Famous Bankruptcy Frauds and Finding Permanent Debt Relief in Windom, MN

If you are facing debts you can’t repay, there are several options for individuals and businesses alike to permanently resolve those financial burdens. In many cases, filing for bankruptcy can be the most effective choice for people with common kinds of debt. For individuals, Chapter 7 and Chapter 13 are both very effective depending on the types of debt you hold, your income, and your ordinary, monthly living expenses. Behm Law Group, Ltd. attorneys offer expert legal advice and protection for individual consumers and businesses filing for Chapter 7, 12, and 13. We can work with you to determine if filing for bankruptcy will be the best way to find permanent debt relief in Windom, MN and the surrounding areas.

Bankruptcy Fraud

Since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was established in 2005, committing bankruptcy fraud has become more difficult. Three of the most famous cases of celebrity bankruptcy fraud after the BAPCPA was enacted were cases of tax evasion and asset hiding. Both illegal actions are common ways of using the bankruptcy process to deceptively protect assets while trying to obtain permanent debt relief.

Three famous cases attempted since the BAPCPA was passed in 2005 include:

  1. Lenny Dykstra: In 2008, retired MLB center fielder Lenny Dykstra filed a Chapter 11 bankruptcy case. His petition listed less than $50,000 in assets and $10 million to $50 million in debt liabilities. He was quickly found to have hidden and sold more than $400,000 in assets. He entered a plea deal in 2009 and was sentenced to six months in a federal prison, 500 hours of community service, and a restitution fee of $200,000.
  2. Joe and Teresa Guidice: In 2009, “The Real Housewives of New Jersey” star Teresa Guidice and her husband Joe Guidice filed bankruptcy. They reported over $10 million in debt and a liquidation auction was scheduled. They withdrew their petition before that date in 2010. In 2013, they were charged with conspiracy to commit wire, mail, and bankruptcy fraud, largely due to their failure to file tax returns for five years and their failure to report Teresa’s earnings from the housewives show. Teresa served 11 months in prison, and Joe completed his 41-month sentence in 2019. He is currently held in an ICE detention center awaiting deportation because he never acquired U.S. citizenship.
  3. Abby Lee Miller: Dance studio owner Abby Lee Miller (whose studio was featured in the reality show “Dance Moms”) filed a Chapter 11 case in 2010. She was quickly charged with bankruptcy fraud after assets she had hidden were discovered. Her charges also included perjury in court. Miller was sentenced to one year in federal prison, two years supervision after release, a $40,000 fine, and a $120,000 restitution fee.

Debt Relief

All these cases of fraud are extreme examples, but they exemplify some of the most common methods of asset hiding, tax evasion, and falsification of forms. To learn more about using bankruptcy for legal permanent debt relief in Windom, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Is Debt Consolidation an Effective Option for Debt Work-Out in St. Peter, MN?

In the U.S., there are several ways that individuals can resolve debts. Debt settlement through a third-party program is often aggressively advertised as the “best” way to work out debts, but that route comes with many caveats, including significant additional fees. Other debt work-out systems include debt management plans through a credit counselor, debt consolidation, and, of course, bankruptcy. While a bankruptcy case might not be the right choice for resolving everyone’s debts, making the decision to file a petition can be one of the most effective, fastest, and longest-lasting ways to find debt relief. If you’re looking for the best kind of debt work-out in St. Peter, MN and the local regions, Behm Law Group, Ltd. can help. Our attorneys will work with you to determine if bankruptcy will be an effective option and which type of bankruptcy chapter to file. We provide guidance, support, and legal protection for all our clients from the start of their cases to the end.

Debt Work-Out

Debt work-out systems outside of bankruptcy have their uses, but they’re also heavily restricted in the debts they address, the individuals that qualify, and the debt amounts that are resolved. For example, when it comes to debt consolidation, debtors can only qualify if they meet rather strict credit score requirements.

How Consolidation Works

Debt consolidation processes take your debts and combine them into a single account. That account is then paid off slowly with your own monthly payments, or you may have the option to receive a consolidation loan. A consolidation loan is provided through a bank, credit union, or online lender. Those loans usually range between $1,000 and $100,000 and carry interest rates as high as 36%. That loan amount is used to repay your consolidated debts, and you begin to payoff that lender in single monthly payments. The amount of your consolidation loan depends on your credit. If your credit is too low, you may not be eligible for a consolidation loan at all.

Consolidation Problems

Using consolidation for debt work-out is usually only a good option for people with high credit (usually 650 or better) and specific debts (like credit card debts, mortgages, and medical bills). Debt consolidation systems are very complicated. They frequently incorporate nuanced methods of debt treatment like balance transfer cards, conversion of unsecured debts to secured debts, and other “loop-hole” processes. These methods can carry significant hidden fees and often have unexplained and unintended consequences. In addition to using complex systems with inaccessible fine print, debt consolidation programs will impact your credit in varying ways depending on the amount of debt owed, credit history, and the various types of your credit accounts.  In addition, debt consolidation programs are often funded and sponsored by various credit card companies.  Credit card companies don’t want you to file for bankruptcy relief and they often want to squeeze as much money as possible from you through debt consolidation programs.

Overall, debt consolidation is a tricky process that might leave you with more fees and headaches than the filing of a bankruptcy petition.

To learn more about using bankruptcy for debt work-out in St. Peter, MN and why it might be better than debt consolidation, please contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Debt Relief in Jackson, MN Through Bankruptcy While Unemployed

Due to the pandemic, the past year has been difficult for many people. During the first shutdowns in the U.S. for the spring of 2020, the unemployment rate spiked from just above 4% to a staggering 15%. Over the following year, that number slowly decreased to around 6%. While that’s much better than 15%, things are still not back to normal. If you’re among that 6% of unemployed people, you might be finding it increasingly difficult to make debt payments on time. For those struggling financially, Behm Law Group, Ltd. can provide legal advice and guidance to file for bankruptcy and permanent debt relief in Jackson, MN. Even for unemployed individuals, bankruptcy can still be a viable option for debt resolution.

The bankruptcy code does not require bankruptcy filers to be employed, even for cases that are typically considered “wage earner” bankruptcy, like Chapter 13 reorganization. However, both your past and present income will affect your eligibility for certain chapters, and there are fees involved in bankruptcy that still need to be paid even though you’re only source of income is unemployment income.

That said, it’s still completely possible for unemployed individuals to find long-term debt relief through bankruptcy. In fact, many Chapter 7 filers are unemployed or are only employed part-time.

How Unemployment Affects Bankruptcy

The main aspect of unemployment and employment that affects bankruptcy is the question of income. To qualify for Chapter 7 bankruptcy, your debt-to-income ratio needs to be lower than the state median or average income of a similarly sized household. This ratio is determined through the Means Test, which examines your income from the past six months. That means if you recently became unemployed, you might not satisfy or pass the means test and be eligible for Chapter 7, even if your income has taken a nosedive.   However, even if you don’t pass the means test you might still be able to file for Chapter 7 bankruptcy relief if your recent job loss and loss of income is sufficiently explained in your bankruptcy paperwork.

If you don’t qualify for Chapter 7 with unemployment income, you can potentially file for Chapter 13 bankruptcy relief instead. Like with Chapter 7, much in Chapter 13 bankruptcy is dependent on your income. If you’ve been unemployed for a while, your Chapter 13 plan payments may be as low as $100.00 initially.  If you get another job and your income increases, your chapter 13 plan payments could increase.

Eligibility for either chapter all depends on the length of your unemployment relative to the past six months of your income.

Affording Bankruptcy While Unemployed

Bankruptcy court filing fees and the costs of an attorney might make it seem difficult to afford to file for bankruptcy on unemployment income. For those who can’t meet those costs, remember you can always apply to have some court filing fees waived, and there are many attorneys who offer sliding-scale prices for clients who are struggling financially.

Debt Relief

To learn more about finding permanent debt relief in Jackson, MN while unemployed, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

How Debt Settlement in Mankato, MN Works

Anyone who has faced difficulties with their finances or finds they have debts they can’t repay understands the stress and complications of that situation. The wish to resolve those issues as quickly and as effectively as possible is a natural reaction to preserve one’s quality of life. There are several options for finding debt relief available to individuals and businesses alike. While each debt resolution method has its pros and cons, some are more effective than others. Overall, bankruptcy is the fastest, most cost-effective, and the only permanent way to finding debt relief. Behm Law Group, Ltd. can help you file a strong bankruptcy case for long-term relief and financial stability. In particular, we want those in debt to understand how programs for debt settlement in Mankato, MN and the surrounding areas work and why they might not be beneficial.

Debt Settlement Process

Debt relief/debt adjustment/debt settlement programs are third-party negotiators who supposedly work with your creditors to resolve a debt for a lower amount than what you actually owe. In such programs, you’re typically required to pay the settled amount in a lump sum payment right away. Other arrangements may provide for the monthly payment of lower amounts over a number of years.

The settlement party is paid with a flat fee or on a percentage of your overall debt that they resolve. They are also sometimes paid with a percentage of the settlement amount that you pay. This means that even though you’re receiving some form of debt relief, significant additional fees can be involved to pay the debt settlement company in addition to the creditors.

While the settlement is negotiated, you’ll start to make monthly payments to the third-party program.  The settlement company will place those funds in an account. When a settlement is finalized, the creditor is paid a lump sum out of the account.

Problems With Debt Settlement Companies

The main problem with working through a third-party settlement program is the significant additional costs that are involved. The fees paid to the debt settlement company average from 15% to 35% of the original or negotiated debt. These fees are usually first paid in full before any work is done for you.  This can add up quickly, and the amount of the settlement fees is always much higher than the cost of a bankruptcy attorney and bankruptcy court filing fees.

Another major issue is that settlement providers may require you to stop making payments to creditors while a debt is negotiated. This causes your credit standing to drop with each missed payment.

Settlement programs also take four to six years to resolve a debt negotiation (versus the three to four months of a liquidation bankruptcy case), and programs only handle specific debts. Bankruptcy addresses a much broader range of debts.

Another major problem is that you are taxed on any debts that are settled for you by the debt settlement company.  For instance, if you owe Discover Card $10,000.00 and the debt settlement company settles the debt for $3,000.00, the $7,000.00 that is not paid is taxed against you as ordinary income.

Another significant negative is that a creditor with whom a debt settlement company settles a debt will sell the portion of the debt that was not paid to a third-party debt purchaser.  Thus, the term “settlement” lavishly employed by debt settlement companies is a half-truth at best and an outright lie at worst.  For instance, if you owe Discover Card $10,000.00 and the debt settlement company “settles” the debt for $3,000.00, Discover Card will sell the remaining $7,000.00 to a third-party debt purchaser for 10% to 20%.  The third-party debt purchaser will then start collection activities against you for the remaining $7,000.00.

To learn more about the benefits of bankruptcy and the problems with debt settlement in Mankato, MN, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Unemployment, Bankruptcy, and Debt Relief in Worthington, MN

Since the beginning of 2020, the United States has gone through a crisis unknown since the 1918 influenza pandemic spread throughout thousands of communities. The coronavirus not only created a huge public health issue, but it also resulted in many social and economic problems. The economic impact of the COVID-19 pandemic happened for many reasons. The state-mandated shutdowns and overall pause of nonessential operations was a large part of that impact, but many other trickle-down effects added to the nuanced conditions of today’s current economic situation. One way to look at the ways our country has coped with the unprecedented economic changes is to examine the patterns of unemployment and bankruptcy from 2019 to 2020. If you are among the many still struggling with debt and financial instability from the past year or any time before that, Behm Law Group Ltd. can help you file a strong bankruptcy case for long-term debt relief in Worthington, MN, and the surrounding areas.

Bankruptcy is a court-enforced and court-administered process that legally provides for the discharge or the reorganization of your debts. A bankruptcy case works to provide a level of fairness to all parties involved by significantly leveling the economic playing field for bankruptcy filers.  Bankruptcy allows bankruptcy filers to not only discharge their creditors’ claims but also significantly modify the terms of payment such as reducing interest rates, reducing amounts of debt, etc.  A bankruptcy case also provides fairness to creditors because creditors are still paid but are simply paid under adjusted terms.

While some impacts of COVID-19 on our economy were predictable, others were more unexpected.

Bankruptcy 2019–2020:

Two of the most important reasons why bankruptcies decreased during the COVID-19 pandemic were the federal stimulus checks and increases in federal unemployment benefits. In December 2019, bankruptcy cases were hitting a low point of around 53,000 nationally (both business and personal). Just before the real effects of COVID-19 in the United States hit home, March 2020 bankruptcies spiked by about 10,000 to around 62,800. This kind of increase typically occurs in the beginning of a year due to many aspects, but often is most attributable to the after-effects of holiday spending. By the time the pandemic was causing national shutdowns, the U.S. government had begun to issue stimulus checks, and debt, rent, utility, and other providers/creditors were offering more lenient repayment terms. At that time (April–May 2020) bankruptcies dropped dramatically to around 38,500.

Unemployment 2019–2020:

From February 2019 to February 2020, unemployment rates hovered at around 5.7 million U.S. citizens. From March to April of 2020, that number jumped up to over 23 million. The increase was almost entirely due to stay-at-home orders, but many people also lost their jobs because their employer couldn’t sustain a temporary shutdown and had to close its business permanently. After the country began to open up again in July 2020, unemployment rates decreased rapidly to around 16.3 million.

This general overview of bankruptcy and unemployment throughout the pandemic is basic, but it provides some indication of what can happen during such a difficult financial time. If you are still facing difficulties with your finances, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com for more information about bankruptcy and debt relief in Worthington, MN.

Issues with Debt Management in Fairmont, MN: Requirements for Involuntary Bankruptcy

Bankruptcy is a process available to individuals and businesses alike. If you’re struggling to meet monthly payments on time and debts are piling up, you can choose to use bankruptcy for long-term debt relief. The majority of individual consumer and business bankruptcies are filed voluntarily. If the filer is ready to pay the required bankruptcy fees and ideally is also able to pay for legal representation, they will file a voluntary case that is appropriate for their debts and incomes. However, there are instances when bankruptcy cases are involuntary. If you’re considering filing for voluntary bankruptcy to help with long-term debt management in Fairmont, MN, Behm Law Group, Ltd. can help.

Involuntary bankruptcy for individuals or businesses work similarly. If creditors bring involuntary bankruptcy legal proceedings to the court, you can be forced into a case that will work its way through the resolution of debts, for better or worse for any party involved.

An involuntary bankruptcy case occurs when creditors can prove that a debtor is able to repay their debts and is choosing not to do so for some reason. Creditors may believe they will not get repaid if an involuntary bankruptcy is not initiated.

Because debtors who can repay debts but choose not to often have value in nonessential assets that could be sold, involuntary bankruptcy cases are typically filed against businesses due to their more complex financial circumstances. There are several requirements that must be met before an involuntary bankruptcy can be filed.

Some of the main requirements for involuntary bankruptcy include:

  • The case to be filed must be a Chapter 7 liquidation (individual or business) or a Chapter 11 reorganization (business)
  • Involuntary bankruptcy debtors cannot be nonprofit organizations, family farmers or fishers, banks, credit unions, or insurance agencies
  • Creditors filing must have a claim against the debtor that isn’t “contingent as to liability or the subject of a bona fide dispute as to liability or amount.” Whether a claim is part of a bona fide dispute varies greatly from case to case
  • The debt load owed must be at least $16,750
  • Creditors must be able to prove that the debtor is able to repay their debts
  • If a debtor has fewer than twelve creditors for debts that will be handled in the bankruptcy, just one creditor needs to file for an involuntary bankruptcy proceeding
  • If a debtor has twelve or more creditors, at least three creditors must each participate in the filing of the involuntary bankruptcy proceeding
  • Debtors must respond to an involuntary bankruptcy filing within 21 days before the proceedings start.

Debtors that have an involuntary case filed against them do have the option to convert it into a voluntary case.

To learn more about involuntary bankruptcy proceedings and debt management in Fairmont, MN and the surrounding area, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Healing from Physical and Mental Effects with Debt Relief in Worthington, MN

Anyone who has had trouble making payments on time for bills or debts knows the severe stress and anxiety this type of situation can cause. While the saying “money can’t buy happiness” may be true, those who have experienced financial difficulties know that having a reliable income will free up a lot of emotional, mental, and physical space for other emotionally healthy aspects of life. Unfortunately, over 10% of the U.S. population was living below the poverty line in 2019, and since the difficulties many faced during the 2020 coronavirus pandemic, that level is projected to rise to 13.7% in 2021. If you’re facing financial stress because of sudden or accumulated debts, finding positive debt relief will alleviate many negative physical and mental effects money troubles can have on your wellbeing. At Behm Law Group, Ltd., we help individuals and small businesses find long-term debt relief in Worthington, MN and the surrounding area through bankruptcy.

Bankruptcy may carry a stigma for the temporary damage it can do to your credit, but that impact is greatly outweighed by the permanent benefits it provides. For thousands of American households and businesses each year, bankruptcy provides long-term debt relief and effective financial education through credit counseling and debt management assistance.

Debt relief through bankruptcy alleviates the significant mental and physical health effects that financial struggles can have on your wellbeing, including:

  • Stress and Denial: No matter what your own general health conditions are, debt puts stress on your whole life. Not being able to pay that debt exponentially increases that stress. With stress comes many other effects, from digestion and blood pressure issues to anxiety and panic. Many will also deal with this stress through denial, which often increases financial instability and depression.
  • Regret and Anger: Owing a lot of debt can also have a lot of social stigma. Everyone handles this unnecessary and harmful stigma differently, but the most frequent negative reactions are regret and anger. Experiencing regret for having incurred debt you can’t repay may cause someone to make even more poor future financial decisions and may cause someone to have an unhealthy fear or paranoia about one’s finances in general. Filing for bankruptcy not only provides debt relief but also helps individuals learn more about how to manage their finances successfully and in a healthy and productive manner going forward.
  • Anxiety and depression: While stress, denial, regret, and anger all affect your life and health in many ways, those emotions and others caused by debt can also result in anxiety or depression. Anxiety and depression are more common than many realize. In several studies, more than 50% of those who reported having financial difficulties also suffered from anxiety and depression.

Compared to other questionable and fraudulent non-bankruptcy debt relief options like so-called debt consolidation, debt settlement, or debt assistance programs, bankruptcy is significantly more effective for treating financial instability with long-term positive results. To learn more about how Behm Law Group, Ltd. can help you work through bankruptcy for debt relief in Worthington, MN and the surrounding area, contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

 

Why Bankruptcy is Better for Debt Relief in Windom, MN Than a “Debt Relief Program”

There are a few options available for those struggling to make debt payments on time. One is to work directly with your creditors to find some kind of agreement to reduce your debt or negotiate lower temporary payments with a future lump sum. Another is to work through a debt consolidation, settlement, or resolution provider and pay them to work with your creditors on your behalf. You can also choose a route through the U.S. legal system and file for bankruptcy. For anyone straining to repay debts, one of these choices may be better suited than others, depending on their circumstances. At Behm Law Group, Ltd., we never recommend working with a debt relief program. Not only are these programs limited in the type of debt relief they can provide in Windom, MN, but they’re also extremely costly and highly detrimental to credit scores. While bankruptcy also has its costs and can impact your credit, it’s almost always a better option for those with multiple types of debts they can’t repay.

Debt relief programs like the U.S.’s largest, Freedom Debt Relief®, may seem like an easier path than going through the process of filing for bankruptcy. In reality, however, these programs tend to prey upon debtors who are unfamiliar with all their options or have outdated perceptions of the social implications of bankruptcy.

While debt relief programs might look good on the surface, and they certainly make an effort to advertise the “benefits” of choosing debt settlement, consolidation, or resolution with their services, potential customers of any relief program should make every effort to read the fine print before choosing.

 

Fine Print of Debt Relief Programs

  1. Debt relief programs are expensive. Program fees range from around 15% to 35% of the debt that’s being negotiated. That may not seem too large of a fee, but it’s taken out of every debt handled. If you have, for example, the debts that Freedom Debt Relief says is the average they handle ($25,000 across multiple credit lines), you will pay them between $3,750 and $8,750. With those same unsecured debts, you would have a Chapter 7 bankruptcy court filing fee of around $338.00, and a flat rate attorney fee of between $1,000 and $1,750.
  2. Debt relief programs take a long time. Freedom Debt Relief says they handle cases in a two- to four- YEAR-LONG time frame. Chapter 7 bankruptcy takes as little as three to four months. Additionally, debt relief programs typically extend the period you will spend repaying the debts they negotiate up to five years and even longer.
  3. Debt relief programs only handle specific debts. Generally speaking, debt relief program customers only have their credit card and medical bill debts negotiated. In contrast, bankruptcy handles those debts in addition to mortgages, car loans, tax debts, debts related to any other properties, and many others.

When you consider these facts, it’s clear that filing for bankruptcy is a less expensive, faster, and much more effective option. More importantly, with regard to your credit record, bankruptcy has a much more positive overall impact that debt relief programs.  With bankruptcy, your credit rating will fall but there will be a floor from which it will start to rehabilitate immediately after your case is filed.  With so-called “debt relief programs”, your credit rating will be negatively impacted every month for several years and there will be no chance for the rehabilitative process to start.

To learn more about why it makes sense to use bankruptcy for debt relief in Windom, MN and the surrounding areas, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

 

Adversary Proceedings vs. Contested Matters for Debt Relief

Each year, thousands of U.S. households struggle with debt, and while a very few will eventually find ways to overcome that debt, most people will not. For those who know they will be unable to repay their debts, filing for bankruptcy is an effective option to resolve their debts permanently and without the threat of wage garnishment, creditor harassment, and foreclosure. Filing bankruptcy to discharge your debts provides a government-sanctioned process that provides permanent debt relief that is enforceable by law. At Behm Law Group Ltd., we help clients work through Chapter 7, Chapter 12 and Chapter 13 bankruptcy filings to find effective, long-lasting debt relief in Mankato, MN, and the surrounding area.

 

No matter what chapter you file, bankruptcy can be a detailed and nuanced process that requires the sharing of your current financial information with a third party. Your petition will need to include all of your debts— even ones that you want to keep—your income sources, your properties, and virtually all other aspects of your financial situation. The bankruptcy petition that you complete with your attorney is something that you sign under oath.  You make the representations in your bankruptcy petition subject to penalty of perjury.  Creditors rely on the accuracy of those representations.  The trustee administering your bankruptcy case relies on the accuracy of those representations. The bankruptcy court itself relies upon the accuracy of those representations.  Bankruptcy is an “on your honor” proceeding.  When you file bankruptcy, no one comes knocking on your door and invading your residence to see what you own.  However, it is vital and incumbent upon you and your attorney to make a good faith and detailed review of your financial circumstances and to make sure that the bankruptcy petition is completed as accurately as possible.  The willful failure to correctly complete your bankruptcy paperwork may result a dismissal of your case, at best.  At worst, the making of an intentionally false statement, concealing property or obtaining money or property by fraud in connection with a bankruptcy case can result in fines up to $250,000.00, or imprisonment for up to 20 years, or both.

 

The reason the court needs such detailed information is to:

  1. determine if you qualify for bankruptcy;
  2. correctly evaluate how to handle your case;
  3. work through each debt with respect to how creditors will be repaid or discharged; and
  4. avoid difficulties like contested matters and adversary proceedings.

 

In your particular case, there may be issues brought to the court from the trustee, bankruptcy judge, or one of the creditors involved. These issues could be presented either as contested matters or as adversary proceedings. Both will extend the duration of your case and both can cost you more money the longer they are left unresolved.

 

Adversary Procedures

These contests are lawsuits within a bankruptcy case typically brought to the court by creditors who want to have a discharge of a particular debt revoked, denied or otherwise objected to, creditors who are hoping to recover money or property from parties other than the bankruptcy filer, or creditors who wish to stop some other court action related to your case. Although it’s related to your case, an adversary proceeding is a separate and distinct matter.

 

Contested Matters

Contested matters are similar to adversary proceedings, but they are not proceedings that are distinct and separate from your case. Creditors or other parties can bring contested matters in a case by filing a motion that requires the court to make a ruling based on a particular matter. Contested matters are often resolved more quickly than the resolution of adversary proceedings, but they will still extend the duration of your case and you still likely will have to pay your lawyer more money to assist you in resolving them.  The court will usually consider lifting the automatic stay, objecting to a creditor’s proof of claim, or objecting to a proposed chapter 13 repayment plan as contested matters.

 

 

To learn more about adversary procedures, contested matters, and how bankruptcy can provide permanent debt relief in Mankato, MN, and the surrounding region, call Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.

Part Two: Utility Bills and Debt Relief This Winter

This is the second part of a blog series covering frequently asked questions concerning utility bill debts and bankruptcy. The first part can be found here. Utility debts occur when you miss monthly utility payments for any period of time. As an unsecured debt (a debt that does not have collateral – secured by any property), it is always fully discharged in an individual consumer bankruptcy case. Because of that, bankruptcy is one of the best options for finding relief from utility bill debt and other unsecured debts like credit card balances and medical bills. At Behm Law Group Ltd., our attorneys are dedicated to helping households work through Chapter 7 or Chapter 12 or Chapter 13 bankruptcy cases to receive permanent, effective debt relief in Mankato, MN, and the surrounding communities.

While filing for bankruptcy relief will be denoted on your credit profile for a limited period of time (usually 5 to 7 years), the benefits almost always outweigh the potential negatives because your debts will be fully discharged in bankruptcy. Utility bill debts are debts that are handled in bankruptcy, and if you owe those debts, filing for bankruptcy can also stop your utility services from being shut off and keep creditors from harassing you. These are some of the more frequently asked questions about how utility debts are handled in bankruptcy.

When is filing for bankruptcy not enough to prevent service shut off?

Although the automatic stay injunctive mandates of 11 U.S.C. §362 are immediately imposed upon all creditors when you file your bankruptcy petition, there are still some steps that you must take to stop possible utility service shut off. In your petition paperwork, make sure your utility bill debts are listed in the correct section. Listing those unpaid bills as debts will allow the bankruptcy court to notify your utility providers of your bankruptcy filing and prevent service shut-off. Within 20 days of filing, you must also show your utility provider that you will be able to pay your utility bills that are incurred and come due after the date that your bankruptcy petition is filed. This proof is called “adequate assurance.”

What is “adequate assurance?”

Adequate assurance is a good faith measure of proof to your provider that you will be able to pay your future utility bills. This proof can be offered in several different forms, including letters of credit provided by a lender, security deposits (much like a damage deposit with a landlord if you’re renting an apartment), certificates of deposit, prepayment, surety bonds, or another type agreed on by you and your utility provider.

What happens if my provider doesn’t accept my offer of adequate assurance?

If you and your provider don’t agree on a form of adequate assurance, you can request the bankruptcy court to order your provider to accept that assurance. The bankruptcy judge may also order you to modify the form or amount of the assurance deposit.

Utility bill debts are stressful, especially when service shut-off is a threat during the colder months. If you’re struggling financially, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information about bankruptcy and debt relief in Mankato, MN.