Picking the Best Time to File a Chapter 7 Liquidation Bankruptcy in Jackson, MN

There are several ways in our economic system to find permanent relief from debts that are significantly compromising your quality of life. These solutions range from working out an agreement with your creditors to filing for court-administered bankruptcy relief. If you have the right kinds of debt and your income isn’t meeting your expenses, bankruptcy might be the most effective and fastest way to permanently rid yourself of several burdensome financial obligations that you will never be able to repay. For anyone considering filing a liquidation Chapter 7 bankruptcy in Jackson, MN or the surrounding areas, Behm Law Group, Ltd. can help. Our attorneys will work with you every step of the way, from the filing of your petition to the issuance of your discharge order by the bankruptcy court.

Liquidation Bankruptcy

Liquidation bankruptcy is also known as Chapter 7 bankruptcy. This chapter works to discharge your debts in exchange for the sale, or liquidation, of your non-exempt assets. However, it is rare that you lose property in a Chapter 7 case because most filers are able to protect important belongings like their home, primary vehicle, appliances, and furniture, from liquidation by asserting the available bankruptcy exemptions. Each state offers a different selection of exemptions in varying amounts. In Minnesota, filers can choose between federal exemptions propounded under the bankruptcy code or exemptions propounded under Minnesota state law.  They cannot mix and match between the two.

Learn more about qualifying for Chapter 7.

Generally speaking, if some or all of the following are true, it’s a good time for you to file for bankruptcy relief:

  • Your dischargeable debt is $10,000 or more
  • Your credit score is 600 or below
  • Your property doesn’t have much value
  • Your house is about to be foreclosed on
  • Creditors are threatening wage garnishment, or threatening a levy on your bank accounts or threatening starting a lawsuit against you
  • You would pass the Means Test with your income-to-debt ratio
  • You wouldn’t be able to make your monthly debt payments and materially reduce your debt within the next year
  • Your vehicle is about to be repossessed
  • Your electricity is about to be shut off

Liquidation in Chapter 7 Bankruptcy

While a Chapter 7 case might be highly beneficial for finding debt relief, if these conditions describe your situation, there might be circumstances that make it best to wait to file your case. If the following is true, you may want to hold off on filing a case for the time being:

  • Your income recently increased. The court will examine your last six (6) months of employment and income.  If your income is high, you may not qualify for chapter 7 bankruptcy relief.  However, if you have had high income and you were recently laid off, you may be able to qualify for chapter 7 bankruptcy relief by simply waiting a few months.  If you have low income during most of the six (6) month look-back period, you will be more likely to qualify for chapter 7 bankruptcy relief.
  • You can’t protect assets with the bankruptcy exemptions.  Depending on the exemption format you need to use, there may not be an exemption for an asset that you have.   For instance, presume you recently received either an inheritance of $10,000.00 or a tax refund of $10,000.00 and you need to use the Minnesota state exemptions.  Generally, one is not able to fully protect such assets with the Minnesota state exemptions.  Sometimes, it is necessary for you to spend down such assets on food, furniture, vehicle repairs, home repairs, medical costs or other necessities before you file for Chapter 7 bankruptcy relief. In such a case, you absolutely need to keep receipts for how you deploy or use the money.  The trustee administering your bankruptcy case will ask you about how you used the money and you will want to have supporting documentation.   You must not repay debts to friends or relatives or buy things for friends or relatives or transfer assets out of your name.
  • You predict you’ll have more debt in the near future. If you know you’ll have to take out another pay day loan or incur more utility debt or have significant medical expenses that you won’t be able to pay in the near future, you may want to wait to file for Chapter 7 bankruptcy relief.  You can only qualify for Chapter 7 bankruptcy relief once every eight (8) years.  It would be counter-productive for you to file for bankruptcy relief and discharge the debts you presently have and then, after your case concluded, incur new debts and be burdened with those debts for a full eight (8) years until you are able to qualify for Chapter 7 bankruptcy relief again.


If you’re wondering when the best time would be to file for liquidation Chapter 7 bankruptcy in Jackson, MN, Behm Law Group, Ltd. can help you prepare. Contact us today at (507) 387-7200 or stephen@mankatobankruptcy.com.


Objections to Debt Discharge with Liquidation Bankruptcy in Owatonna, MN

If your income is lower than the Minnesota state median or average income, either due to a low-paying job or a level of expenses that outpaces your income, you may qualify for Chapter 7 bankruptcy. This is the most common type of bankruptcy that individual consumers file in the U.S. Its purpose is to wipe out the majority of debts that filers would have to repay. This often includes credit card debts, medical bills, old utility bills, bounced checks, past due rent, personal loans, pay day loans and other debts. Debts that are secured to a property, such as your home or car, will be discharged if that property is repossessed or foreclosed and you do not wish to retain the property. If you’re considering filing for Chapter 7 liquidation bankruptcy in Owatonna, MN, Behm Law Group, Ltd. can help with legal protection and guidance. Our support will play a significant role in getting the most out of the debt discharge awarded to you in the bankruptcy process and protecting your property with the available bankruptcy exemptions. We can also help you work around any creditor objections to discharge that might arise.

Chapter 7 Liquidation Bankruptcy

In Chapter 7 liquidation bankruptcy, the trustee will liquidate (sell or auction) your non-exempt property and divide the sale proceeds among your unsecured creditors.  Where your property is collateral for a loan, such as a vehicle loan or a home mortgage, the vehicle lender or mortgage lender would be able to sell the vehicle or house and retire as much of the subject debt as possible.  Any debt that is remaining is discharged.  Unsecured debts, such as credit cards, medical bills, etc., are discharged as well. You can prevent the liquidation of most or all your property with the available bankruptcy exemptions.  In most cases, the available bankruptcy exemptions are more than enough to protect all your property. Learn more about exemptions.


If a debt is scheduled to be discharged, the creditor for that debt might object to the discharge if it believes that you incurred the debt through fraud or misrepresentation.  Typically, a creditor will not object to the discharge of a debt unless it’s clear that someone has acted in obvious and excessive bad faith.  The creditor bears the burden of proof to show why a debt should not be discharged.

Types of Objections to Discharge

  • The debtor owes a debt because of malicious damage. For example, if a renter damaged their apartment purposefully before moving out and owed a debt for repairs to their landlord.
  • Excessive charges on a line of credit that were made 90 days prior to filing a bankruptcy case or large cash advances that were taken within 70 days of filing.
  • Debts related to damages or death caused while operating a vehicle under the influence of alcohol or drugs.
  • They committed some fraudulent action, such as perjury, destroying property or documents, lying to the trustee, or failing to obey a court order.

Liquidation Bankruptcy

Creditors can objection to the discharge of a debt in two ways: filing a motion or filing an adversary proceeding. When creditors file a motion to object discharge, they must do so within 60 days of the meeting of creditors. Adversary proceedings work more like an actual lawsuit and also must be filed within 60 days of the meeting of creditors.

To learn more about Chapter 7 bankruptcy in Owatonna, MN and filing, contact Behm Law Group, Ltd. today at (507) 387-7200 or stephen@mankatobankruptcy.com.

Categorizing Debt Claims for Liquidation Bankruptcy in Pipestone, MN

Several types of bankruptcy are available to individuals and businesses. For individual consumers, Chapter 13 and Chapter 7 are both potential options. Chapter 13 works to reorganize debts into a three-to-five-year repayment plan suited to your income and reasonable and necessary monthly living expenses. Chapter 7, on the other hand, is a liquidation bankruptcy where non-exempt assets are sold/liquidated in exchange for the discharge of debts. This latter chapter is the most common form of bankruptcy for individual and small business bankruptcy filers.

Bankruptcy Attorney

If you are considering filing for bankruptcy through either chapter, you need to be aware of the level of detail that will be required in your petition. The bankruptcy court will require your bankruptcy attorney to review documentation concerning your income, assets, debts, and other particulars of your financial situation. Because of the strict documentation requirements that are necessary to adequately and completely draft a bankruptcy petition, we recommend getting help from a professional. Behm Law Group Ltd. attorneys provide legal guidance, protection, and support throughout reorganization and liquidation bankruptcy in Pipestone, MN, and the surrounding areas.

Liquidation Bankruptcy

When you file for any kind of bankruptcy, your debts will be classified and treated differently depending on their status as secured, unsecured, or priority. For liquidation Chapter 7 bankruptcy, these different debts are handled in the following ways:

  1. Secured debts are secured to a property, such as a home or car. Debts that are secured to an asset can be discharged in liquidation bankruptcy.  The secured creditor can take and sell its collateral and apply the sale proceeds against the debt you owe.  If the sale proceeds are insufficient to pay off all the debt, the unpaid balance is discharged and you are not responsible for paying it.  Alternatively, many people want to retain their house or their car and they want to retain the debts that are secured by those assets.  In many cases, people will reaffirm the debts with the secured creditors by entering into a reaffirmation agreement.  A reaffirmation agreement is a document that memorializes the terms and conditions of the original mortgage or vehicle loan.  By signing it, a filer agrees to continue being liable on those debts after a bankruptcy case has concluded.  Essentially, a filer can preferentially treat those secured debts and exempt them out of the bankruptcy process.  Any equity or value that a filer has above the debt against a house or a car is protected from one’s creditors by asserting one of the many exemptions that are provided under state or federal law.  Exemptions are allowed in varying amounts. The exemptions also change over time as market values fluctuate (some current important exemptions for Minnesota).


  1. Unsecured debts are not tied to or secured by a property. Some of the most common unsecured debts include credit cards, medical bills, overdue utility bills bounced checks, and personal loans. In chapter 7 liquidation bankruptcy, these debts are completely discharged. However, there are unsecured debts that are considered priority, and these are treated differently than general unsecured debts.


  1. Priority debts are usually excepted from a chapter 7 discharge. General Common priority debts include alimony, child support, tax debt, criminal fines and penalties and debts for personal injury caused through intoxication and wrongful death claims.  Like all debts, they must be disclosed or listed in a bankruptcy.  There are some nuanced exceptions to the general rule that priority debts are not discharged.   One exception for instance is 1040-type tax debt that is dated/ old.  For instance, presume that you owe $5,000.00 for the 2010 tax year because your employer did not withhold enough out of your paychecks.  Presume further that you duly filed your 2010 state and federal tax returns by April 15, 2011.  Presume still further that you filed for chapter 7 bankruptcy relief on August 21, 2021.  This sort of dated/old tax debt would very possibly be discharged in your chapter 7 bankruptcy case.

In every bankruptcy case, all debts are handled in complex ways that vary depending on the situation. However, overall, the secured, unsecured, and priority debts will likely be addressed as previously described. To learn more about filing for chapter 13 reorganization or chapter 7 liquidation bankruptcy in Pipestone, MN, and the local region for long-term debt relief, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing stephen@mankatobankruptcy.com.

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.

Understanding the Predischarge Debtor Education Requirement for Bankruptcy in Luverne, MN

Whether you file for liquidation or debt reorganization bankruptcy, it’s likely that one or more of your debts will be discharged in the process. Discharging debts in Chapter 7 serves to simultaneously relieve debtors of unmanageable financial hardship and allow fair treatment of creditors despite a lack of full repayment. In a Chapter 13 case, certain debts can be discharged through a repayment plan. Foreseeing which debts will be discharged can be difficult, and organizing your case without the help of a professional may change that outcome. Behm Law Group, Ltd. offers legal advice and assistance if you choose to file for bankruptcy in Luverne, MN.

In addition to the many requirements involved in bankruptcy cases, filers who will have debts discharged must undergo predischarge debtor education before the bankruptcy process can be completed and before the bankruptcy court can issue a discharge order.

Predischarge Education

The predischarge debtor education requirement was established with the purpose of advising those who’ve fallen into debt and filed for bankruptcy on how to better manage their finances. This course is different from the credit counseling requirement which debtors must undergo prior to filing a bankruptcy petition. Instead, debtors must go through a predischarge education course after their petition is filed but before they’re granted a discharge on any debts.

The financial management education course must be provided by a court-approved agency within a forty-five day period after the meeting of the creditors. The course lasts around two hours and covers materials that teach debtors how to improve their financial situation after bankruptcy. Topics include effective budgeting practices, handling taxes sensibly, and other court-required material.

You’ll certify your fulfillment of the predischarge debtor education requirement with bankruptcy Form 423, and if you file a joint bankruptcy petition, you and your spouse must both take the course. Additionally, the agencies that provide the necessary predischarge debtor education course don’t have to follow the same non-profit regulations as credit counseling providers. This means you may have to pay a fee to take the required course.

If you’re contemplating filing for bankruptcy, it’s important to consider fees for requirements like predischarge debtor education and other milestones in your case before you begin. Behm Law Group, Ltd. offers assistance at every step whether you file for Chapter 7 or Chapter 13 bankruptcy in Luverne, MN. Contact us at (507) 387-7200 today for more information.


Exempted Properties and Debts Involved with Chapter 7 Liquidation Bankruptcy in Mankato, MN

Chapter 7 bankruptcy is the most common form of bankruptcy used to address issues of bankruptcy for individuals and businesses. Almost all cases of Chapter 7 bankruptcy involve converting all of the debtor’s assets into a cash value—otherwise known as liquidity. Because Chapter 7 functions to turn a debtor’s property and assets into cash used to repay creditors, it is commonly referred to as liquidation bankruptcy. At Behm Law Group, Ltd., we offer professional guidance and legal protection in all cases of Chapter 7 liquidation bankruptcy in Mankato, MN.

Chapter 7 is often the best choice for individuals filing for bankruptcy because it provides an efficiently-governed breakdown of assets. This gives the debtor a debt-free new start while also allowing for several properties exemptions. This means that the federal court allows the debtor to withhold necessities of life—such as housing and transportation—from the bankruptcy process.

The common assets that are exempt from the Chapter 7 bankruptcy liquidation process are considered basic needs for the debtor, in terms of survival and ability to function as a contributing member of society. In the state of Minnesota, these debts include, but are not limited to:

  • Homestead
  • Household car or other means of transportation
  • Pension or retirement benefits
  • Personal property (such as clothing, appliances, furniture, food, wedding rings, and tools of trade)
  • Insurance benefits
  • Assistance and other benefits
  • Wages

While the promise of these exemptions of property from the bankruptcy process are comforting, keep in mind that Chapter 7 bankruptcy doesn’t allow for the liquidation of several kinds of common debts. Not every debt is forgiven, and there are many cases where filing for bankruptcy is not ideal. Chapter 7 does not involve the following:

  • Student loan debts
  • Debts from fraud
  • DUI and DWI debts
  • Child support debts
  • Tax debts
Chapter 7 bankruptcy is not an answer for all debt situations, but if you choose to acknowledge the exemptions for the process and file for liquidation bankruptcy, our attorneys can guide you every step of the way. We do everything in our power to make filing for bankruptcy into a beneficial situation, giving you an opportunity to start fresh.

For more information about your options with liquidation bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 387-7200, or via email at stephen@mankatobankruptcy.com today.