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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.

 

 

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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.

 

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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.

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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.

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Why Small Businesses Aren’t Filing for Bankruptcy Now

Since the end of March and the height of the coronavirus shutdowns, small businesses and beyond have struggled to stay afloat. The benefits of stimulus packages and federal loans have helped many individuals and businesses keep their heads above water and even make a profit during months of decreased income. Unfortunately, most of the effects of the stimulus bills came to an end, and small businesses now need to decide what steps to take to protect themselves given current economic conditions. If you own a sole proprietorship or partnership business, you can use Chapter 13 bankruptcy to resolve debts without losing your business. With the help of Behm Law Group Ltd., you can work through that type of reorganization bankruptcy in New Ulm, MN, and the surrounding areas to file a successful case that will resolve your debts without liquidating your business operations.

Although sole proprietorship and partnership businesses can file for bankruptcy by rolling business debt into the owner’s personal debts, many other small businesses are not able to file because they would be restricted to Chapter 11 reorganization as they may have large amounts of debt and assets with significant values.

Both Chapter 13 and Chapter 11 function similarly to reorganize debts into a repayment plan. Filers will slowly repay debts included in the plan over several years. Many debts will be paid in full but under different terms as denoted in the plan. Other debts will receive payment for a finite period of time and only be partially paid. The remaining balances of those debts at the conclusion of the bankruptcy case would be discharged. While those businesses that qualify for Chapter 13 bankruptcy are more likely to file during this time, if it’s the correct choice given their current finances, businesses that only qualify for Chapter 11 bankruptcy still might not be able to file.

The situation for small businesses right now is complicated. Big business bankruptcy cases have increased by almost 120% in the past 8 months, largely due to the effects of COVID-19, but many smaller businesses have been left unable to file for bankruptcy simply because the costs of filing can be significant. These smaller businesses are operating on shoestring budgets, and once stimulus aid comes to a full stop, they will likely be left with little to no resources.

Because small businesses will be (or already have been) operating on such low incomes, they will literally not be able to afford to file for Chapter 11 bankruptcy. The cost of an attorney and the filing fees involved in a Chapter 11 bankruptcy case are often upward of $10,000 for many small to medium businesses. Most struggling to meet debt payments will just keep operations running until a third party intervenes rather than put time and money into Chapter 11 bankruptcy reorganization plans.

With PPP (payroll protection) loans and stimulus support still helping some small businesses and other businesses with incomes too low to cover bankruptcy fees and costs, small business bankruptcies are down by about 14% from last year.

If you are able to fund a Chapter 13 bankruptcy in New Ulm, MN, or the local area, Behm Law Group Ltd. can help you build a repayment plan for long-term debt relief. Contact us at (507) 387-7200 or stephen@mankatobankruptcy.com today.

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Understanding What “Judgment Proof” Means and Debt Relief through Bankruptcy

Thousands of U.S. citizens struggle to make debt payments each month, and with the added impact of coronavirus shutdowns, many more will continue to lose financial stability. If you are among those finding it difficult to keep your budget balanced, you may want to consider taking positive action for debt relief. One of the most effective ways to resolve the majority of common debts in the United States is through the process of bankruptcy. While some creditors can force debtors into involuntary bankruptcy, depending on the situation, most cases are voluntarily filed under whatever chapter best fits the circumstances. At Behm Law Group Ltd., we provide guidance and support to help our clients file a successful bankruptcy case and receive much needed debt relief in Waseca, MN, and the surrounding communities.

Filing for bankruptcy may seem like a drastic action, but it is actually one of the most common ways people in severe debt can resolve those financial struggles and find long-term financial stability. For individuals, two options are typically available for bankruptcy processes.

First, there is the option to file for Chapter 7 liquidation bankruptcy. This process works to discharge debts in exchange for the liquidation of non-exempt assets. This type of bankruptcy is most suitable for individuals with low income and high dischargeable debts such as credit card debts and medical bills.  In the majority of cases, people don’t lose assets and all that they lose are their debts.

Second, filers can choose to use Chapter 13 to restructure their debts into a manageable repayment plan where there are no late fees, no penalties and no interest. This process involves the discharge of unsecured debts, the reorganization of secured debts such as motor vehicle loans and mortgage delinquencies, and the payment of tax debts, child support/alimony debts and other priority unsecured debts on more generous terms. The final results of this process depend on the filer’s own situation and the income/debts involved.

For those who may not be able to file for bankruptcy right away but still cannot pay certain debts, they can sometimes protect themselves from lawsuits and other collection activities if they are “judgment proof”. Even with debt, you can live in a way that makes it harder for creditors to sue you for not paying debts. To be judgment proof, you generally need to receive income from sources that are not subject to garnishment or attachment, such as Social Security income, unemployment income, child support income and state or county welfare income/benefits and other such income.  If you can show that you have a very low income or are unemployed, have minimal assets in the form of money in a bank account or real estate, and have your income sources exempt from seizure (e.g., unemployment benefits), then you are generally “judgment proof” and it will be more difficult, though not impossible, for creditors to initiate and maintain collection activities against you.

Even if you are presently judgment proof, your financial circumstances could improve or you could inherit property unexpectedly.  In other words, your circumstances could change quickly and your creditors would then be in a better position to pursue collection activities against you.   You must be aware that creditors are extremely vigilant and doggedly persistent.  They typically will review and investigate your economic/employment/financial situation at least once a month for any changes.

If you believe you are judgment proof, but want to learn more about what that term means, or if you want to start the process of filing for bankruptcy, Behm Law Group Ltd. can help. Contact us at (507) 387-7200 or stephen@mankatobankruptcy.com for more information about debt relief in Waseca, MN.

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The Fair Debt Collection Practices Act and Finding Debt Assistance

No matter what your financial situation is, you don’t deserve to be harassed by creditors and collection agents. In fact, any aggressive or manipulative debt collection practices are illegal, thanks to the 1962 Fair Debt Collection Practices Act (FDCPA). If you’re struggling to meet debt payments each month, you may begin to see some of the nastier collection practices creditors employ. If you’re experiencing that kind of aggression, remember that it’s illegal and you can protect yourself against it. At Behm Law Group Ltd., we see many clients take action to protect themselves from creditors by finding effective debt assistance in Mankato, MN, and the surrounding area by filing a bankruptcy case.

 

While there are ways to protect yourself against aggressive creditor action without filing for bankruptcy, the advantage you gain with a bankruptcy petition and the subsequent automatic stay can be extremely impactful. As soon as you file a bankruptcy petition, the court places an automatic stay on the collection actions of your creditors. If they attempt to continue collections, they may be facing legal repercussions and significant punitive, monetary sanctions. With the additional protection of a Behm Law Group attorney, you can be sure you will be safe from creditor harassment for the duration of your bankruptcy case and afterward.

 

Even if you aren’t filing for bankruptcy, you can still trust in the FDCPA to protect you from creditor misconduct. Under the laws outlined in this act, creditors are prohibited from the following:

 

  1. Calling you without identifying themselves as your creditor, a collection agency, or other related party tasked with collecting on your debt.
  2. Calling you with excessive persistence.
  3. Calling you during inconvenient hours of the day or any time at night (9 pm to 8 am).
  4. Call you or otherwise contact you at your workplace if your employer does not allow it.
  5. Contacting any third parties other than your original creditor (if they are a hired collection agency), credit reporters, and your attorney. The exceptions to this are spouses, co-debtors, and parents of minor-age debtors—all of whom they can call unless you have a written request for them to stop contact.
  6. Claiming to be an attorney.
  7. Claiming you owe more money than you do or adding extra interest, fees, and charges that are not legally included in your contract.
  8. Sending you fake legal documents.
  9. Threatening you with violence.
  10. Using profanity or obscene language with you or other parties.
  11. Telling you that you will go to jail if you don’t pay the debt.
  12. Telling you that the non-payment of your debt is a criminal offense.

 

If you are experiencing any of these illegal actions with your creditors or collection agencies, you have the power to stop them. You can ask them directly to stop in a formal letter, which often works. You can also document their illegal actions if you suspect it will be used in court, file a complaint with the Federal Trade Commission (FTC), and/or sue them in court.

 

To learn more about creditor actions and bankruptcy debt assistance in Mankato, MN, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

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How Bankruptcy Offered Debt Relief to Many During the 2008 Financial Crisis

 

During this unsure economic time, many of us look to the past to see how we reacted, what worked, and what didn’t. Since the first Great Depression in the U.S., there have been many ups and downs in the economy. One notable “down” was the 2008 financial crisis. The unexpected depression during that time was a recent crisis that took place in an economy very similar to the one today.

 

While there are many components to any depression, the 2008 crisis is one we can most likely prevent from occurring again. However, if any financial crises happen in our future, individuals and businesses alike can find solid ground and protection from the relief a bankruptcy case provides. If you’re struggling to make ends meet during these challenging times, Behm Law Group, Ltd. can help you find debt relief in Marshall, MN and the surrounding area through the process of filing for bankruptcy relief.

 

The financial crisis of 2008 saw many bankruptcies, including Lehman Brothers, who filed the largest case of all time. Individuals, small businesses, and Fortune 500 companies were all affected financially during this time. A combination of risky investments, the collapse of the housing market, and various other bad choices made by large players in Wall Street led to a severe financial crisis and a trickle-down effect that made everyone change the way they looked at our economy.

 

In addition to many of the large bankruptcy cases like Lehman Brothers, thousands of people across the U.S. found themselves filing bankruptcy to protect their homes and find debt relief. For individuals then (and now) there were two main options.

 

If their income was lower than the state median income, an individual could file for Chapter 7 bankruptcy and have their non-exempt assets sold in exchange for the discharge of debts. In a Chapter 7 case there are exemptions filers can use to protect the vast majority of their assets (in most cases people are able to protect all of their assets) from liquidation, depending on their financial circumstances. In 2007 there were 467,248 non-business Chapter 7 cases. After the crisis in 2008, that number jumped to 949,002 in 2009 and 1,105,534 in 2010.

 

A debtor’s other option was to file for Chapter 13 bankruptcy. This was an option for those with an income higher than the state median income who were ineligible for Chapter 7. Chapter 13 worked to restructure debts into a manageable repayment plan lasting three to five years. In 2007, there were 307,521 non-business Chapter 13 cases. In 2009, that number increased to 393,786, and in 2010, rose again to 430,583.

 

All of the bankruptcy cases born out of the 2008 crisis were effective in many ways, helping to rebalance our economy and provide much needed debt relief to filers. To learn more about filing for debt relief in Marshall, MN during today’s difficult financial times, contact Behm Law Group, Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.

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Debt Assistance in a Major Recession

Despite the $2.2 trillion stimulus package of the CARES (Coronavirus Aid, Relief, and Economic Security) Act in March 2020, the impacts the novel coronavirus is having on the local, national, and global economies will most likely continue, potentially causing a recession that may result in the same severities as the 2008 Great Recession. In fact, some studies show the economic downtown due to COVID-19 may become a full-blown depression. Despite the dire financial reports and record rise in unemployment rates, individuals and their communities can implement many methods to weather difficult financial times, no matter how widespread the fallout. If you’re already experiencing the effects of the current economic downturn, consider the many options for debt assistance in Owatonna, MN, and the surrounding area, including filing for bankruptcy. With the help of Behm Law Group Ltd., you can use the bankruptcy process for long-term, effective debt relief during this time of crisis.

 

The projected recession will affect millions of U.S. citizens and businesses for an unforeseeable amount of time. Because of this uncertainty, many people will have difficulties meeting debt payments on time and they may accumulate delinquencies. Some options always available, such as debt settlement, loan consolidation, and debt workout, require direct communication with creditors or include the involvement of third-party agencies. In addition, the CARES Act provides several other options for debt assistance, including loan extensions, and payments deferments and modifications. Likewise, some private lenders are providing assistance programs and case-by-case work outs of debt.

 

While all of these non-bankruptcy debt assistance options vary in effectiveness, presuming you find a trustworthy third-party who will work with you in good faith instead of one of the many bad actors who simply want to make money off of you and cut and run, as the months wear on, you may need to do more for sustained and permanent debt relief in the long term. For many people, this will be the filing of a bankruptcy petition.

 

Bankruptcy is one of the longest used debt assistance options during times of recession and depression in the United States. In the 2008 recession, over 4 million non-business bankruptcy cases resolved individual debts in the time it took to turn the economy around (between 2008-2010). The history of bankruptcy successes during times of economic recession is a sign of hope for the future.

 

Bankruptcy is an effective tool whether you file to resolve a large portion of credit card debt and medical bills as a direct result of the COVID-19 crisis, or if you need to restructure your mortgage and other secured debts into a manageable repayment plan. During this current health and financial crisis, the majority of debt increases will be medical bills and credit card debts, both of which are dischargeable in bankruptcy. Other common debts taken on in a recession, such as tax debts and car loans, can also be resolved with the bankruptcy process and payment terms that are more favorable to you can be established.

 

To learn more about using bankruptcy as a form of debt assistance in Owatonna, MN,

during a recession, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com today.