Oak Park Real Estate & Estate Planning Blog

Many credit cards give consumers the option of adding an “authorized user” to the card. There are many benefits to this option, both for the credit account holder and for the authorized user. However, having an authorized user on your account or being an authorized user on an account can get complicated if either the authorized user or the account holder decides to file for personal bankruptcy . We want to say more about authorized users and consumer bankruptcy . What is an “Authorized User”? Being named as an authorized user allows you to build or rebuild your credit if the account holder is in good standing on the credit card. In other words, the authorized user can have access to the same credit line as the account holder, and the authorized user’s credit score will reflect access to the account and how payments are made on the account. For someone who is trying to rebuild credit after bankruptcy, becoming an authorized user can be extremely helpful. However, as an ...

Over the last year, we have discussed the case of Taggart v. Lorenzen (2019) and the U.S. Supreme Court’s decision to consider whether a creditor can be held in civil contempt for attempting to collect a debt after the bankruptcy court issues a discharge order in a consumer bankruptcy case. The U.S. Supreme Court recently released its decision in this case, and the decision was unanimous. Writing for the majority, Justice Breyer clarified that a creditor can be held in civil contempt only in situations in which there is “ no fair ground of doubt as to whether the order barred the creditors conduct.” The Court went on to clarify that the holding means that “civil contempt may be appropriate if there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful.” As you might realize from reading this language from the case, the Court’s decision is friendlier to creditors in situations involving bankruptcy cases where the creditor continues t...

Is Chapter 7 bankruptcy currently the best decision in a situation in which a large percentage of debt is made up of student loans? A recent article in Diverse Education highlighted the fact that it is often difficult to have student loans discharged in Chapter 7 bankruptcy, and that a large percentage of debtors with student loan debt do not actually end up with the financial “fresh start” that liquidation bankruptcy typically promises. As the article points out, for those debtors with student loan debt who recently filed for bankruptcy, on average student loan debt made up about 49% of the debt. For a majority of those debtors, student loan debt remained after the Chapter 7 bankruptcy discharge . Given that student loan debt is making up a larger percentage of debt in liquidation bankruptcy cases and frequently is not being discharged, consumer protection advocates are asking whether Chapter 7 bankruptcy can really provide a “fresh start” without a change to the bankruptcy rules...

Oak Park residents who are struggling with debt and dealing with frequent contact from debt collectors may know that the Consumer Financial Protection Bureau (CFPB) recently released a proposal that would include additional protections from consumers but also would give debt collectors more opportunities to contact consumers. As a recent article in USA Today explains, “more than 20 U.S. Senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal that would allow debt collectors to send unlimited texts and emails to consumers, as well as call them seven times a week per debt.” Concerns About How CFPB Plans Will Impact Fair Debt Collection Practices Act The Fair Debt Collection Practices Act (FDCPA) provides consumers with rights when it comes to debt collection, and it limits the amount and type of contact a debt collector can make with a consumer. For example, the FDCPA prohibits a debt collector from calling at inconvenient times—typically very earl...

Most consumers in Oak Park who are considering bankruptcy are faced with the question of whether to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy , and many people want to learn more about the distinction between these two bankruptcy chapters. While Chapter 7 and Chapter 13 bankruptcy certainly are the most common forms of consumer bankruptcy, sometimes consumers will need to file for Chapter 11 if bankruptcy. Given that Chapter 11 and Chapter 13 bankruptcy actually have more similarities in terms of structure than Chapter 7 and Chapter 13 bankruptcy, we want to tell you more about the differences between these two chapters and to explain why a consumer should start with Chapter 13 bankruptcy—instead of Chapter 11 bankruptcy—if it is an option. Both Chapter 13 and Chapter 11 are Reorganization Bankruptcies Under the U.S. Bankruptcy Code , both Chapter 13 and Chapter 11 bankruptcy are forms of reorganization bankruptcy. Unlike a Chapter bankruptcy (which involves liquidatin...