Oak Park Real Estate & Estate Planning Blog

Last year, the U.S. Supreme Court agreed to hear a case concerning a possible link between the Fair Debt Collection Practices Act (FDCPA) and businesses engaged in foreclosure proceedings. That case, Obduskey v. McCarthy & Holthus LLP , had the potential to expand the FDCPA’s definition of debt collectors to include certain attorneys who engage in debt collection practices . We discussed the case in some detail, and explained that, depending upon how the U.S. Supreme Court ruled on the case, Obduskey could have broader implications that ultimately could impact debtors in Illinois. The Court heard the case in January, and it released its ruling on March 20, 2019. In short, in a unanimous ruling, the Court found that, in the specific case, the business engaged in nonjudicial foreclosure proceedings was not a “debt collector” under the FDCPA. However, the ruling was a narrow one. We want to say more about the case and its potential implications. Facts of the Obduskey Case Before w...

We recently discussed some common mistakes to avoid when taking the “means test” to determine your eligibility for Chapter 7 bankruptcy . We want to provide you with more information about common mistakes to avoid when taking the means test. In order to be eligible for a liquidation bankruptcy , the U.S. Courts clarify that a consumer must be able to pass the means test. However, in many cases, consumers make mistakes when taking the means test and incorrectly come to the conclusion that they are ineligible for a liquidation bankruptcy. In Part I, we told you about three common mistakes debtors make when taking the means test. Here, we will continue that list of common errors. Taking the Means Test When You are Not Required to do So As we mentioned above, the means test is necessary in most cases for consumers to prove that they are eligible for Chapter 7 bankruptcy and that a liquidation bankruptcy would not be abusive. However, there are a couple of key situatio...

If you are thinking about filing for Chapter 7 bankruptcy in Oak Park, Illinois , it is important to learn more about how a consumer qualifies for this type of bankruptcy. In short, anyone who wants to file for personal bankruptcy under Chapter 7 will need to pass what is known as the “means test.” The U.S. Courts explain that the means test is used to “determine whether the chapter 7 filing is presumptively abusive.” To put that another way, the means test is designed to determine whether a debtor has too much income, or too much earning ability, to be eligible for Chapter 7 bankruptcy without it being unfair. Since Chapter 7 is a liquidation bankruptcy, a debtor’s non-exempt property will be liquidated, and the debtor can get a fresh start with a bankruptcy discharge. Yet for many consumers, taking the means test is complicated, and it is easy to make mistakes without the help of a bankruptcy lawyer. The following are some common mistakes that you should avoid when you ar...

Currently, when a disabled veteran files for personal bankruptcy , that veteran’s disability benefits are classified as disposable income. Accordingly, a disabled veteran’s benefits can be seized if that veteran files for Chapter 7 bankruptcy . Veterans’ benefits are treated differently than many other benefits in bankruptcy since most other benefits are exempt. Recognizing the harms of not protecting a disabled veteran’s benefits, two U.S. senators recently introduced a bill that is designed to make disabled veterans’ benefits exempt in bankruptcy. According to a recent article in Military Times , Senator Tammy Baldwin and Senator John Cornyn introduced a bipartisan bill known as the Honoring American Veterans in Extreme Need Act, or the HAVEN Act for short. We want to say more about the proposed legislation and how it would help disabled veterans who file for consumer bankruptcy. How the HAVEN Act is Designed to Help Veterans in Bankruptcy The HAVEN Act has su...

Now that we are in tax season, many Oak Park residents are filing their income tax returns and some are expecting refunds. When you are anticipating an income tax refund but are also thinking about filing for personal bankruptcy , it is important to learn more about how tax refunds are handled in a bankruptcy proceeding. In other words, will you get to keep your tax refund if you file for consumer bankruptcy ? There is no straightforward answer to that question since the answer depends on a number of different factors. We will say more about how income tax refunds are treated in a bankruptcy case. Timing of When You Earned the Income Tax Refund The first question you should ask when determining whether you will get to keep your income tax refund when filing for Chapter 7 bankruptcy is when you earned the income that was taxed and for which you are receiving a refund. Under the U.S. Bankruptcy Code , any refund that results from income earned and taxed prior to the date that you f...

When you are struggling with debt , or when you first begin to take on more debt than you can manage, you might be wondering about how much time passes from the stage of debt collection to repossession, to a claim being filed against you, to the possibility of consumer bankruptcy . In other words, what is the typical timeline for consumer debt, and for substantial debt that ultimately results in personal bankruptcy? A recent article in Business.com discusses the debt timelines, and we want to provide you with some additional information about how this timeline usually works. While the following is a general timeline for thinking about debt and bankruptcy, it is important to recognize that each consumer’s situation has its own set of facts, and nobody has the same exact timeline. However, it can be helpful to understand the steps in the process of debt collection, and specific timetables for certain actions under the law. You are Struggling to Make Payments on Your Debt This Month T...