Oak Park Real Estate & Estate Planning Blog

The consumer bankruptcy process could look quite different in 2021 if proposed reforms pass in the new year. You might already know that U.S. Senator Elizabeth Warren (D-Mass.) has introduced the Consumer Bankruptcy Reform Act of 2020 (CBRA) with House Judiciary Chairman Jerrold Nadler (D-N.Y.). We have discussed some of the proposed changes that would come with the bankruptcy reform package, and its relation to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which made it more difficult for many consumers to be eligible for Chapter 7 bankruptcy. As we near the early weeks and months of 2021, we want to highlight some of the top changes that could come for personal bankruptcy if the proposed legislation passes. 1. Credit Counseling Will Not be Required The BAPCPA required any consumer seeking a bankruptcy discharge to go through credit counseling and to provide the court with a certificate of completion before any debts could be discharged. The newly...

If you own a small business for which you provided a personal guarantee on a loan, or if you provided a personal guarantee for a family member’s business or other type of loan, you could end up in a very complicated situation if the business ultimately needs to file for bankruptcy , or if the other party (for which you gave the personal guarantee) ends up filing for bankruptcy. The issue of personal guarantees and consumer bankruptcy is currently attracting more notice given the terms of some of the SBA loans related to COVID-19 relief. We want to provide you with more information about loans with personal guarantees, and to say more about how consumer bankruptcy may be the only option to discharge a loan with a personal guarantee despite a business bankruptcy. SBA Loans That Required Personal Guarantees Anyone who owns a business already might be familiar with the types of business loans that can require personal guarantees, including specific kinds of SBA loans awarded during the CO...

If you are considering personal bankruptcy , you might have come across talk of bankruptcy loopholes and you may be wondering what those could be. According to the Oxford English Dictionary, a loophole is “an ambiguity or inadequacy in the law or a set of rules.” More colloquially speaking, a loophole is a term that is sometimes used in the law to refer to a way of avoiding or evading a particular law or the specific language in a statute. Bankruptcy loopholes, as such, are ways that some people have been able to prove eligibility for Chapter 7 bankruptcy even though they should not actually have been able to pass the means test, for example. There are other kinds of bankruptcy loopholes for both consumers and business owners, but we want to focus on the ways in which bankruptcy loopholes unfairly benefit some consumers while leaving others without the ability to file for Chapter 7 bankruptcy. As you may know, Senator Elizabeth Warren’s recently proposed bankruptcy reform legislatio...

If you are considering the possibility of filing for Chapter 7 bankruptcy , you may know that you need to meet certain requirements in order to show your eligibility for this type of bankruptcy. Back in 2005, changes to U.S. bankruptcy law made it more difficult for consumers to be eligible for Chapter 7 bankruptcy, which is a type of liquidation bankruptcy. Those changes to the law were designed to prevent abusive bankruptcy filings in situations where the debtor actually has the means to repay some of the debt that they are seeking to discharge. In practice, however, those changes to the law have made the bankruptcy process more difficult and complicated for many debtors in Oak Park and across Illinois. The U.S. Department of Justice recently issued changes to median household incomes, which will result in changes concerning which debtors will need to take the “means test” in order to qualify for Chapter 7 bankruptcy in the U.S. We want to tell you more about these changes and to en...

As you may know, 2005 was the last year of major bankruptcy law reform with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which effectively made it more difficult for many individuals and families to file for Chapter 7 bankruptcy in Illinois and across the country. Over the last 15 years, the U.S. has grappled with a wide variety of large-scale financial issues that have impacted consumers, from the real estate crash of 2008 and the resulting recession and foreclosure crisis to the COVID-19 pandemic that has resulted in the losses of millions of jobs across the country. Recognizing the ways in which the current bankruptcy system simply does not work for many struggling consumers, members of Congress are pushing for new bankruptcy reform. We want to tell you more about recently proposed federal legislation that seeks to make changes to the current consumer bankruptcy system in this country. Senator Elizabeth Warren Proposes Bankruptcy Reform According...

If you are struggling with debt in Oak Park and you are weighing your options, you might be considering personal bankruptcy . Yet if you do not have any experience with the consumer bankruptcy process, and you do not have any friends or family members who have filed for bankruptcy, it can be difficult to understand how the process works. In particular, you might be wondering, “Is there more than one type of consumer bankruptcy ?” If you have done a quick internet search for bankruptcy, you have probably discovered that there are many different chapters under which a bankruptcy case can be filed, and it can be extremely confusing to navigate the U.S. Bankruptcy Code . You may notice that some types of bankruptcy can be used for individuals and businesses alike, while others are limited to individuals and others still are limited only to businesses. All of that is a lot of information to parse. Generally speaking, there are two major types of consumer bankruptcy, but sometimes consume...

Many debtors who are struggling with overwhelming debt start looking into options for a liquidation bankruptcy in which their non-exempt assets will be liquidated and they can receive a relatively quick discharge that comes with the ability to get a fresh start financially. However, given that debtors must pass the “means test” in order to prove that they are eligible for Chapter 7 bankruptcy, many debtors realize that they cannot file for a liquidation bankruptcy under U.S. bankruptcy law since they earn a steady paycheck or earn a decent salary. For those debtors, Chapter 13 may be the only bankruptcy option. At first, you might have concerns about whether Chapter 13 bankruptcy is really what you are seeking, and you might be wondering, “What is Chapter 13 bankruptcy good for?” We want to emphasize that Chapter 13 bankruptcy is a powerful tool for debtors in Oak Park, Illinois and across the country, and it can help you to obtain the financial relief you are seeking. The follow...

Does the bankruptcy process discriminate against certain types of consumers? Even if the bankruptcy process itself is not inherently discriminatory, does it ultimately have discriminatory effects on some individuals and communities? According to a recent article in the Wall Street Journal , a new study says that “Black people out of all bankruptcy filers are twice as likely on average to file for a more costly type of personal bankruptcy than debtors of other races.” What are the reasons for the disparity, and what can be done to make the consumer bankruptcy process a more egalitarian one? Researchers Find Bias in Consumer Bankruptcy The idea that there is bias in the consumer bankruptcy process is not a new idea. Researchers have been exploring this idea for about a decade. A 2012 article in The New York Times argued that “Blacks are about twice as likely as whites to wind up in the more onerous and costly form of consumer bankruptcy as they try to dig out from their debts.” No...

When you are filing for personal bankruptcy in Oak Park , one of the last things you want to happen is for an unwanted surprise to pop up in your case. To be sure, any surprises in bankruptcy cases typically mean that there is a problem with your bankruptcy filing, and your bankruptcy discharge ultimately could be at risk. When you work with an experienced Oak park bankruptcy lawyer on your case, you can help to reduce—and often prevent entirely—the risk of an unwanted surprise coming up when you are planning for a bankruptcy discharge. In the meantime, we want to give you some tips for avoiding unwanted surprises in your bankruptcy case. Do Not Try to Handle Your Bankruptcy Case on Your Own Bankruptcy law is extremely complicated, and the U.S. Bankruptcy Code can be incredibly difficult to understand if you do not have experience handling bankruptcy cases. Whether you are planning to file for Chapter 7 or Chapter 13 bankruptcy, it is much more likely that an unwanted and unexpect...

If you do not already know that the federal Fair Debt Collection Practices Act (FDCPA) provides protections for consumers who are facing debt collection , now you know. The FDCPA prohibits various types of behavior and debt collection strategies by creditors and debt collection companies, including lying to consumers about debts they owe, making certain kinds of threats when contacting debtors, and even contacting debtors at odd hours of the day. These are just a few examples of some of the protections provided through the FDCPA. Yet the FDCPA does not explicitly address debt collection methods via social media, and the federal government recently changed the rules pertaining to social media use and debt collection strategies. As a report from ABC News explains, you still have rights under the FDCPA when it comes to debt collection methods and strategies, but you may not be able to prevent debt collectors from using social media or other forms of electronic communication to reach ...

Over the past several months or even years, you might have been considering your options for consumer bankruptcy . Perhaps you have looked into options for Chapter 7 bankruptcy and Chapter 13 bankruptcy, and you feel certain that personal bankruptcy is the best option for you to get a handle on your debt and to rebuild your finances. Maybe you are planning to file for a liquidation bankruptcy under Chapter 7, or you are hoping to file for Chapter 13 bankruptcy because you want to rely on the automatic stay to prevent foreclosure on your home. Or, perhaps you do not know for certain which chapter of bankruptcy is right for you. If you want to file for bankruptcy, it is critical to seek advice from an Oak Park bankruptcy attorney since everyone has a distinct set of facts in their case. However, we can provide you with more information about the basic steps you will need to take once you determine that you want to move forward with a bankruptcy filing. Hire a Bankruptcy Lawyer to Assi...

Filing for consumer bankruptcy is a complex process, and there are many intricate requirements that can make it difficult to determine your eligibility for Chapter 7 bankruptcy, for example, or whether a certain type of debt will actually be dischargeable in your bankruptcy case. No matter what, it is important to remember that many personal bankruptcy myths exist that can cloud your thinking when it comes to filing for consumer bankruptcy. We want to dispel more of those myths by returning to information provided by the American Bankruptcy Institute (ABI), U.S. News & World Report , and NerdWallet . After you have learned more about bankruptcy myths, it is time to seek advice from an experienced Oak Park bankruptcy lawyer. Myth: You Will Lose All of Your Belongings Bankruptcy exemptions in Illinois allow you to exempt a wide variety of assets if you are filing for a Chapter 7 liquidation bankruptcy. You can exempt a certain amount of equity in your home, equity in your moto...

Anyone who is considering personal bankruptcy has likely done some internet searches for information about personal bankruptcies under Chapter 7 and Chapter 13. While there is certainly helpful information available about consumer bankruptcy , from eligibility for certain types of bankruptcy to types of dischargeable debt, there are also a lot of misconceptions out there. There are many myths out there about bankruptcy, and you need to be able to discern what is factual and what is not. We want to dispel some common consumer bankruptcy myths for you and to provide you with the information you need as you are considering your options for managing debt. We have gathered information for you from the American Bankruptcy Institute (ABI), U.S. News & World Report , and NerdWallet to help you learn more about what is true and what is false in terms of personal bankruptcy. Myth: Your Credit Will be Ruined Forever Many people who are thinking about Chapter 7 or Chapter 13 bankruptcy...

While many consumers worry about the aftermath of filing for personal bankruptcy , it is critical for you to know that you can start improving your credit almost immediately after you receive a bankruptcy discharge. For many debtors in Illinois and across the country, Chapter 7 bankruptcy can allow for a fresh financial start, while Chapter 13 bankruptcy can allow for debt reorganization and can, in many cases, allow homeowners to avoid bankruptcy. Yet many debtors hold off on filing for bankruptcy because they assume it will be difficult to rebuild credit after a consumer bankruptcy. We want to emphasize that you can rebuild your credit after filing for bankruptcy, and the following are some key steps to get you started. If you have additional questions or need assistance with your bankruptcy filing, you should seek advice from an experienced Oak Park consumer bankruptcy attorney. Apply for a Retail Credit Card or a Secured Credit Card In order to rebuild your credit after a consum...

If you are having difficulty managing your debt and are considering consumer bankruptcy, you may be wondering whether Chapter 7 bankruptcy is better for you than Chapter 13, or vice versa. Many debtors think that it can be possible to choose between Chapter 7 and Chapter 13 bankruptcy , but this is not often the case. A debtor who is eligible for Chapter 7 bankruptcy likely will not be eligible for Chapter 13 bankruptcy, and vice versa. Ultimately, Chapter 7 bankruptcy could better meet your needs than Chapter 13 bankruptcy, but that alone does not mean that you will be eligible to file for Chapter 7 bankruptcy. We will explain more below, but if you have questions, you should get in touch with an experienced Oak Park bankruptcy attorney to discuss your options. Chapter 7 Being Preferable Does Not Mean That You are Eligible You might be thinking that you would prefer to file for Chapter 7 bankruptcy because you can receive a discharge of your debts relatively quickly, and you can ge...

During this time of economic downturn and massive unemployment, many Oak Park, IL residents and Americans across the country are wondering if consumer bankruptcy is the right choice for them. Yet, as a recent article in NerdWallet underscores, debtors everywhere often fear bankruptcy, and it can prevent those debtors from seeking the relief they need to move forward. As that article underscores, there are so many myths about bankruptcy that drive debtors’ fears and worries about filing for bankruptcy , when Chapter 7 or Chapter 13 bankruptcy could benefit individuals and families who are struggling with debt. The following are just some of the reasons that you should not fear bankruptcy and should get in touch with an Oak Park bankruptcy attorney to learn more about your options for filing. You Should Know That You Will Not Lose All of Your Property If you are considering Chapter 7 bankruptcy, which is a form of liquidation bankruptcy, you should know that all of your assets will ...

Consumers in Oak Park, Illinois and across the country are struggling during the coronavirus pandemic. Many have lost their jobs, and some are considering the possibility of consumer bankruptcy . When you are already struggling with substantial debt, enduring abusive debt collection practices can be devastating. Debt collectors are required to abide by the federal Fair Debt Collection Practices Act (FDCPA), but many debt collectors violate federal law. According to a recent news release from the Federal Trade Commission (FTC), the FTC in conjunction with “more than 50 federal and state law enforcement partners,” initiated a “law enforcement and outreach initiative to protect consumers from phantom debt collection and abusive and threatening debt collection practices.” Taking Enforcement Actions Through Operation Corrupt Collector The newest initiative from the FTC and its partners is called Operation Corrupt Collector, and it “includes five FTC law enforcement actions,” which incl...

If you filed for personal bankruptcy on your own—i.e., without help from an experienced bankruptcy lawyer—you could find yourself in a situation in which your bankruptcy discharge is denied. Given that consumer bankruptcy may be your only option for managing your debt and finding a way to get back on track financially, learning that your debts will not be discharged can be devastating. In some cases, the court might not discharge debt due to an error you made at some point during your bankruptcy case—from providing incorrect information unintentionally to failing to take one of the required steps in a bankruptcy case. In other situations, it could be that your debts are not dischargeable under the U.S. Bankruptcy Code . In other scenarios, the bankruptcy court might believe you engaged in bankruptcy fraud, in which case you could be facing additional penalties or legal problems beyond simply not getting your debt discharged. No matter what the cause, you should seek advice as soon...

If you are a consumer who applied for an SBA disaster loan in order to support your business during the coronavirus pandemic, there are a couple of ways in which Paycheck Protection Program (PPP) loans and the Economic Injury Disaster Loan (EIDL) program ultimately could impact consumers when it comes to personal bankruptcy . We want to tell you more about these loans and how they could come to have an impact on small business owners who are considering consumer bankruptcy. To explain the potential links between these SBA loans and consumer bankruptcy, we will tell you more about the loans themselves first. Then we will discuss some of the ways in which these loans could impact a consumer bankruptcy case. What Small Business Owners Should Know About SBA Loans According to a recent CNBC article , a large number of the U.S. Small Business Administration (SBA) disaster loans, which include PPP and EIDL loans, were paid out to small businesses. Many of these businesses are sole proprie...

If you own a small business and you are having significant debt problems, you might be considering how bankruptcy laws could help you to get back on track with your business finances. In particular, given the ways in which the COVID-19 emergency has impacted small businesses in Chicagoland and across the country, many small business owners are struggling to keep their doors open, and some are considering the possibility of bankruptcy. For businesses that are structured as sole proprietorships, it is important to work with an Oak Park bankruptcy lawyer who has experience handling consumer bankruptcy cases because these bankruptcies ultimately will be personal bankruptcies . Businesses that are sole proprietorships are in effect the same entity as the business owner. Accordingly, any debts of the business are also the personal debts of the business owner, and vice versa. This means that a sole proprietorship cannot, on its own, file for bankruptcy without affecting the personal fina...

If you decide to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy , a bankruptcy trustee will be assigned to your case according to U.S. bankruptcy law . Depending upon the type of bankruptcy, the trustee will play different roles and will have a distinct function. Your Oak Park bankruptcy attorney can ensure that you file all materials appropriately and that you do not run into any errors concerning the bankruptcy trustee. In the meantime, we want to provide you with more information about the role the bankruptcy trustee plays in different types of consumer bankruptcy cases. Chapter 7 Bankruptcy and the Trustee’s Role In a Chapter 7 bankruptcy case, the trustee will play a different role than in a Chapter 13 case. Since Chapter 7 bankruptcy is a liquidation bankruptcy, the debtor will need to provide detailed information about all assets (both exempt and non-exempt), and all non-exempt assets will be liquidated (i.e., sold) in order to repay existing creditors. Here is where...

Consumer bankruptcy is an option for many Americans who are struggling with debt and need help moving forward with their financial lives. Regardless of the state of the economy, a certain number of consumers will experience difficulty managing debt and will seek advice from a bankruptcy lawyer about filing for Chapter 7 or Chapter 13 bankruptcy . In some situations, when a consumer is not eligible for Chapter 13 bankruptcy due to high amounts of secured or unsecured debt, that consumer might end up filing for Chapter 11 bankruptcy. Generally speaking, most of us assume that lower rates of consumer bankruptcy mean that fewer Americans are struggling with debt, with higher rates of bankruptcy suggest that more consumers are having difficulty making ends meet. Yet according to a recent article in Bloomberg Law , particularly low rates of personal bankruptcy might also be a sign of problems. Indeed, according to that article, consumer bankruptcy rates may be “too low” for comfort. Bankr...

Are you considering personal bankruptcy ? Whether you are thinking about filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you might be wondering whether you can handle your case on your own. You might be thinking to yourself: I do not have much property at all, and I just want to file for a liquidation bankruptcy quickly in order to get it over with and to get a bankruptcy discharge. Or you might be thinking: I want to file for Chapter 13 bankruptcy, and I already have some ideas for a debt repayment plan. In such scenarios and in other cases, you might be asking yourself if you really need to hire a bankruptcy lawyer. Bankruptcy law is extremely complicated. While it may be possible for some debtors to go through a bankruptcy case successfully without a lawyer, this is a complex area of the law, and you should really have an experienced Oak Park bankruptcy lawyer on your side. The following are some of the top reasons to hire a bankruptcy attorney for your bankruptcy case....

Struggling with debt is never easy, and many consumers throughout the Chicago area have made the decision to file for consumer bankruptcy . Yet reaching the conclusion that either Chapter 7 bankruptcy or Chapter 13 bankruptcy is the right option for you can be difficult. Many debtors do not know if they have other options available to them to avoid bankruptcy, or if they are even eligible for the type of bankruptcy they are considering. If you have questions about whether it is time to file for personal bankruptcy, you should always work with an experienced Oak Park bankruptcy lawyer on your case. In the meantime, however, the following are some questions you can ask yourself to determine whether filing for bankruptcy could be the right decision for you. Are Your Debts Dischargeable? The first question you will want to consider is whether you have the types of debts that are dischargeable in a consumer bankruptcy case. If your debts are not dischargeable, filing for personal bankrup...

When you are considering personal bankruptcy and some of your debt is tax debt, it is critical to understand that tax debt is not like other types of consumer debt when it comes to bankruptcy. To be sure, there are only specific circumstances in which you can be eligible to discharge tax debt, and only particular types of tax debt can be discharged in a consumer bankruptcy case. The following are three important things to know about tax debt and consumer bankruptcy. If you have additional questions or need assistance with your case, you should reach out to a Chicago consumer bankruptcy lawyer. 1. You Should Not Assume Your Tax Debt is Dischargeable in a Consumer Bankruptcy Case If you have tax debt and you are planning to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you should not assume that your tax debt will be dischargeable. As the Internal Revenue Service (IRS) explains, bankruptcy can be an option to discharge tax debt in some circumstances, but not all tax debt ...