Oak Park Real Estate & Estate Planning Blog

Last week, we discussed bankruptcy reform from 2005 and the position that the changes to the system did not go far enough. While some experts believe that we need to do more to consumer bankruptcies , others argue that we are not doing enough to protect debtors in need. What should we make of the bankruptcy reforms that came through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)? According to a recent article from Bloomberg BNA , some consumer advocates believe that the bankruptcy reform measures that went into effect a decade ago may have caused “more harm than good.” To be sure, a panel of experts at a webinar held by the American Bankruptcy Institute (ABI) suggests that the overhaul to the consumer bankruptcy system “may be driving away consumers who are the most in need of the system’s protection.” Cons of the Bankruptcy Overhaul Some commentators emphasize that bankruptcy reform did, at least in part, what it set out to do: t...

Almost exactly ten years ago, American consumers learned about the Bankruptcy Abuse and Consumer Protection Act . The legislation became law on October 17, 2005. According to a recent article in American Banker Magazine , the legislation “was the culmination of a bipartisan effort in Congress to change a legal system that seemed to encourage bankruptcy filings during a time of prosperity.” Depending on which side of the economic spectrum you are on, you may have mixed feelings about bankruptcy reform. On the one hand, for many consumer advocates, reform efforts did not do enough to address issues impacting debtors. For example, we have yet to see bankruptcy reform measures that address private student loan payments and the limitations of income-based repayment plans. On the other hand, business advocates argue that the reform measures did not do enough to curb the rate of bankruptcy in our country. Do we need to return to the issue of bankruptcy reform? What are some of t...

For consumers who have previously filed for bankruptcy or have general concerns about their access to credit , a new rule may provide some help. According to a recent news release from the Consumer Financial Protection Bureau (CFPB), the agency has “finalized a rule to improve information reported about the residential mortgage market.” What will the rule do? In short, it will update the reporting requirements for the Home Mortgage Disclosure Act (HMDA). By updating reporting requirements, we will have better knowledge of consumer access to mortgage credit. What is the Largest Consumer Financial Market? The Mortgage Market If we want to ensure that Chicago consumers are continuing to recover from the financial crisis and are bouncing back after filing for personal bankruptcy , we need to know more about how the largest consumer financial market in the world is working. What is the largest consumer financial market in the world? According to the CFPB Director Richard C...

What should individuals do when personal finances and small business expenses together result in insurmountable debt ? In many cases, Chapter 7 bankruptcy can be an option for Chicagoans who own small businesses and are dealing with a substantial amount of debt related to their business. A recent article in Forbes Magazine discussed the pros and cons of Chapter 7 bankruptcy for adults who are nearing retirement and have been careful with personal finances throughout their working lives but have significant business debt. By taking a look at the scenario presented in the article, we can see how filing for Chapter 7 bankruptcy can do more than help individuals who are facing credit card debt or insurmountable medical bills. Chapter 7 bankruptcy can help individuals who have little to no credit card debt but have opened business that are, as the article describes, “hemorrhaging dollars.” Nearing Retirement and Considering Bankruptcy The scenario presented in the F...

When a loved one is sick or passes away, most of us are not thinking about consumer debt . But at some point, you may need to deal with the debt that a loved one leaves behind, particularly if the deceased person was your spouse. According to a recent article in USA Today , dealing with a loved one’s terminal illness while worrying about credit card debt can be particularly difficult. What do you need to know about consumer debt as it pertains to a recently deceased loved one? Can you be held accountable for bills and credit card debt owed by another? Family Members and Debt Possession If your spouse charges a significant amount of credit card debt, will you be responsible for that debt in the event of death? That is the question that one USA Today reader asked, concerned about consumer debt and bankruptcy. An article drafted by the Federal Trade Commission (FTC) provides some useful information about how a loved one’s debt can affect others. In general, family membe...

Why do some states have a higher rate of consumer bankruptcy than others? According to a recent post from Credit.com , personal bankruptcy affects different states to varying degrees. Illinois, as it turns out, has the fourth-highest rate of consumer bankruptcy in the country. To better understand why more Illinoisans are filing for bankruptcy than residents of other states, we should take a closer look at why debtors decide to file for Chapter 7 or Chapter 13 bankruptcy in the first place. Reasons for Filing for Bankruptcy Bankruptcy can be one of the most practical and successful ways to help a consumer deal with unexpected debt burdens and insurmountable financial hardships. There are many reasons that individuals file for bankruptcy, including but not limited to: Loss of a job; Unexpected medical expenses; Growing credit card debt; and Inability to make mortgage payments. If you are getting yourself into more debt and are unable to pay down b...