Oak Park Real Estate & Estate Planning Blog

When you are thinking about filing for consumer bankruptcy or looking into your options, it can be difficult to know which information is essential to your case, and what bankruptcy myths you could be encountering from friends or family members, or from internet searches. Our experienced Oak Park bankruptcy lawyers want to give you the information you need as you consider the possibility of Chapter 7 or Chapter 13 bankruptcy. The following are some of the top things to know about consumer bankruptcy in the New Year. Consumer Bankruptcy Can Help You to Get Back on Track Financially Consumer bankruptcy under any chapter can help you to get back on track financially, whether that involves a relatively quick discharge of debts through Chapter 7 bankruptcy or a longer repayment plan after which debts can be discharged under Chapter 13 bankruptcy. Chapter 7 and Chapter 13 are Two Different Types of Consumer Bankruptcy Both Chapter 7 and Chapter 13 are types of consumer bankruptcy, and th...

If you are struggling with debt, you might be considering the possibility of filing for bankruptcy . Yet you might not understand the differences between Chapter 7 and Chapter 13 bankruptcy, and you may be much more familiar with how Chapter 7 bankruptcy works. Indeed, many Americans think of Chapter 7 bankruptcy—a liquidation bankruptcy—when they imagine the bankruptcy process. However, Chapter 13 bankruptcy works much differently, and it has many benefits for debtors who are eligible. Our Oak Park bankruptcy lawyers are here to tell you more. Eligibility as a Wage Earner You might have heard that you will need to pass the “means test” in order to be eligible for consumer bankruptcy and that you cannot have assets or substantial earnings in order to file. It is critical to understand that these requirements only apply to Chapter 7 bankruptcy and not to Chapter 13 bankruptcy. To qualify for Chapter 13 bankruptcy under the U.S. Bankruptcy Code , you will need to show that you have a...

During the holiday season and in the weeks and months that follow, many Americans struggle with debt. Consumer debt can be extremely difficult to manage, especially when your income and assets are insufficient to allow you to get out of debt. Making the minimum monthly payments on credit cards and other bills can lead to increasingly more debt and more anxiety. Consumer bankruptcy may be able to help. If you are considering consumer bankruptcy, one of our dedicated Oak Park bankruptcy lawyers can speak with you today about your circumstances and your eligibility for Chapter 7 or Chapter 13 bankruptcy. In the meantime, the following are some of the top benefits of Chapter 7 and Chapter 13 bankruptcy. Debt Collectors and Debt Lawsuits Must Stop One of the great benefits of consumer bankruptcy that applies as soon as you file your bankruptcy petition is the automatic stay . Under U.S. bankruptcy law, the automatic stay prevents any additional action from being taken to collect your d...

The holiday season can be a joyful time of the year, but it is also traditionally a time in which consumers amass a significant amount of debt. For consumers who are already struggling with debt, charging gifts on credit cards and spending extensive amounts of money on holiday parties, dinners, and décor can be overwhelming, especially when the holiday season comes to an end and the debt remains. If you were already considering consumer bankruptcy before you took on additional debt over the holidays, you might assume that it makes sense to get started on your bankruptcy case in the early days of the New Year. Yet filing for consumer bankruptcy so soon after you have incurred a substantial amount of debt can actually be a problem. Our Oak Park bankruptcy lawyers can assist you with any questions you have about the consumer bankruptcy process or filing for bankruptcy during or after the holidays. In the meantime, the following are some things you should know about personal bankruptcy...

When you are struggling with debt, you might be considering personal bankruptcy as an option, but you also may be thinking about debt settlement. Debt settlement is often depicted as an alternative to bankruptcy that can allow struggling consumers to deal with debt without having to go through the bankruptcy process. Yet debt settlement is not always so straightforward, and bankruptcy is not nearly as devastating to your financial record or credit as you might think. Our Oak Park bankruptcy attorneys can provide you with more information about debt settlement and bankruptcy, and we can help you to find the best solution to your debt problems. Debt Reduction Versus Debt Elimination A debt settlement is a particular kind of agreement that a consumer enters into with one or more creditors in order to reduce the amount of debt the consumer owes, and to repay a smaller portion of the money borrowed. Differently, in both Chapter 7 and Chapter 13 bankruptcy, remaining eligible debt at the...

When you are being contacted by debt collectors, regardless of whether or not you owe the debt the collector is seeking, it is essential to know that you have rights as a consumer. Indeed, the Fair Debt Collection Practices Act (FDCPA) provides numerous protections to consumers, including protections against harassment from debt collectors, fraudulent or deceptive debt collection practices, and contact at odd hours of the day or at your place of employment. However, new rules that have been approved by the Consumer Financial Protection Bureau (CFPB) allow debt collectors to make more forms of contact. Those rules recently took effect, according to an NPR report . Our Oak Park consumer protection attorneys want to say more about the rules, what you should expect, and how to get help if you are facing unfair debt collection practices. Debt Collectors Can Make Contact through Social Media and Other Sources Have you noticed a new follower on Instagram, or a new friend request on Faceb...

In many different areas of the law, there is a rule known as the “180-day rule.” There is a 180-day rule in immigration law, as well as in criminal law in a number of jurisdictions. There is also a 180-day rule when it comes to U.S. bankruptcy law , and that is the rule we want to discuss with you today. In bankruptcy law, the 180-day rule applies to consumer bankruptcy cases when a debtor is expecting to receive an inheritance, a cash gift, or another payout during the bankruptcy process. The 180-day rule clarifies when that money will need to go into the bankruptcy estate and when the debtor will be able to keep the money. If you have questions about the 180-day rule, or if you are planning to file for bankruptcy but also know you will soon be receiving an inheritance or another type of cash gift, you should seek advice from an Oak Park bankruptcy attorney about how that money will affect your case. Understanding the 180-Day Rule In U.S. bankruptcy law, the 180-day rule says tha...

A recent Illinois debt collection case concerning a debtor’s privacy resulted in a ruling for the debt collector. That case, Brewer v. The Law Offices of Mitchell D. Blum & Associates (2021), centered around a debt collector revealing a portion of a debtor’s account number in a mailing. The debtor argued that the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by revealing private information about the debtor. A judge for the United States District Court in the Northern District of Illinois disagreed. Our Oak Park consumer protection lawyers want to tell you more about the case. Facts of Brewer In the recent case, the plaintiff, Tyrone Brewer, filed a claim against debt collectors who “sent him a debt collection letter with part of his account number showing through the envelope’s glassine address window.” According to Brewer, revealing the portion of his account number in the mailing violated the FDCPA. The plaintiff cited a specific portion of the FDC...

If you recently received an inheritance, or if you know you may be receiving an inheritance soon, you should know that it may impact your Chapter 13 bankruptcy case . Yet the way an inheritance will affect a Chapter 13 bankruptcy case is much different than how it will affect a Chapter 7 bankruptcy case. In Chapter 7 cases, courts need to know about all assets to properly classify them as exempt or non-exempt, and non-exempt assets will be liquidated in order to repay creditors and to discharge debts. In Chapter 13 cases, assets also must be properly classified as exempt or non-exempt, but assets are not liquidated. Instead, whether or not assets are exempt will affect the debtor’s Chapter 13 debt reorganization and the repayment plan. Given the ways in which exempt and non-exempt assets are relevant to a Chapter 13 bankruptcy case, you may not be surprised to learn that an inheritance will not be distributed immediately to creditors the way it would in a Chapter 7 case. Instead, an i...

The U.S. Supreme Court recently declined to hear a case concerning underwater mortgages and liens on those properties in consumer bankruptcy cases. In declining to hear the case, The Court has left previous case law intact that says a debtor cannot strip down, or remove, a lien against an underwater mortgage through consumer bankruptcy. Our experienced Oak Park bankruptcy lawyers want to give you more information about the recent case and Supreme Court history on the issue. Details of the Supreme Court’s Rulings on “Stripping Down” In 1992, the U.S. Supreme Court heard the case Dewsnup v. Timm , in which it ruled that Section 506(d) of the U.S. Bankruptcy Code does not allow a debtor to “strip down” a lien to the “judicially determined value of the collateral.” That case involved an underwater mortgage, and the Court’s ruling made clear that a debtor cannot reduce the amount owed on a partially undersecured mortgage lien against the debtor’s home. In refusing to reduce the lien on...

If you owe a significant amount of debt and a portion of that debt includes federal student loans, you may be able to more easily have that debt discharged by filing for personal bankruptcy . According to a recent article in The Washington Post , a student financial aid point person for the U.S. Department of Education informed Congress “that the agency is working with the Justice Department to revise its bankruptcy policy for federal student loans.” This could mean that debtors who are struggling largely with student loan debt may soon be able to avoid the complicated process of seeking to have that debt discharged in bankruptcy even if there is not an overhaul of U.S. bankruptcy law. Changing the Approach to Student Loan Debt According to Richard Cordray, the current chief operating officer of the Office of Federal Student Aid, the current process for seeking a discharge of student loan debt in bankruptcy “doesn’t work well” and “needs to be reformed.” Speaking before a House educa...

In both Chapter 7 bankruptcy and Chapter 13 bankruptcy cases, the debtor will be required to disclose information about all assets and income to determine eligibility for bankruptcy as well as to determine the course of the bankruptcy case. While assets are treated differently in Chapter 7 and Chapter 13 bankruptcy cases, receiving an inheritance can significantly affect both types of bankruptcy cases. Today, our Oak Park bankruptcy attorneys can explain in more detail how inheritances are handled in Chapter 7 bankruptcy cases. Chapter 7 Bankruptcy and Inheritances First, we want to discuss how inheritances will be treated in Chapter 7 bankruptcy cases. It will be extremely important to know when you become entitled to the inheritance, and whether that occurs before, during, or after your bankruptcy filing. If you find out that you will be entitled to receive the inheritance before you actually file for Chapter 7 bankruptcy, you will need to determine whether the inheritance can be...

If you are planning to file for Chapter 7 bankruptcy , you want to be certain that all—or at least the majority of—the major debts you owe will be discharged in your bankruptcy case. Accordingly, you might be wondering: will Chapter 7 bankruptcy erase all of the debt I owe? To confirm an answer to this question, it is critical to discuss the particular facts of your case with an Oak Park consumer bankruptcy lawyer who can help. Bankruptcy laws in the U.S. are extremely complicated, and there are some types of debt that are not dischargeable. As such, it is important to have an experienced attorney assess your situation before you move forward with your bankruptcy case. The good news is that most consumer debts are dischargeable in a Chapter 7 bankruptcy case, which means that you may indeed be able to erase all of the debt you owe. Yet some types of debt are not dischargeable, and there are some situations in which debt ultimately cannot be discharged even if the type of debt is dis...

During the early stages of the COVID-19 pandemic, commentators and experts in the bankruptcy law field considered the possibility of a surge in consumer bankruptcy cases due to unemployment and mounting debt. Yet with extended unemployment benefits, stimulus checks, student loan forbearances, an eviction moratorium, and mortgage forbearances, many consumers have not faced the kind of financial fallout from the pandemic that was initially expected to occur relatively quickly. However, according to a recent NPR report , a mass move toward bankruptcy filings may be more likely in 2022. It is important for consumers to know about their options, including bankruptcy, and to understand whether personal bankruptcy could be an option for you and whether Chapter 7 or Chapter 13 bankruptcy is the better fit for your needs and circumstances. New Year Could See a “Flood” of Consumer Bankruptcy Filings The COVID-19 pandemic is not over, yet many people remain out of work. Moreover, in some cas...

Many Americans are dealing with overwhelming debt and experience significant anxiety, depression, and grief over their financial situations. While consumer bankruptcy can be an option for many consumers who are struggling to make ends meet while repaying debt, there are far too many people who worry about the stigma of personal bankruptcy . Indeed, concerns about bankruptcy stigma can sometimes prevent people from filing for Chapter 7 or Chapter 13 bankruptcy, which can result in further financial devastation. A recent article in Business Insider discusses the ways in which the stigma surrounding consumer bankruptcy can have a harmful effect on debtors, and emphasizes that we need to destigmatize the bankruptcy process. Our Oak Park bankruptcy lawyers want to discuss some of the reasons that bankruptcy should not have any stigma attached, and that struggling debtors should feel comfortable discussing the benefits of the bankruptcy process with a lawyer. Length of Time Bankruptcy W...

When you are having significant difficulty paying your debts but you are continuing to work and need a long-term solution to getting your finances back on track, Chapter 13 bankruptcy could be a beneficial tool for you. There are different types of personal or consumer bankruptcy, and they have different eligibility requirements. Different kinds of personal bankruptcy also have specific ways of helping consumers with their debt, and some of the solutions are more immediate while others occur over a period of time. To determine the best type of bankruptcy for you, it is important to seek advice from an Oak Park bankruptcy lawyer who can evaluate the particular facts of your situations. In the meantime, however, the following are some questions you can ask yourself to get a head start on determining whether you may be a good candidate for Chapter 13 bankruptcy. Are You Seeking to Have All Eligible Debts Discharged and to Get a Fresh Start? If you are considering filing for bankruptcy...

There are so many different misconceptions about bankruptcy on the internet, and these myths also circulate among friends, family members, co-workers, and other acquaintances. One of the most common misconceptions about bankruptcy we hear is that filing for bankruptcy means you will lose all of your assets and will be left with nothing in order to have your debts discharged. This is simply untrue, and it is critical to understand how different types of bankruptcy affect liquidation, and how bankruptcy exemptions can always allow debtors to protect certain types of property. Our bankruptcy attorneys in Oak Park are here to tell you more. Liquidation Bankruptcy Does Not Mean You Will Lose All of Your Property First, we want to clarify that, even in a liquidation bankruptcy, you will not lose all of your property. Under U.S. bankruptcy law , Chapter 7 bankruptcy is a type of liquidation bankruptcy, and it does result in non-exempt property being liquidated in order for the debtor to ...

After you have retired, you are most likely living on a fixed income and are relying on Social Security for income, as well as income from a retirement account or pension that you built up during your working life. For many older adults in retirement, the possibility of having to consider bankruptcy due to debt can be devastating, and most seniors want to do everything they can to end up in a situation where they cannot afford to live while paying off substantial and crushing debt. For many elderly Americans, overwhelming debt after retirement results from unexpected medical bills or long-term care, or in some cases, the decision to file for a “gray divorce.” No matter what the underlying reason for your debt, should you be considering consumer bankruptcy if you have already retired? And is bankruptcy even an option for you? The following are some key pieces of information to keep in mind. You Might Not Have Any Non-Exempt Assets First, and most importantly, you should seek advice ...

If you are considering the possibility of filing for personal bankruptcy under Chapter 7 or Chapter 13, you might have encountered information about a recently proposed law that would change the consumer bankruptcy process. In December, Elizabeth Warren and Jerrold Nadler introduced the Consumer Bankruptcy Reform Act of 2020 (CBRA), which aims to streamline the consumer bankruptcy process and to make it easier for certain types of debts to be discharged. You may be wondering if this proposed legislation can affect your existing bankruptcy case. In other words, if you file for consumer bankruptcy at some point in the coming weeks or months, and if this law passes, can it change your case or affect your discharge? Or, if you have filed for Chapter 13 bankruptcy and are making payments on a repayment plan that will last from three to five years, can the Consumer Bankruptcy Reform Act change the nature of your repayment plan or your ultimate discharge? In short, if the law does pass, it ...

Are there situations in which you can be required to repay debts you owe even after you receive a bankruptcy discharge ? Can a creditor continue trying to collect on debts you owe after your bankruptcy case has been completed or, worse, force you to reaffirm your debts? There are relatively few types of debts that a debtor will still owe following a bankruptcy discharge, and some of those debts may be reaffirmed debts based on the particular situation of the party filing for bankruptcy. However, U.S. bankruptcy law does not permit debtors to continue taking legal actions in attempts to collect on debts that have been discharged in a bankruptcy case. Our Oak Park bankruptcy lawyers can tell you more about reaffirmed debt and how debt responsibilities can persist after a bankruptcy discharge. Reaffirming Debt is a Process That Will Occur Prior to a Bankruptcy Discharge One of the first things to know is that, if any debt is going to be reaffirmed such that a debtor still owes it fol...

While many consumers who file for Chapter 7 bankruptcy or Chapter 13 bankruptcy in Oak Park are first-time bankruptcy filers, some consumers who are filing for bankruptcy are doing so after a previous bankruptcy case. If you have filed for bankruptcy in the past, how soon can you file for bankruptcy again? Does the waiting period change if you do not receive a bankruptcy discharge the first time around? Our experienced Oak Park bankruptcy attorneys are here to provide you with information about filing for bankruptcy more than once. Waiting Periods Apply to Previous Bankruptcy Discharges The first thing to know is that waiting periods between bankruptcy cases under the U.S. Bankruptcy Code apply to bankruptcy discharges as opposed to bankruptcy filings. In other words, if you previously filed for bankruptcy but did not receive a discharge, you are not bound by a waiting period under bankruptcy law. However, if you did receive a previous bankruptcy discharge, then you need to learn...

For nearly 18 months, consumers across the country (and across the globe) have been struggling with the physical and economic ramifications of the COVID-19 pandemic. Early on in the pandemic, many commentators expected to see personal bankruptcy rates rising, with increased Chapter 7 bankruptcy and Chapter 13 bankruptcy filings. Yet those predictions largely have not come to fruition, at least not yet. A recent article from the American Bar Association discusses what bankruptcy shifts have occurred in the age of COVID-19, and what could change in the near future. Our Oak Park bankruptcy attorneys want to go over some of those issues with you to give you a sense of where we are when it comes to consumer bankruptcy filings, and where we could be going. Chapter 7 and Chapter 13 Bankruptcy Cases Have Not Surged One key thing to know about bankruptcy in the era of COVID-19 is expectations that we would see a sharp rise in consumer bankruptcy filings has not occurred. Indeed, as the articl...

Did you know that if you have any debt that has been forgiven or canceled, you may owe income taxes on that amount of money? In other words, you may need to pay taxes on that amount of money as if it were part of your income. However, not all forgiven or canceled debt is taxable. As such, it is critical to understand when you may owe taxes on canceled debt and when you do not need to worry about it. Our Oak Park bankruptcy attorneys will provide you with some more information and examples to help clarify situations in which eliminated debt can be taxed. When a Creditor Forgives Your Debt Outside Bankruptcy Generally speaking, if a creditor forgives or cancels any of your debt outside of bankruptcy, the amount of money that is forgiven is treated as taxable income. To be clear, if you owe money and your debt is forgiven or a portion of it is discharged outside bankruptcy, whatever amount that you do not have to pay is considered canceled debt and is typically taxable as income. As the ...

When people think about consumer bankruptcy , they often think about liquidation bankruptcy, or a type of bankruptcy in which non-exempt assets are liquidated and remaining eligible debts are discharged. Yet there are many misconceptions about liquidation bankruptcy out there, and it is important to understand key aspects of liquidation bankruptcy if you are thinking about your options. The following are five things to know about liquidation bankruptcy. If you have follow up questions or need assistance with your case, an Oak Park bankruptcy attorney at our firm can help. 1. Consumer Liquidation Bankruptcies are Chapter 7 Bankruptcies Anytime a consumer is talking about the possibility of filing for liquidation bankruptcy, they are likely referring to Chapter 7 bankruptcy. Chapter 7 bankruptcy is the most common type of liquidation bankruptcy for both consumers and businesses, and it is the type of bankruptcy you should anticipate if you are thinking about a liquidation bankruptcy. ...

Are you thinking about filing for Chapter 7 or Chapter 13 bankruptcy , and are you wondering about types of debt you have and whether they are dischargeable? While there are some types of debt that are not dischargeable in consumer bankruptcy cases, there are many forms of commonly held debt that can be discharged in your bankruptcy case. If you have questions, you should always seek advice from a bankruptcy lawyer who can help you. In the meantime, the following are examples of some of the most common types of debt that are dischargeable in personal bankruptcy cases under the U.S. Bankruptcy Code . Credit Card Debt Did you know that more than 191 million Americans currently have credit cards and that millions of households are currently carrying tens of thousands of dollars in credit card debt? According to Debt.org, credit card debt is one of the most common forms of consumer debt, and it is nearly always dischargeable in a bankruptcy case. While there are some exceptions when a ...