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Bankruptcy News & Recent Cases

Priority Claim Treatment for Debts Resolved With Bankruptcy in Worthington, MN

March 29th, 2018 · No Comments

If you’re an individual struggling financially in the United States, you have several options to resolve your debts effectively. These options include bankruptcy, which in many cases is a far more beneficial option than other remedies such as debt settlement or debt consolidation. Individual bankruptcy options commonly take the form of asset liquidation/debt discharge or debt reorganization, known respectively in bankruptcy terms as Chapter 7 and Chapter 13. If you choose to file for bankruptcy in Worthington, MN, Behm Law Group, Ltd. provides legal advice and assistance in navigating the process from start to finish.

With either bankruptcy chapter, any individuals, companies, or organizations to which you have debt obligations are categorized into types of creditors based on the kind of debt owed. These categorizations will determine how your debts are handled and how your creditors may be paid in your bankruptcy case.

One type of debt that is commonly encountered in bankruptcy cases is priority, unsecured debt. This kind of debt is generally treated more preferentially than general, unsecured debts.  Priority creditors will often file proofs of claim regarding the debts you owe.  In a chapter 7 bankruptcy case, priority, unsecured debts will not be discharged and a debtor will remain liable on those debts after a chapter 7 bankruptcy case is concluded.  In a chapter 13 bankruptcy case, priority, unsecured debts must be paid in full in order for a chapter 13 repayment plan to be approved by the bankruptcy court.

Creditors with priority claims will often have debts that are directly linked to the well-being of another person or organization. This includes debts owed to employees, child support and other spousal support obligations, contracted amounts owed in return for promised services, taxes, and settlements for injuries caused by intoxicated or substance-influenced motor vehicle accidents.

These claims are treated in accordance with the chapter regulations that delegate how all other debts are handled in a case.

Chapter 13: Priority claims in a Chapter 13 case determine in part how the filer’s repayment plan will be structured. In most cases, these debts will be handled in a process similar to secured debts. This means filers might be required to repay priority debts in full during their 3 to 5-year repayment plan period.  However, unlike secured debts, priority claims are not paid interest.

Chapter 7: In a Chapter 7 case, debts are processed in terms of discharge and exceptions to discharge.  As indicated above, the claims of priority, unsecured creditors will not be encompassed by the discharge issued by the bankruptcy court at the end of the case.

If you’re considering filing for bankruptcy in Worthington, MN, it’s important to understand how your creditors will be defined and what options they might have in the process. Behm Law Group, Ltd. provides counsel and support for both Chapter 13 and Chapter 7 cases. Contact us at (507) 387-7200 today for more information.

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

August 25th, 2017 · No Comments

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.

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Claiming Excessive Exemptions and What You Can Buy Before Filing for Bankruptcy in New Ulm, MN

May 24th, 2017 · No Comments

Making prudent use of the financial help that filing for Chapter 7 bankruptcy can provide is one of the smartest things you can do if you’re overwhelmed by accumulated debts and financial obligations. Chapter 7 was designed to help people recover from crippling debt and get back on their feet financially. The U.S. Bankruptcy Courts have to treat each case with fairness to debtors and creditors alike, so Chapter 7 works as a balanced process. Behm Law Group, Ltd. helps filers with legal advice and assistance throughout the process of filing for Chapter 7 bankruptcy in New Ulm, MN.

To keep things balanced between creditors and debtors, Chapter 7 bankruptcy works to discharge your debts while simultaneously liquidating your nonexempt assets, if any, to repay your creditors.  Most cases, however, are “no asset” cases which means that all of one’s assets are exempt and creditors don’t get paid anything.  It’s your job as a debtor to claim your own exemptions to prevent assets from being unnecessarily liquidated. The flipside to claiming exemptions, however, is that it’s possible to claim too many for your case.

Excessive Exemption Planning

Generally speaking, exemption planning—taking assets you may not be able to keep in bankruptcy and liquidating them and using the money to pay down your mortgage or purchase assets that you would be able to keep so you can maximize your exemptions—can be a tricky process. In fact, it can be considered fraudulent behavior and can be a basis for the dismissal of a bankruptcy case or a denial of all and any debt relief. That being said, there are times when exemption planning is possible when it comes to making purchases before filing for bankruptcy.

Purchasing Before Bankruptcy

Many purchases you make on credit before filing for bankruptcy can be construed as fraudulent use of credit and can render the subject credit debt non-dischargeable. For example, any debts you gather within 90 days before filing for bankruptcy that exceed $675 in total can be considered non-dischargeable. This applies to “luxury goods,” a term that covers most purchases that are not necessary to your household like televisions, furniture, trips to Hawaii or Europe. Purchases that you are allowed to acquire credit debt for within the 90-day period before filing for bankruptcy includes necessities like food, gas, rent, and auto care. These debts may still be petitioned for discharge.

Your spending during the 90-day period prior to filing for bankruptcy is flexible. If you make some bad choices, however, by “maxing out” your credit before filing for bankruptcy, many of your debts may not be discharged, and your case may even be dismissed. Behm Law Group, Ltd. can help you navigate exemption planning and purchasing before you file for bankruptcy in New Ulm, MN. For more information, contact us today at (507) 387-7200.

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Priority, Secured, and Unsecured Claims and How These Types of Debts are Treated With Bankruptcy in Mankato, MN

January 20th, 2017 · No Comments

If you find yourself in a position where filing for bankruptcy is the most logical course of action for you and your family or for your business, you will also find that you have creditors to who will fall into different categories and that creditors in the different categories have different rights.  When you think of creditors in bankruptcy, you should think of them being listed in their different categories as on a totem pole.  Behm Law Group, Ltd. provides legal assistance to help you throughout the process of filing for bankruptcy in Mankato, MN, and to protect and direct you in the face of your creditors.

When you file for bankruptcy, your creditors must file proofs of claim with the bankruptcy court to show, as a matter of public record, the type or category of debt that you have with each of them and how much you owe to each of them. These claims can fall into the following three categories.

Secured Claims: These claims should be viewed at the top of the totem pole.  When your creditor has a lien on your property (or a security interest), they can file a secured claim. Mortgages and car loans are common examples of debts with security interests attached. If you default on these types of debts, your creditors can enforce their liens and reclaim the property (i.e. house, vehicle, washer/dryer) securing their liens. Chapter 7 filers must specify in a bankruptcy form called the “Statement of Intention” whether they want to surrender property/collateral to a creditor or continue making debt payments and retain the property/collateral. Chapter 13 filers can continue paying off the debt secured by the property/collateral with their established repayment plan and in some cases even eliminate the lien their creditors have on that property/collateral.

Priority Claims: These claims should be viewed in the middle of the totem pole.  Where unsecured claims are on dischargeable debts with no secured collateral, priority claims are non-dischargeable debts with no secured collateral. “Non-dischargeble” means that they are not subject to being wiped away or discharged.  These debts are unsecured debts but they are debts that Congress, for certain public policy reasons, determined should not be subject to discharge.  For example, child support debts, some tax debts, and criminal fines are generally not subject to discharge in a Chapter 7 case. Creditors to whom you owe these types of debts file priority claims when you file for bankruptcy relief. Because these debts are not discharged, you must keep paying them even if you file for Chapter 7, and they must be completely repaid with your chapter 13 repayment plan if you file for Chapter 13. Creditors with priority claims will be repaid before those holding unsecured claims, but after those with secured claims.

Unsecured Claims: These claims should be viewed at the bottom of the totem pole as they have a lower priority than secured claims and priority claims.  These claims are only applicable to debts with no secured collateral. Most frequently, these debts include medical bills, personal loans, and credit card debt and are almost always discharged with a Chapter 7 case. With Chapter 13 cases, your non-exempt assets and your disposable income determine the repayment plans for these debts. Creditors with unsecured claims are often paid last and paid least.

If you are considering filing for bankruptcy in Mankato, MN, and you would like to learn more about how Behm Law Group, Ltd. can help you throughout the process, contact us today at (507) 387-7200.

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How Natural Disasters Influence Bankruptcy Claims in Mankato, MN

April 28th, 2014 · No Comments

Filing for Bankruptcy in Minnesota | Tips from Behm Law Group, Ltd.

Since Hurricane Katrina, there have been changes and adjustments to bankruptcy laws. This is especially important for people that have been the victim of a natural disaster and lost all of their possessions and potentially their income. With the recent tornadoes and weather events in the South, Behm Law Group, Ltd. wanted to revisit the nuances of bankruptcy for disaster victims.

When an enormous weather event, such as Hurricane Katrina, strikes, the government may relax some of the laws associated with bankruptcy. In the instance of Katrina, the strict rules of Chapter 7 bankruptcy were relaxed to take into account the increased expenses and loss of property and income that disaster victims and their families experienced. Chapter 7 bankruptcy allows for debts to be completely erased. If the looser rules were not put into place after such large events, some families with higher income than the state’s median may have to repay their debt over a five year period.

Of course, these exceptions are due to extreme cases, like natural disasters and other events that impact an entire geographic area. It is still applicable to residents of Minnesota that sometimes experience tornadoes and flooding statewide.

To help you navigate the intricacies of bankruptcy law, call Behm Law Group, Ltd, your local bankruptcy attorneys based in Mankato, Minnesota. Filing for bankruptcy, whether Chapter 7 or Chapter 13 is never an easy decision, and it certainly isn’t a simple process. We are here to help you through the hardest times in your life, whether they are naturally occurring or caused by a natural disaster.

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Lien Avoidance vs. Lien Stripping When Filing for Bankruptcy in Waseca, MN

August 1st, 2019 · No Comments

Anyone struggling to meet monthly debt payments has more options than just slipping deeper beneath the water of financial difficulties. Instead of facing the stress of debt and the emotional toll it creates, those working through financial troubles can find relief within the government sanctioned process of bankruptcy.

 

If you think bankruptcy might be right for your financial circumstances, Behm Law Group, Ltd. can provide professional guidance and support. When you choose to file for bankruptcy in Waseca, MN, as an individual or business, you can gain the benefits of a debt treatment process that will lift the stress of a heavy financial burden.

 

When you file for bankruptcy, you may have many different types of debts to your name. Broadly speaking, the types of debts included in the bankruptcy process are generally secured and unsecured. Your secured debts are tied to or secured by an item of property or real estate, and it’s almost certain that the property or real estate will have liens attached to them.

 

Liens are tied to property loans like mortgages, car loans, and other commonly secured debts that are arranged through lending companies. These liens give the lenders the right to repossess or foreclose on the properties tied to the debts until the debtor pays the debts or the debts are discharged. In the bankruptcy process, mortgage liens can be stripped or avoided, depending on the situation.

 

Lien Avoidance in Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy, you’re entering into a liquidation process that works to provide your creditors the value of your non-exempt property in exchange for debt relief. You can protect your properties from liquidation with your available bankruptcy exemptions, however. If there was a lien on a piece property, claiming the exemption is not considered lien avoidance.  Your available bankruptcy exemptions allow you to protect the equity – the value of an item of property above the debt you may owe against it – in your property.  Sometimes, you can avoid a creditor’s lien in full or in part regarding a certain piece of property and use your bankruptcy exemptions to protect the equity you gain from such lien avoidance.  In order to avoid a lien on property, a secured creditor’s lien must be a non-purchase money lien.  This means that the creditor did not give you any financing for the purchase of the subject asset itself.  For instance, if a creditor gives you a loan for home improvements and you give that creditor a lien or security interest in your furniture or a vehicle, farming equipment or some other assets, that creditor has a non-purchase money lien as to those items because it did not give you a loan to purchase them.  Rather, the creditor gave you a loan for some purpose that was completely unrelated to the assets on which you allowed the creditor to have a lien.  Presume that One Main Financial gave you a $10,000.00 loan for home improvements and further presume that you granted it a security interest in your furniture, appliances, and your car.  In a bankruptcy proceeding, you could avoid the entire $10,000.00 lien on those items and use your bankruptcy exemptions to protect the resulting $10,000.00 equity you would then have as a result of having avoiding the lien.

 

Lien Stripping in Chapter 13 Bankruptcy

If you file for Chapter 13 bankruptcy, your debts are reorganized into a manageable repayment plan lasting three to five years. If you have multiple mortgages on your property, you may be able to strip off second and third mortgage liens, if there is no value or equity to the real estate above and beyond the first mortgage.  If the amount of the first mortgage is greater than the value of your home, you’re considered “upside down” on that mortgage debt, and you can strip the junior liens away.

 

To learn more about the different types of bankruptcy chapters and how your liens are handled when you file for bankruptcy in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

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How A Bankruptcy Lawyer Supports Your Pipestone, MN, Case

July 25th, 2019 · No Comments

Bankruptcy is a process that affects a higher percentage of families, individuals, and businesses each year as many aspects of our economy change. There is absolutely no reason to feel shame in filing bankruptcy. In fact, bankruptcy is a government sanctioned process designed to help U.S. citizens find relief from debts, unexpected or otherwise. While some take on bankruptcy without a professional at their side, this is not recommended as filing for bankruptcy is one of the most complex and condition-based procedures an individual or business can undergo. Behm Law Group Ltd. can help you work through a case with the advice and support you need from a professional bankruptcy lawyer in Pipestone, MN.

 

Any bankruptcy trustee or legal professional will advise individuals and businesses to take advantage of the invaluable help a bankruptcy lawyer provides, and for good reason. No matter how much research you do to understand the process and your own circumstances, a bankruptcy lawyer provides legal protection in addition to the expert guidance and support you need in any type of case.

 

When you partner with a Behm attorney, you can expect knowledge, experience, outside-of-the-box thinking, and true caring for you, the client.

 

A Bankruptcy Lawyer’s Guidance

 

The key role of a bankruptcy lawyer is to provide guidance throughout a case. This includes:

 

  1. understanding aspects of your circumstances and determination of the best course of action when it comes to the type of bankruptcy you should file
  2. comprehensive assistance in gathering documentation for your case, including all financial information about income, debt, accounts, expenses, and more
  3. advice throughout credit counseling and other preliminary requirements outlined by the court
  4. support at the 341 hearing (meeting of creditors) or in court in the event your case advances beyond standard procedure
  5. advice and assistance in creating a Chapter 13 repayment plan proposal that fits the requirements of the court and your own financial situation
  6. support throughout the Chapter 7 liquidation process and assistance in claiming exemptions
  7. help in establishing a long-term plan for post-bankruptcy life

 

A Bankruptcy Lawyer’s Protection

 

Not only do bankruptcy lawyers provide guidance and insight from start to finish in your case, they also give vital protection from any parties involved. This includes:

 

  1. protection from creditors’ harassment that might occur
  2. support and protection in the event you may face a judgment claim from court or creditor
  3. defense against many reasons your trustee may attempt to dispute your case
  4. assistance during the meeting of creditors, the first critical time your case is introduced to the bankruptcy court

 

If you are considering filing a Chapter 7 or Chapter 13 case, Behm Law Group Ltd. can offer you the support and protection of a professional bankruptcy lawyer in Pipestone, MN. To learn more or to get started with us today, contact us at (507) 387-7200.

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When Corporations, LLCs, and Other Businesses File for Chapter 7 Bankruptcy in Mankato, MN

July 10th, 2019 · No Comments

Running a business is a difficult venture, and even with support systems in place, the enterprise can go wrong. Whether it’s sudden or gradual, debts can overcome a business income and leave no other option than some form of debt relief. Debt relief options vary, but the most effective solution for the long term is to file for bankruptcy. Corporations, LLCs, and other businesses that are not sole proprietorships or partnerships can file for two forms of bankruptcy: Chapter 11 (reorganization bankruptcy) or Chapter 7 (liquidation bankruptcy). Individuals and businesses alike can find guidance when filing for Chapter 7 bankruptcy in Mankato, MN, with the help of Behm Law Group Ltd.’s attorneys.

 

Chapter 7 works similarly for individuals and businesses, but with slight differences. The primary function of Chapter 7 is to liquidate the filer’s assets in exchange for debt discharge. Individual filers may claim exemption allowances to protect certain properties (e.g., the homestead exemption protects the filer’s home from liquidation), but businesses have no such exemptions to claim.

 

How Chapter 7 Bankruptcy Works

Corporations, LLCs, and business formats that are not tied to the owner’s personal debts can petition for Chapter 7 to discharge all of their business debt. Compared to an individual consumer Chapter 7 bankruptcy case, business bankruptcies are fairly cut and dry.

 

Filers work with an attorney to build their case, including all the required documents and financial records. When the petition is submitted to the court and all necessary bankruptcy fees are paid, the court appoints a trustee to handle the liquidation of the business assets. Properties, equipment, business accounts, and any other components of the bankruptcy estate are sold. Creditors are paid with the value of those sales, and the trustee takes his or her commission based on a percentage of the values received.

 

When the assets are liquidated and the trustee distributes the sale proceeds among the creditors of the business, the court will then discharge unsecured business debts, including credit card debt, utilities owed, lease obligations, loans, and other business debts. When this process is complete, the business filing is shut down, effectively ending operations.

 

Chapter 7 bankruptcy is a highly effective debt relief process for businesses, though it’s undeniable that your company will be closed down. Many large U.S. businesses, such as Lehman Brothers in 2008, have used Chapter 7 to rid themselves of debt and shut down. Lehman Brothers filed with $691 billion in assets and $619 billion in debt. This was a case that affected hundreds of employees, but for the long term, was a positive solution for all involved.  In many cases, after the bankruptcy process is completed, one can create a brand new business operation that does the same work as the business that filed for bankruptcy relief and one can operate much more efficiently and smoothly without all of the debts that encumbered the former business.

 

If your business is struggling to keep the lights on and hasn’t had success negotiating with creditors or finding other ways of resolving debt, filing for Chapter 7 bankruptcy may be the final option. Filing will release you from all your business debt effectively, though it will just as effectively close down your business operations.

 

To learn more about filing for Chapter 7 bankruptcy in Mankato, MN, as a business or individual, contact Behm Law Group Ltd. at (507) 387-7200 today.

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Exemptions for Chapter 7 Bankruptcy in Pipestone, MN

May 31st, 2019 · No Comments

If you are unable to meet your monthly debt payments and don’t know how to get yourself out of your current financial situation, bankruptcy might be a valuable option for government-addressed debt relief. Filing for bankruptcy is a process that’s frequently given a negative image, primarily because of the impact it has on your credit score, but in fact, bankruptcy often has a positive long-term effect on your financial standing. Petitioning for bankruptcy and working through the filing process may seem daunting, and it is a nuanced legal procedure. However, with the help of a professional bankruptcy attorney, you can put together a strong, successful case for Chapter 7 bankruptcy in Pipestone, MN.

 

Chapter 7 bankruptcy is one of the most common bankruptcy chapters individuals and businesses file for in the United States. The process of Chapter 7 bankruptcy works to liquidate your non-exempt assets (properties) in exchange for discharging (dissolving) your debts. If your income is lower than the amount you are required to pay for your current monthly debts and your reasonable and necessary living expenses, you qualify for Chapter 7.

 

While Chapter 7 seems like a last gasp for many, largely because of the liquidation process, it’s not a process designed to leave you destitute. While some of your assets could be sold or liquidated, that is the exception rather than the rule.  Most people who  file for bankruptcy relief can and do protect and keep their properties with their allowed bankruptcy exemptions.

 

Exemptions are a key part of the filing process for Chapter 7 bankruptcy. The U.S. Bankruptcy Code provides exemption allowances for many of your properties, from your home and car to your small personal property items. The current Minnesota exemptions include:

 

  1. Homestead: Up to $420,000 for most homes (non-agricultural use) or $1,050,000 if the home is used primarily for agricultural purposes.
  2. Insurance: Including accident, disability, and life insurance for a spouse and dependent beneficiaries as well as fire and police beneficiaries.
  3. Trade Tools: Including agricultural equipment, livestock, and crop stores up to $13,000 in value; teaching materials and other tools of trade up to $12,000.
  4. Wages: 75% of your earned, unpaid wages within the past six months; wages earned within six months of release from prison; and wages paid within six months of employment after welfare.
  5. Personal Property: Including appliances, furniture, radios, and TVs up to $10,800; burial plots, church pews, clothing and watches, food, utensils.
  6. Public Benefits: Including compensation for crime victims, unemployment, and workers’ as well as veterans’ benefits.
  7. Miscellaneous: The wages of your child under 18, ERISA-qualified benefits and IRAs under $72,000, and property of partnership businesses.
  8. Vehicle. Value in a motor vehicle of up to $4,800.00.

 

The preceding list denotes just some of the many exemptions you can claim in a Chapter 7 case. First and foremost, bankruptcy is designed to be fair to you and your creditors alike. The court does not want you to be left with nothing, and so exemptions allow you to protect your property during a Chapter 7 liquidation.

 

To learn more about filing for Chapter 7 bankruptcy in Pipestone, MN, contact Behm Law Group Ltd. at (507) 387-7200 today.

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How Businesses Filing Bankruptcy in Fairmont, MN, Affect Local Creditors

April 25th, 2019 · No Comments

Our economy is a complex system that affects even simple business formats. Businesses of all shapes and sizes can thrive or fail depending on a wide variety of economic circumstances. When economic factors cause financial changes to a business, they have consequences for everyone involved, including owners, investors, customers, and employees. Failing businesses often have the greatest consequences to all parties involved in them, in addition to consequences to the economy as a whole. If you find yourself affected by a business filing bankruptcy in Fairmont, MN, Behm Law Group Ltd. offers guidance and counsel for those filing for Chapter 7, Chapter 13, and Chapter 12 cases.

 

If you are considering filing for a business bankruptcy, Behm attorneys can represent and support you throughout the case. However, we believe it’s important for all involved to understand how the prospect of a business bankruptcy will affect them. One recent example of how a business bankruptcy negatively affected parties involved more dramatically than the typical bankruptcy is the case of Colleen’s Consignment Stores in Las Vegas, NV.

 

In this case, the owner of the business may have created more detriment to creditors than would have been necessary. As small furniture consignment shop, Colleen’s Consignment Stores bought used furniture for resale. The company did not pay for the furniture bought from sellers within the weeks leading up to the company’s bankruptcy filing, and so those sellers became involved in the case as creditors.

 

The nature of this case caused much backlash from those who were involved unexpectedly as creditors and for the employees of the company who were given no warning of the bankruptcy. Some creditors were unaware of the bankruptcy until they were called to the required meeting of the creditors. Many were unsettled by the fact that their goods may be sold during the liquidation process and many were upset about the fact that the company bought furniture while potentially considering filing for bankruptcy.

 

In a nutshell, the effects of this bankruptcy case on the creditors were the following:

 

  1. An automatic stay was placed on their ability to collect payment for their furniture.
  2. They had to submit a proof of claim to retain any chance of receiving payment for their goods.
  3. Their goods would likely be sold in the liquidation process and they would not receive payment.
  4. They had to attend a meeting of creditors and sacrifice additional business and personal time throughout the case resolution.

 

Overall, this bankruptcy case had a less-than-favorable outcome for many creditors and employees involved with the consignment shop. However, this is an exception to the many bankruptcy cases that provide positive results for all parties involved. Bankruptcy is often an effective way to resolve debts for the filer and to provide some form of recompense for the creditors.

 

With the help of Behm Law Group, you can file a bankruptcy case that will steer away from issues such as those in the consignment store case and offer better results for all involved. To learn more about filing bankruptcy in Fairmont, MN, contact us today at (507) 387-7200.

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