien, the bank that holds the property lien can still initiate foreclosure proceedings against your house.

With the help of a bankruptcy attorney you can easily access public records concerning your finances to determine if you have any property on which your creditors have claimed property liens. It’s important to be aware of any liens on your property, especially if you’re filing for Chapter 7 bankruptcy.

For more information about property liens and to learn how Behm Law Group, Ltd. can help you file for bankruptcy in St. Peter, MN, contact us at (507) 387-7200 today.

Preference Claims and Transfers with Chapter 7 Bankruptcy in Marshall, MN

In most cases, individuals and small businesses fight against filing for bankruptcy until it becomes clear that it is the most sensible option. In many cases, before the decision to file for bankruptcy is made, the filer attempts to meet or repair debts in many ways. Payments or money transfers are common occurrences before bankruptcy petitions are filed, but in some situations, those transactions might be reversed after your case is filed. Behm Law Group, Ltd. offers legal advice and assistance to help you understand how your case will unfold when you file for Chapter 7 bankruptcy in Marshall, MN.

In a Chapter 7 bankruptcy case, the bankruptcy trustee is a fiduciary for creditors and the trustee is obligated by the bankruptcy code to ensure that the person filing for bankruptcy is forthright and honest and that he or she has listed all of his or her creditors and listed all of his or her assets. The trustee is also tasked with making sure that the process is fair for all creditors and making sure that all creditors are treated equally.

One responsibility of a trustee in the trustee’s role of making sure creditors are treated fairly and equally is to identify and recover any preferential transfers in a bankruptcy case.

Preferences 

If you have multiple unsecured creditors (creditors that do not have collateral securing the debts) in your case and, within the ninety days prior to the filing of your case, you have made payments or transfers to any one creditor totaling $600.00 or more, this is considered an avoidable preference.  This means that you have preferred one similarly situated creditor over another creditor who may not have received any payment.   If a trustee finds that you preferred one creditor over another, the trustee will be obligated to avoid the preference by demanding a refund of what you paid from the preferred creditor.  The trustee will then distribute that amount equitably among all of the similarly situated creditors.

Preference claims can either be voluntary payments you made or involuntary garnishments from your pay checks or bank accounts. For creditors labeled “insider creditors”, such as your friends or family, any payments totaling $600.00 or more made within a year of the date that your case is filed will be deemed a preference.  If you pay a friend or relative more than $600.00 within a year before your case is filed, the trustee can and will demand a refund and disburse it among all creditors.  For other creditors, such as credit cards and medical debts, known as “arms-length creditors”, payments of more than $600.00 within ninety days before your case is filed will be deemed preferential.

Strong Arm

To reverse any claims deemed to be preferences, the trustee has the right to use his or her “strong arm” powers under the bankruptcy code and undo the transactions.

If you suspect you may have made a preference payment, or if you have other concerns about your situation, you should not try to undo or reverse it.  Behm Law Group, Ltd. can help you throughout the process of filing for Chapter 7 bankruptcy in Marshall, MN. For more information, please contact us at (507) 387-7200 today.

Bankruptcy in Owatonna, MN, Since 2005

As with all departments of US legislation, bankruptcy is an ever-changing legal process. Because the status of finances and the economy are rapidly transforming with the development of new technology, new energy, and new ways to spend, save, and make money, the laws that govern how debt is handled must change accordingly. Since 2005 the laws, standards, and procedures of bankruptcy have changed significantly. If you’re considering filing for bankruptcy in Owatonna, MN, it’s important to understand how bankruptcy law works today. Behm Law Group, Ltd. provides the legal advice and assistance necessary to successfully navigate bankruptcy.

The most recent changes made to bankruptcy law came in 2005 when Congress amended the bankruptcy code for purposes of determining how consumer households file for Chapter 7 bankruptcy and how Chapter 13 repayment plans are structured. These changes included the following.

Means Test and Income Measurement

 Before the 2005 overhaul, individual filers could choose the type of bankruptcy that worked best with their situation (in their or their lawyer’s opinion). This allowed filers with high incomes to benefit from Chapter 7 bankruptcy in a way that was perceived to be unfair to creditors.  Namely, Congress believed that people with higher incomes could enter into a Chapter 13 repayment plan and pay at least something to their unsecured creditors. Today, all filers are required to take the Means Test to analyze their income for the 6 month period prior to the month in which their bankruptcy petition is filed. The bankruptcy code requires an attorney to add up all of a filer’s gross income for the pre-bankruptcy filing 6 month period and then determine an average.  Then, the bankruptcy code requires an attorney to multiply the average by 12 to determine what a filer’s yearly projected income is and analyze it against the state average income for a household of the filer’s size.  If the filer’s income is in excess of the state average income for a household of the filer’s size, then the person would probably have to file a Chapter 13 instead of a Chapter 7.  For instance, presume a single person needs to file for bankruptcy relief and that he or she earned gross monthly income of $5,000.00.  Presume further that the state average income for a household of 1 in Minnesota is $52,785.00.  The bankruptcy code would require the attorney to add up the $5,000.00 for the preceding 6 months which would be $30,000.00.  Then, the bankruptcy code would require the attorney to determine the monthly average which would be $5,000.00 ($30,000.00 divided by 6).

Next, the bankruptcy code would require the attorney to multiply that average by 12 which would be $60,000.00 to determine the filer’s yearly projected income.  Since the $60,000.00 would exceed the state average income for a household of 1 in Minnesota of $52,785.00, the filer would probably be required to file a Chapter 13 bankruptcy because he or she would not have passed the Means Test.  The monthly income average is measured against some expenses and payments of some debts, so it’s still possible for filers with a high income to qualify for Chapter 7. If a filer doesn’t qualify for Chapter 7 and must instead file for Chapter 13, the expenses of a household are still subtracted in the total of disposable income that must be used to repay creditors through a Chapter 13 repayment plan.

Credit Counseling

Another notable change made with the 2005 bankruptcy overhaul was the requirement of all filers to undergo credit counseling before a petition is filed. The United States Trustee office must also approve the counselors who offer this service. This is necessary requirement irrespective of whether you file for Chapter 7 or Chapter 13 bankruptcy. A counselor may offer an advisable repayment plan in cases of Chapter 13 bankruptcy, but filers are not obligated to follow those plans.

These changes made in 2005 were also accompanied by several other minor details but overall, they were designed to create a situation of fairness for all parties involved in a bankruptcy case. For more information about the changes made or for help with filing for bankruptcy in Owatonna, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

How Your Trustee Benefits When You File for Bankruptcy in Luverne, MN

Understanding government and legal positions is a complicated business. The role of an employee and how they are compensated varies widely from position to position and department to department. Bankruptcy trustees are not employed by the United States Department of Justice.  However, they are private attorney’s appointed by the United States Department of Justice and assigned to bankruptcy cases through the United States Trustee Program.  Working with the bankruptcy trustee assigned to a particular bankruptcy case can often be nuanced. Behm Law Group, Ltd. works with both our clients and the bankruptcy trustees to successfully handle bankruptcy cases in Luverne, MN.

The help of a bankruptcy firm and attorneys such as those here at Behm Law Group, Ltd. is often key to meeting the optimal outcome in a bankruptcy case. Your bankruptcy trustee is responsible for administering your bankruptcy estate.  The bankruptcy estate is a legal entity separate and distinct from the person filing for bankruptcy relief.  It consists of any property that you are not able to keep or exempt in your bankruptcy case.  In chapter 7 cases, trustees sell or liquidate any non-exempt assets and use the proceeds to pay something to your various creditors.  Not only do they work to distribute any liquidated assets in a Chapter 7 case to your creditors, they also work with you and your creditors in a Chapter 13 case.  In a Chapter 13 case, you make one monthly payment (a payment that you can afford that is determined with the supervision of the trustee) to the chapter 13 trustee, pursuant to a restructured debt payment plan, every month for 36 to 60 months.   The chapter 13 trustee then splits that payment up among your various creditors each month for 36 to 60 months.

Additional responsibilities of a trustee are numerous, but in short, they work to oversee your case, detect fraudulent behavior with all parties involved, and ensure accuracy.

A trustee’s compensation can depend on several situations within a bankruptcy case.

Chapter 7: In a Chapter 7 case, your bankruptcy trustee takes a $60.00 fee from the $335.00 filing fee you pay to the court. If you have no assets, that’s all your trustee will receive from your case. If you do have assets, your trustee receives percentage from the collected amount after non-exempt assets are liquidated and before anything is paid to your creditors. The amount taken is determined by a sliding scale, under 11 U.S.C. §326. For the first $5,000.00 collected by a trustee, the trustee will take 25%. For the next $45,000 the trustee will take 10%, and for the following $950,000 the trustee will take 5%. For anything collected by the trustee that exceeds $1 million dollars, the trustee would take 3%. Trustees can also recover costs from the bankruptcy estate with court approval.

Chapter 13: In a Chapter 13 case, your repayment plan decides the amount of your trustee’s compensation. In all cases, your trustee cannot take more than 10% of all total payments in your plan. For instance, if your chapter 13 plan payment is $500.00, the trustee would receive $50.00 of every payment you make.  Most trustees handling Chapter 13 cases are also paid a yearly salary through the federal government.

It’s important to understand the function and duties of a trustee.  Having an attorney on your side can help you understand this. If you’re considering filing for bankruptcy in Luverne, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

The Difference Between Disposable Income and Discretionary Income During Your Repayment Plan With Chapter 13 Bankruptcy in Windom, MN

A common misconception about bankruptcy is that it’s a financial endgame, halting aspects of your economic and personal life.  With Chapter 7, however, your finances are given a fresh start, free from most debts you faced before filing. With Chapter 13 your options are even broader to keep your life as unaffected as possible throughout the case. When you file for Chapter 13 bankruptcy in Windom, MN, especially with the help of Behm Law Group, Ltd., you can easily integrate your bankruptcy case and repayment plan into your everyday finances.

Chapter 13 bankruptcy is designed to offer you a fresh way to handle your debts while keeping the situation fair to you and your creditors alike. With the system of reorganizing your debts that Chapter 13 provides, you can keep your financial situation manageable and still provide your creditors with the debts they are owed. During the structuring of a Chapter 13 repayment plan, your income is broken down into two basic types: discretionary and disposable.

Disposable Income

With any household, certain amounts of the total income from wages are taken automatically from paychecks and salaries as income taxes. After income tax requirements are met, remaining net income values are considered disposable income. This income can be used for any household necessities and payment obligations such as loan installments and rent.

Discretionary Income

After all household necessities and financial obligations outside of income taxes are met, the remaining income amount is considered discretionary income. This amount can be used to save, spend, or invest based on the household choices.

For example, if you make a salary of $85,000 and you file “Married Joint” on your tax forms, you will have an income tax percentage of 7.85% in the state of Minnesota. That means you will have a disposable income amount of $78,327.50. If you take 75% of that to pay bills, purchase food, fill your gas tank, and meet any other debts and tax requirements, you will have a remaining discretionary income of $19,581.87. You can choose to save, spend, or invest that amount as you wish.

Discretionary vs. Disposable in a Repayment Plan

These described options for disposable incomes and discretionary incomes are viable in a household that is not currently filing for Chapter 13 bankruptcy. How these incomes are treated in a household working through a Chapter 13 repayment plan period are very different. After income taxes and basic household necessities are met, your discretionary income is considered your only disposable income. In a Chapter 13 repayment plan, you must dedicate all your remaining disposable income to paying back your unsecured creditors.

To determine what your disposable income amount may be and to find out more information about the structure of repayment plans with Chapter 13 bankruptcy in Windom, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Understanding Executory Contracts During Chapter 7 Bankruptcy in Pipestone, MN

If you’re considering filing for bankruptcy and your financial obligations outweigh your income, it’s likely you’ll qualify for Chapter 7 bankruptcy. This form of bankruptcy allows you to liquidate your assets to repay creditors and discharge certain crippling debts. The benefits of Chapter 7 bankruptcy can be significant.  Some who need to file for bankruptcy may have certain legally binding contracts in their name, such as a vehicle lease or a lease for the purchase of real estate (i.e. a contract for deed). Behm Law Group, Ltd. can help you determine how these different contracts will be treated during a petition in Chapter 7 bankruptcy in Pipestone, MN.

One kind of legal contract commonly considered during a bankruptcy case is an executory contract.

What is an executory contract?  

A lease or other contract that is active during the filing process and to which parties are still obligated is titled as an executory contract in a bankruptcy case. These contracts are different from other kinds of legal documents under the filer’s name, such as a vehicle loan, mortgage or tax debt, and they are treated differently during a Chapter 7 bankruptcy case.

Some common examples of executory contracts include car leases, apartment leases, long-term rental agreements, business contracts, real estate sale contracts, insurance agreements, timeshares, and docking agreements.

The main difference between an executory contract and other types of contracts during liquidation bankruptcy is that the agreement is current and in effect.

What happens during Chapter 7 bankruptcy?

Because an executory contract is in effect at the time the filer petitioned for Chapter 7 bankruptcy, it must be addressed during the case with a decision that will be beneficial for the filer and for the creditors. This decision can be made by your bankruptcy trustee, if there is equity or value in the executory contract (i.e. if the value of the contract exceeds any debt or other obligations associated with it).  If there is no value for the trustee, she would abandon the executory contract and you would make this decision.  Basically, either the trustee or you can choose one of two options: assume or terminate. If the executory contract is assumed, you or the trustee would be obligated to continue making payments on that contract, unless it is sold to another party. However, because there may often be no equity or value to the executory contract, it’s more often the case that the executory contract will be terminated. If the contract is terminated, the owner will repossess any leased property and you’ll no longer be obligated to make any payments.

If you’re in current binding contracts or leases and would like to know more about how they’ll be treated during a Chapter 7 case, contact Behm Law Group, Ltd. at (507) 387-7200 for information about filing for Chapter 7 bankruptcy in Pipestone, MN.

Judgment Creditors and Your Assets with Chapter 7 Bankruptcy in Mankato, MN

If your debts and financial obligations put you in a position where you may qualify for Chapter 7 bankruptcy, it’s important to consider that option before one or more of your creditors place a judgment against you in court. If you stall in meeting debts payments but refuse to use bankruptcy options to recover from heavy financial obligations, your creditors have options to take matters to court. At Behm Law Group, Ltd., we encourage you to use the system set in place by the United States Congress to your advantage and file for Chapter 7 bankruptcy in Mankato, MN, if you qualify before your debt obligations lead to a more drastic situation.

Bankruptcy is a complex system of laws in place designed to protect debtors from being unable to resurface from drowning debts. However, that system is also designed to protect creditors, and it offers them several ways of regaining debts owed to them from debtors who do not or cannot meet scheduled payments. One of those options is by acting as a judgment creditor to use the courts approval in regaining what is owed to them.

What is a judgment creditor?  

If your creditor files a successful lawsuit against you and receives a money judgment, that creditor becomes a judgment creditor. Creditors cannot place judgment against secured debts, but any unsecured debts and nonpriority debts are susceptible to a judgment creditor. That title allows a creditor to find information about your assets and offers them more collection techniques than a normal creditor. A judgment creditor can forcibly take up to 25% of your net wages, collect from your bank account and other deposits, repossess certain items such as motor vehicles, and place liens against your properties and assets.

How do they gain information about your assets?

If your creditor has kept records of your debt to them over time, it can often be simple for them to find out what assets and properties you hold. Loan applications to your creditor, for example, give information about your name, address, employer, and certain asset information. The DMV can also provide information to judgment creditors about your registered vehicles including boats, cars, and recreational vehicles. Any real estate you own can also be easily searched on public online records.

If you’re struggling with multiple debts, it may be just a matter of time before your creditors file judgments against you. Filing for bankruptcy before then might save time and money and reduce the stress of legal action taken against you. For more information and to find out if you qualify for Chapter 7 bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Doubling Exemptions With Chapter 7 and Chapter 13 Bankruptcy In Windom, MN

Many of the Chapter 13 and Chapter 7 cases we work with are either individuals or households filing for bankruptcy. For those struggling financially with debts accumulated over the years, bankruptcy is often a beneficial option. When it comes to a family in need of bankruptcy help, it can actually be a good thing for married couples to own joint property. Owning property with your spouse plays a big role in a household’s ability to double exemptions. Behm Law Group, Ltd. provides expert legal advice and assistance to help a household work with exemptions and petitioning for bankruptcy in Windom, MN.

Exemptions

Exemptions are allotted amounts that depend on variables like federal or state regulations and the total of a debt. You may apply exemptions to certain properties during the bankruptcy process to prevent some or all of the value of those properties to be used for debt repayment.

Using your exemptions during a Chapter 7 case can significantly increase the amount of your property you may keep. In Chapter 13, more exemptions equal less paid back to unsecured creditors during your repayment plan.

 Doubling

If you’re married, you might have the option of filing for joint bankruptcy with your spouse. A joint case, however, is only applicable if you have debts that are in both of your names, meaning you jointly owe a debt such as jointly obligated on a house mortgage. If you and your spouse both have your names on the assets that would be subject to the bankruptcy process, you can then double your exemptions on those joint assets.

Doubling your exemptions in a joint case means you and your spouse are each able to claim the amount you would claim as an individual filer. In Minnesota, filers are able to choose between federal exemptions and state exemptions, depending on their debt amounts and abilities to double an exemption.

For example: The Minnesota Motor Vehicle Exemption allows up to $4,600 of an for people who own motor vehicles. If you and your spouse are both listed on the title of a vehicle worth $9,200, you both have an ownership interest in and to that vehicle.  In order to protect and keep it in a bankruptcy proceeding each of you could assert your independent $4,600 exemptions and stack them together ($4,600 x 2 = $9,200) and protect the entire $9,200 value of the vehicle.

If you and your spouse are considering filing for bankruptcy in Windom, MN, keep in mind that you can jointly file and, if you both own the subject property/assets, double or stack your bankruptcy exemptions. For more information about your options with joint bankruptcy, contact Behm Law Group, Ltd. at (507) 387-7200.

Selling in Foreclosure and Automatic Stay in Chapter 7 Bankruptcy in Pipestone, MN

Owning a home with a mortgage is a major expense, and often, mortgage debts and foreclosure play a large part in filing for Chapter 7 bankruptcy. If you own a home and are having difficulty meeting mortgage payments, choosing to file might be the best course of action to recover from financial harm. Behm Law Group, Ltd. provides legal assistance to homeowners filing for Chapter 7 bankruptcy in Pipestone, MN.

If you’re facing foreclosure on your home, Chapter 7 bankruptcy can actually turn your troubles concerning mortgage debt around. However, that result all depends on a few things.

  1. Your home equity and Homestead Exemption: The method of Chapter 7 bankruptcy is to liquidate assets to repay your creditors and discharge debts. This process is much more complex in practice. In fact there are several steps in determining which properties can be liquidated and which debts can be discharged. Your home equity and the home exemption amount you can claim decide how your mortgage and home will be treated in Chapter 7.
  2. Your bankruptcy trustee’s commission: In cases where your home qualifies for liquidation in a Chapter 7 case, your trustee is incentivized with a commission from the sale. Starting with the difference of the sale against the debt owed, your trustee will take 25% on the first $5,000 made, 10% on the next $50,000, and 5% on the remainder below $1 million.
  3. How long Automatic Stay lasts: When you enter into the bankruptcy process, the court issues an automatic stay, which immediately prevents your creditors from collecting. If your home is in foreclosure, your debts will still be placed under the automatic stay for some or all of the time it takes to process your case. If your creditors press the court to lift automatic stay, you may be faced with continuing to make payments to them even while you’re in the process of filing for bankruptcy. However, if the automatic stay lasts for a month or two, you can still save a significant amount from keeping those monthly mortgage payments.
  4. If you will keep your home: Whether or not you will keep your home depends on the exemption you can claim and your unprotected equity. If your home is not in the situation to provoke liquidation, you can keep your home after bankruptcy, and if you negotiate terms with your lender before filing, you can change payments on your mortgage. If your equity and exemption amount trigger a sale, selling in foreclosure can also be beneficial because your mortgage debt will be discharged and you may gain tax advantages.

 *Determining your unprotected equity can be done with the following equation:

(Market Value of Home) – (Homestead Exemption) – (Trustee Commission) – (Cost of Selling the Home) – (Mortgage Debt) – (All Non-Mortgage Liens on the Home) = (Your Unprotected Equity)

For more information about how foreclosure affects your mortgage and home status during Chapter 7 bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Protecting Your Money and How Filing for Chapter 7 Bankruptcy in Owatonna, MN, Affects Your Bank Accounts

If you’re struggling financially, your debts and obligations may seem looming and unmanageable, but for many, the idea of bankruptcy is even more alarming. At Behm Law Group, Ltd., we find that many of our clients have had no reason to become familiar with the process of bankruptcy in the past and have unwarranted fears of how bankruptcy may impact them. If you’re balking over filing for bankruptcy because of an apprehension of negative side effects, let us help you. Bankruptcy is designed to help debtors regain their financial footing, and with Chapter 7 bankruptcy in Owatonna, MN, you can get the fresh start you need.

Many individuals hesitating at the thought of bankruptcy have worries about how the process will impact their credit and properties. For example, the fear of how your bank account will be handled is a common source of anxiety during bankruptcy.

These fears, however, are unnecessary nearly 100% of the time. In fact, for the vast majority of individuals filing for bankruptcy, a case in itself will not affect your bank accounts in any way. Checking, savings, and other types of bank accounts are left untouched in the typical individual consumer Chapter 7 bankruptcy case.

When Your Bank Account is Impacted

Although most of the time an individual filer’s bank accounts will not be touched during a bankruptcy case, there are a few unusual circumstances that may affect the status of an account or the value within. These circumstances include:

  • If a debtor has a total balance across all accounts that is greater than the exemption allowances they are allowed with which to protect property
  • If a debtor owes funds to the bank or credit union where their accounts are held
  • If a debtor owns accounts with banks or organizations that freeze accounts during a Chapter 7 case (e.g. Wells Fargo or Union Bank or Bank of the West)

Except for these uncommon circumstances, a Chapter 7 bankruptcy case does not generally impact bank accounts.

Protection with Exemptions

When filing for Chapter 7 bankruptcy in Minnesota, individual filers may choose to use state exemptions or federal exemptions. In the case where your bank account funds are not exempt from the process of liquidation, those funds are considered assets and are surrendered to the bankruptcy trustee. If your funds can be protected by an exemption, however, they will remain untouched during the bankruptcy case.

Exemptions that protect your bank account funds vary from case to case depending on how you choose to use certain transferable exemptions, such as the federal wildcard exemption.

The fear of losing the money in your bank accounts should not prevent you from filing for Chapter 7 bankruptcy in Owatonna, MN. For more information about how your bank accounts are impacted during the bankruptcy process and for bankruptcy consultations, contact Behm Law Group, Ltd. at (507) 387-7200 today.