Oak Park Real Estate & Estate Planning Blog

Should debt collectors be punished if they continue to try to collect on debts that have been discharged in bankruptcy ? Consumer protection advocates argue that they should, but courts across the country have not agreed about the answer to this question. Given that bankruptcy judges have reached different conclusions concerning “how easy it should be to punish debt collectors who pursue debt even after a person is no longer obligated to pay,” according to a recent article in The Wall Street Journal , the U.S. Supreme Court will now decide the issue. We previously discussed this case, Taggart v. Lorenzen , after the U.S. Supreme Court agreed to hear the case. Now that the Supreme Court has heard arguments in the case, we have a better sense of the types of questions the Court focused on during oral arguments. We want to say more about how the Court approached the issues in the case, and to discuss possible outcomes. Key Facts from Taggart v. Lorenzen As a brief reminder about what is...

Should current consumer bankruptcy law be revised to better serve debtors across the country? According to a recent article in The Wall Street Journal , a new report from the American Bankruptcy Institute (ABI) Commission on Consumer Bankruptcy contends that “bankruptcy court . . . has lost its power to help people fix some financial problems stemming from the massive social and economic shifts that have taken place since modern bankruptcy law was passed in 1978.” In other words, consumer bankruptcy law is outdated, and it needs to be revised to take into account the 21st century needs of debtors. The law is now over 40 years old. Bankruptcy Reform in 2005 Does Not Help Consumers in 2019 The 2005 bankruptcy reform is among the first issues that the report takes up. When new bankruptcy rules were put into place in 2005, fewer consumers were filing for bankruptcy. The reform also led to the “means test,” which makes it significantly more difficult for many individual debtors to file...

Given that it is tax time, now is a particularly good time for anyone who has tax debt—or anticipates owing tax debt after this year’s tax cycle—to understand how the Internal Revenue Service (IRS) handles debt collection for tax debt. A recent article in Forbes discusses how the IRS currently handles tax debt, and what debtors should expect. In some cases, tax debt can be discharged in a bankruptcy proceeding. However, in many cases, tax debt is not dischargeable. For anyone who owes tax debt, it is important to learn more about how the federal tax debt collection process works, and what your options might be for filing for consumer bankruptcy . How Does the IRS Handle Tax Debt and Debt Collection? As the Forbes article explains, starting in 2017 the IRS “was required to hand over some unpaid tax bills to private agencies for collections.” Even though previous efforts to use private debt collection companies for collecting tax debt, the IRS moved forward with a private debt colle...

Consumers decide to file for bankruptcy in order to deal with seemingly unmanageable debt, and to move forward with their lives without constant worry about finances. Consumer debt arises from many different sources, including credit cards, auto loans, medical care, and other unexpected but necessary expenses. According to a recent report from Bloomberg, U.S. credit card debt has risen significantly in 2019, and at the same time, more consumers are defaulting on loans, according to an article in Yahoo! Finance. What are the implications of rising consumer debt combined with increasing consumer defaults? Should more Americans consider the benefits of Chapter 7 bankruptcy or Chapter 13 bankruptcy to manage debt? Credit Card Spending Declined in December But Rose in the New Year According to the Bloomberg report, credit card spending among Americans was down during December and the holiday season, and spending began to pick up at the start of 2019. By the end of January 2019, the ...

If you obtain a settlement after filing a personal injury lawsuit, is that settlement protected in consumer bankruptcy ? Under the U.S. Bankruptcy Code, settlements are considered to be a type of property. Accordingly, if you are filing for Chapter 7 bankruptcy , any money you obtain from a settlement is going to be considered property of the estate and subject to liquidation unless it is exempt. We want to explain more about personal injury settlements and discuss a recent case concerning an NFL player’s settlement for brain damage and chronic traumatic encephalopathy (CTE) as a result of sustaining concussions while playing football. The recent case suggests that bankruptcy courts may be open to expanding personal injury settlement exemptions in certain cases. How Personal Injury Settlements can Qualify for an Exemption in Illinois Exemptions allow a debtor to retain certain property in the event of bankruptcy. This means that any exempt property will not be liquidated in order t...