Oak Park Real Estate & Estate Planning Blog

Thousands of Chicagoans become victims of unfair and deceptive credit card collection practices every year. In many cases, Illinois residents who filed for Chapter 7 bankruptcy and received a discharge of their unsecured debts, including the debts they accrued on credit cards, will receive collection calls about those very same credit card debts. According to a recent article in The New York Times , “the Consumer Financial Protection Bureau (CFPB) and the attorneys general of 47 U.S. States and Washington, D.C. brought an enforcement action against JPMorgan Chase for abuse, deception, and unfairness in credit card collection cases.” Bank’s Failure to Comply with the Law If you had your credit card debts discharged in bankruptcy , you shouldn’t be receiving collection calls about the money you allegedly owe. However, hundreds of thousands of credit card accounts were not handled properly by the bank. According a news release from the CFPB, the agency identified the f...

When consumers file for bankruptcy , we usually hear about a Chapter 7 or Chapter 13 bankruptcy filing . However, according to a recent article in Forbes Magazine , there are certain situations in which an individual might file for Chapter 11 bankruptcy instead. Filing for Personal Bankruptcy Under Chapter 11 The Forbes Magazine article focuses on the current decision of rapper 50 Cent to file for bankruptcy. As it explains, “50 isn’t the first to go down this financial distressed path, but what is interesting is the type of bankruptcy he’s filed for.” Why is that? In short, “it’s somewhat unusual for individuals to file for Chapter 11; it’s a strategy often used by big companies and partnerships.” Millions of Americans file for consumer bankruptcy under Chapter 7 and Chapter 13 each year, while the number of Chapter 11 individual filings typically only number in the low thousands. What are some of the reasons an individual might file for Chapter 11 bankruptcy? Fir...

Most Chicagoans who file for consumer bankruptcy assume that, once their debts have been discharged, they won’t have to worry about seeing those debts on their credit reports, or, worse yet, they won’t have to worry about being contacted by debt collectors about lingering balances that have been discharged in bankruptcy. However, according to a recent article in The Fiscal Times , that is exactly what is happening to many consumers. There is currently no strict law “saying that, when a consumer satisfies a debt, the bank actually has to led credit reporting agencies know about it.” Because it is not a hard and fast rule, “debts that have been discharged in bankruptcy can longer on credit reports for as many as ten years, and some of these completed debts have even been resold to debt collectors.” In response, a Democrat on the Senate Banking Committee has submitted legislation that would require banks to contact credit-reporting agencies when debts are satisfied. ...

Most Chicagoans have heard that you can’t wipe out student loan debt when you file for bankruptcy . This is not exactly true—it is difficult but not impossible to discharge student loans in certain circumstances. Commentators remain concerned about the massive student loan debt in our country. In response, the U.S. Department of Education (DOE) recently released guidance about “how it will handle bankruptcy discharge requests for government-backed student loan debt,” according to a recent article in the Huffington Post . Department of Education Places Burden on Students According to the article, the guidelines from the DOE are helpful but they tend to place the heaviest burden on student borrowers. The DOE “wants to provide a balance between collecting on student loans except where those loans would pose an undue hardship on the debtor,” and thus is seeking a “balance in collecting debts versus allowing debts to be discharged.” Student borrowers still will need to prove...

If you file for personal bankruptcy , can your bank freeze assets in your account to ensure they are there to repay your creditors? That is a question that big banks like Wells Fargo have been dealing with across the country, and a recent decision on the east coast held in the consumer’s favor. According to an article in the New York Post , after several victories for Wells Fargo in other bankruptcy courts, Bankruptcy Court Judge Cecilia G. Morris held that Wells Fargo cannot freeze a debtor’s assets and control access to them. Banks Freeze Your Funds to Preserve Them for the Bankruptcy Estate Before we can think carefully about the significance of the recent bankruptcy court decision that went against Wells Fargo, it is important to understand why the bank would freeze a debtor’s assets in the first place. In general, there are two reasons a bank might freeze a debtor’s assets when she files for Chapter 7 bankruptcy : 1) the bank wants to protect the money because the d...