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Showing posts from June, 2015

Personal Bankruptcy and Divorce

The prospect of filing for divorce while you are dealing with the burden of overwhelming debt can make for a very frustrating situation. If you have the option of deciding whether you’ll file for bankruptcy or divorce first, how should you decide? No matter what kinds of questions you have about consumer debt and personal bankruptcy , the dedicated Chicago bankruptcy attorneys at the Emerson Law Firm can talk with you today. Saving Money By Filing for Bankruptcy Before Divorce It may very well be that you and your spouse are considering a divorce, but you are also thinking about filing for consumer bankruptcy. If you have the benefit of choosing which will come first, how should you move forward? The question is a complicated one, given that many Illinoisans report that financial problems lead to divorce, or that divorce leads to the need to file for bankruptcy. The two issues often are deeply intertwined. But let’s take a look at some of the pros and cons of fili

Consumer Credit Card Debt Rises

Is it a good thing or a bad thing for the economy when America’s total credit card debt grows ? According to a recent article in the Wall Street Journal , more credit card spending is typically “a sign of a rebound in consumer spending after a sluggish winter,” and thus a good thing for the economy. But, can too much credit card debt become a problem? Will current spenders need to think about filing for consumer bankruptcy in the near future? Billions in Credit Card Debt When the Federal Reserve talks about the total outstanding consumer credit , they are referring to all debt outside of home loans or mortgages. Based on recent calculations, Americans’ total credit card debt rose by almost 8% in March, and economists “had expected consumer debt to rise $16 billion in April.” The number actually outpaced those economists’ expectations, however, as it jumped by “a seasonally adjusted $20.54 billion in April,” which reflects a 7.33% surge. While credit card debt ros

Supreme Court Rules in Favor of Debtor

If you file for Chapter 13 bankruptcy and later convert to Chapter 7 bankruptcy , what are some of the issues with which you’ll have to contend? According to a recent post from SCOTUSblog , the U.S. Supreme Court had to decide the following question: “When a debtor converts a bankruptcy proceeding from Chapter 13 to Chapter 7, what happens to funds that the trustee is holding at that moment, previously collected out of the debtor’s wages but not yet distributed to creditors?” In short, the Court came down in favor of the debtor. And that decision could have positive implications for consumers in the Chicago area who convert a bankruptcy proceeding from Chapter 13 to Chapter 7. But let’s take a look at the facts of the case and the Court’s reasoning to understand the impact of the case. Facts of the Case in Harris v. Viegelahn In Harris v. Viegelahn , the key issue involved the disposition of a debtor’s income after filing for bankruptcy. As a quick reminder, Chapt

Credit Card Debt Low, Affects Bankruptcy Filings

Credit card debt is one of the more common reasons that Americans file for personal bankruptcy , and it is at its “lowest level since 2006,” according to a recent article from ACA International . Consumer bankruptcy filings have been on the decline over the last four years, and new research from the American Bankruptcy Institute suggests that the reason may be less accumulation of credit card debt. Role of Bankruptcy Reform and Personal Bankruptcy Filings According to the American Bankruptcy Institute’s Executive Director Sam Gerdano, the recent decline in personal bankruptcy filings likely is tied to the “changing nature of consumer debt,” and that decline “may slow down in the near future.” In thinking about how personal bankruptcy filings have been on the decline—and considering the reasons—it is important to look at the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). As Gerdan and Consultant Ed Flynn point out, “BAPCPA, which took effec

Homeowners Can’t Void Second Mortgages Through Bankruptcy

The U.S. Supreme Court recently ruled in favor of Bank of America when it unanimously decided that “homeowners who declare bankruptcy can’t void a second mortgage, even if the home isn’t worth what they owe on the first mortgage,” according to an article in the Chicago Tribune . In short, it is a big win for the banks. Underwater Primary Mortgages and Personal Bankruptcy How did the case come about? It involved homeowners in Florida who were underwater on their first mortgages and wanted to use consumer bankruptcy to “strip off” a second mortgage. In general, the homeowners argued that, since their second mortgages would only be paid after their primary mortgages—and those primary mortgages could be canceled in a Chapter 7 bankruptcy proceeding—the second mortgages are “essentially worthless,” according to a report in the Wall Street Journal . The lower courts that heard the cases found in favor of the homeowners, indicating that they could “nullify the second loans”

Personal Bankruptcy and America’s Seniors

According to a recent article in the New York Times , many of America’s senior citizens are facing enormous debt loads, and personal bankruptcy may be a way to help protect their assets. To be sure, consumer bankruptcy “can be a valuable tool to protect retirement assets,” and it is certainly an option to which more older adults should give serious consideration. Do you have questions about filing for Chapter 7 bankruptcy ? Don’t hesitate to speak with an experienced Oak Park bankruptcy lawyer . An advocate at the Emerson Law Firm can answer your questions today. Seniors Can Still Hit the Financial “Reset” Button For many seniors, filing for Chapter 7 bankruptcy means an opportunity to “hit the financial reset button.” How do older adults get into situations in which they have unmanageable debt? A number of elderly Illinoisans end up with significant debt from medical expenses or providing money to their children. No matter what the reason might be, personal bankr

Chapter 7 Bankruptcy as a First Choice

When most Illinois residents are considering different ways to manage their debt, many assume that filing for personal bankruptcy is an option of last resort. However, according to a recent article in the Huffington Post , Chapter 7 bankruptcy may in fact be the best option for many debtors. One of the most important issues to consider when deciding how to deal with your current debt, according to the article, is whether “you have a greater responsibility to repair the past, or the future.” If you’re thinking about filing for consumer bankruptcy, you should be sure to talk with an experienced Oak Park bankruptcy lawyer . Bankruptcy laws are complex, and it’s important to have an advocate on your side. Repairing Debt Could Cost You Millions If you have a significant amount of credit card debt or other bills for which you make monthly payments, you might have heard that the best solution is to spend less on everyday purchases and to pay more than the minimum with e