Oak Park Real Estate & Estate Planning Blog

Any debtor in the Oak Park area who is planning to file for Chapter 13 bankruptcy and has secured debt may want to learn more about the ability to “cram down” certain types of secured debt. In cramming down a debt that is secured by property—such as an automobile—you can reduce the principal balance of that debt to the value of the property or asset that secures it. In most Chapter 13 bankruptcy cases, cramdowns are typically linked with automobile loans. However, under U.S. bankruptcy law , a cramdown can also apply to other forms of secured property, such as home appliances and even investment property for which you have a mortgage in some cases. You should know, however, that a cramdown is typically not an option for reducing the debt on a mortgage for your home and principal residence. To be clear, many secured debts can be crammed down, but not all secured debts are eligible. Understanding Secured Debt If you are planning to file for personal bankruptcy and are dealing with s

If you are planning to file for consumer bankruptcy and you received a first-time homebuyer credit in the past, you might be wondering if this credit will be eligible for discharge in your Chapter 7 bankruptcy case or whether you will still owe this credit once you have received your bankruptcy discharge. A recent bankruptcy case suggests that the first-time homebuyer credit is a “tax” and not a “debt” in a Chapter 7 bankruptcy case, and thus it is not dischargeable if a debt files for Chapter 7 bankruptcy. The case is likely to have implications for future personal Chapter 7 bankruptcy cases involving the first-time homebuyer credit, and it will be critical to seek advice from a bankruptcy attorney about your situation. Understanding the First-Time Homebuyer Tax Credit In the Housing and Economic Recovery Act of 2008, a tax credit was available for first-time homebuyers who purchased a house between 2008 and 2010, according to an article in Forbes . In most cases, the tax credit

For many Americans who are struggling with debt, one of the most difficult aspects of owing money is the constant contact from creditors and debt collectors. Even though consumers do have clear rights outlined in the Federal Debt Collection Practices Act (FDCPA), which include limitations on the times at which a debt collector can call and the ability for a debt collector to contact debtors at their places of employment, many people who owe substantial consumer debt still face seemingly relentless phone calls, emails, and other forms of communication from creditors or debt collection companies. If you are in this situation, you might be wondering: can consumer bankruptcy prevent creditor or debt collector harassment? Or, in other words, can filing for bankruptcy stop these creditors or debt collectors from engaging in this kind of constant contact? In short, the answer is yes due to the automatic stay in Chapter 7 and Chapter 13 bankruptcy cases. We want to provide you with more

If you are struggling with debt after retirement, you may be considering the possibility of filing for consumer bankruptcy . Indeed, you can incur many unexpected and costly expenses after retirement, including medical bills or costs of long-term care. For many seniors, personal bankruptcy can be daunting. You may have concerns about losing valuable property and retirement benefits, and you might be worried about whether or not you will need to go back to work. There are many specific questions that seniors who are thinking about Chapter 7 or Chapter 13 bankruptcy should consider, and we want to go over some of those key issues with you concerning U.S. bankruptcy law . Will Consumer Bankruptcy Benefit You? The first thing you should consider if you are an older adult or at retirement age is whether filing for consumer bankruptcy will be beneficial to you. There are many people in a variety of financial situations for whom personal bankruptcy can be beneficial. However, there are a

If you have had mortgage debt forgiven after a foreclosure , or through a short sale or deed in lieu of foreclosure, you could owe a significant amount of taxes on that forgiven debt. However, you should know that the Consolidated Appropriations Act of 2021 has extended the Qualified Principal Residence Indebtedness (QPRI) through 2025. What does this mean for taxpayers who have had mortgage debt forgiven? In short, for some of those taxpayers, it may be possible to exclude the forgiven mortgage debt from income for purposes of paying federal income taxes. Any taxpayers who received a 1099-C, which is a Cancellation of Debt form, from a mortgage lender, it will be important to determine whether or not the QPRI exclusion is applicable to your situation. If the QPRI exclusion does apply, you will not need to pay federal income taxes on the forgiven debt. In addition, homeowners who are anticipating that they will go through a short sale or a deed in lieu of foreclosure anytime throu

The consumer bankruptcy process is extremely complicated, even for people who have some familiarity with the law because of the recent bankruptcy case of a family member or close friend. As such, it can be difficult to know what exactly you should expect when you do file for bankruptcy. For consumers, there are two types of bankruptcy that make up most personal bankruptcy cases — Chapter 7 bankruptcy and Chapter 13 bankruptcy. Since these types of bankruptcy are quite different from one another, it is important to understand that, while there will be some similarities after the initial bankruptcy filing, these types of cases will take different paths. Today we want to focus on Chapter 7 bankruptcy, which is a type of liquidation bankruptcy. Once you do file your bankruptcy petition—which you should always do with assistance from a bankruptcy lawyer—what should you expect to happen? The following are some of the central events that you should anticipate once you have filed for Chapte