Oak Park Real Estate & Estate Planning Blog

A recent U.S. Supreme Court case considered whether a federally recognized Indian tribe is subject to the U.S. Bankruptcy Code’s provisions and, more specifically, the automatic stay that applies when a debtor files for bankruptcy protection. While there are no longer any federally recognized Indian tribes centered within the state of Illinois, the State of Illinois emphasizes that “the lands we now call Illinois are the ancestral homelands of many Tribal Nations,” and “Native peoples from over 100 Tribal Nations continue to call these lands home.” Accordingly, federally recognized Indian tribes may have businesses in Illinois or may be doing business with consumers in various capacities. The recently decided case, Lac du Flambeau Band of Lake Superior Chippewa Indians et al. v. Coughlin (2023), required the Court to consider whether a federally recognized Indian tribe is subject to the automatic stay and to the provisions of the Bankruptcy Code more broadly. The Court held, “The Bank...

When you are thinking about consumer bankruptcy , you may know that the automatic stay is one of the most powerful tools in a personal bankruptcy case. The automatic stay is an injunction that applies as soon as you file for bankruptcy, and it stops debt collectors and creditors from continuing to take any actions against you designed to collect on the debts you owe. This means a creditor cannot call you to try to collect the debt once the automatic stay applies, and a creditor cannot file a lawsuit against you, garnish your wages, or initiate or move forward on home foreclosure. In short, the automatic stay stops creditors and debt collectors from collecting the debt you owe. Yet you might be wondering: how long will the automatic stay remain in effect? And can the automatic stay permanently stop debt collectors from taking action against you? Our Oak Park bankruptcy attorneys have information to help you. Automatic Stay Will Remain in Effect Until Your Bankruptcy Case is Closed How l...

If you are thinking about filing for Chapter 7 bankruptcy , you likely know that this is a type of liquidation bankruptcy. What this means is that all non-exempt assets will be liquidated, and the money obtained from the liquidation of those assets will be used to repay creditors in order of their priority. Chapter 13 bankruptcy does not involve the liquidation of a debtor’s assets. When you are planning to file for Chapter 7 bankruptcy, you may be wondering: what property will I be able to keep if I file for liquidation bankruptcy? The good news is that Illinois law contains a variety of bankruptcy exemptions that can allow debtors to retain a wide range of assets even during and after a Chapter 7 bankruptcy case. Consider the following information from our Oak Park bankruptcy attorneys. You Will Need to Use Illinois’s Bankruptcy Exemptions The first thing to know when you are learning about which assets of yours will qualify for exemptions in your Oak Park bankruptcy case is that deb...

When you are considering consumer bankruptcy , our experienced Oak Park bankruptcy attorneys know that you probably have a wide variety of questions about the bankruptcy process. Indeed, we often work with clients in the early stages of bankruptcy planning who want to know more about bankruptcy exemptions, types of assets they will be able to retain if they file for bankruptcy, and how different types of personal bankruptcy affect both debts and assets. One question we frequently receive from debtors concerns the bankruptcy process in relation to staying in your home or your condo. So, if you file for bankruptcy, can you keep your house? The answer to that question will depend upon several different factors, and we want to provide you with some of the key information you will need to answer that question for yourself. Ultimately, you should seek advice from a bankruptcy attorney who can assess the particular facts of your case to determine whether or not you are likely to be able to...

How broad are the protections associated with the automatic stay under the U.S. Bankruptcy Code, and can they require a creditor to turn over property that was repossessed shortly before a consumer’s bankruptcy filing? The recent U.S. Supreme Court decision in City of Chicago v. Fulton (2021) makes clear that a creditor who repossesses an automobile before the debtor files for bankruptcy is not required under U.S. bankruptcy law to turn over an impounded automobile once the debtor has filed for bankruptcy and the automatic stay attaches. Yet as a recent article in Auto Finance News suggests, the Court’s decision leaves some questions unanswered, particularly with regard to repossessions. Understanding the Court’s Decision in Fulton In City of Chicago v. Fulton, debtors had their vehicles impounded by the City of Chicago for “failure to pay fines for motor vehicle infractions.” The debtors subsequently filed for consumer bankruptcy and argued that the automatic stay required the C...

Many consumers file for personal bankruptcy because they have a substantial amount of both secured and unsecured debt. When it comes to unsecured debt, there is no need to be concerned about the possibility of a repossession unless you have pledged your personal property as collateral in order to get the loan. With secured debt, however, the creditor may attempt to repossess the property for which you have the secured debt—such as a car or rent-to-own furniture. Yet understanding how repossession works with regard to bankruptcy can be complicated. Our experienced Oak Park bankruptcy attorneys want to provide you with more information about consumer bankruptcy and repossession. What is Repossession? When you have secured debt, which means there is an asset to secure the loan, the creditor often can repossess the property that secures the loan. Secured loans include auto loans, as well as loans for any tangible item that is in your possession that you are paying off over time (such a...

When you file for consumer bankruptcy , you should not have to be worried about creditors continuing to engage in collection activities against you because of the automatic stay. Yet creditors and debt collectors do not always abide by the law. What happens, then, in a case where the creditor violates the automatic stay after you have filed for personal bankruptcy ? Understanding How the Automatic Stay Works After you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, something known as the “automatic stay” immediately applies to your case and prevents creditors or debt collectors from taking any additional actions against you in order to collect on debts owed. According to the Cornell Legal Information Institute (LII), the automatic stay is “an automatic injunction that prohibits most creditor collection activities after the debtor has filed for bankruptcy,” and it “begins at the moment the bankruptcy petition is filed.” For example, the automatic stay prevents creditors from...

Struggling with debt can produce significant anxiety, and it can be difficult to know whether you are making the right choices when it comes to your finances, the economic needs of yourself and your family, and your credit score. Missing payments on credit card debt or medical bills can result in penalties and fees being added onto the total amount you owe, not to mention interest. If you do owe a substantial amount of consumer debt, you may be wondering whether personal bankruptcy is the right choice for you. There are many benefits to both Chapter 7 bankruptcy and Chapter 13 bankruptcy , which are the two most common forms of consumer bankruptcy in the U.S. The following are some of the benefits that come with filing for bankruptcy protection. Automatic Stay Will Prevent Additional Actions from Creditors or Debt Collectors Whether you file for Chapter 7 or Chapter 13 bankruptcy , one of the immediate benefits is that the automatic stay will prevent creditors or debt collectors ...

If you recently lost your job due to the COVID-19 pandemic or have been thinking about filing for bankruptcy given the seeming insurmountability of your consumer debt, it may be better to file for personal bankruptcy sooner rather than later. Indeed, according to a recent article in MarketWatch , you should think “defensively” about your debt, and you should consider filing for bankruptcy on the sooner side. In short, by filing for bankruptcy sooner, you may be able to avoid dipping into assets that are exempt, and you could end up in a better financial place once the pandemic eases. We want to refer to the article and to tell you more about why it could make sense to file for bankruptcy on the earlier side rather than waiting before talking to a bankruptcy lawyer. Letting Cash Accrue Could Lead to a Seizure by Creditors If you have begun making only the minimum payment on your credit cards in order to make sure that you have at least some cash on hand to pay for essentials during...

The U.S. Supreme Court recently granted certiorari to a bankruptcy case out of Chicago concerning the automatic stay. In other words, the U.S. Supreme Court agreed to hear the case, City of Chicago v. Fulton . The U.S. Court of Appeals for the Seventh Circuit most recently heard and ruled on the case, which involves a question about the automatic stay in a Chapter 13 bankruptcy case. We want to tell you more about the case and to discuss its possible implications for consumers in Oak Park moving forward. Getting the Facts About City of Chicago v. Fulton The present case, involves a situation in which a debtor’s car was towed and impounded, and the vehicle was not returned to the debtor once she filed for Chapter 13 bankruptcy, which is required under the automatic stay. Here are the basic facts of the case. Robbin Fulton, the debtor, had a citation for driving on a suspended license. The City of Chicago towed and impounded Fulton’s car in connection with that citation. Then Fulton...

The question of whether a debtor can seek and obtain emotional distress damages in a consumer bankruptcy case might seem like an odd one given that most debtors are concerned primarily with getting debt under control and achieving a discharge. However, it is important to keep in mind that there are legal protections in place to protect debtors when creditors do not abide by federal bankruptcy law. Following other court, the Seventh Circuit Court of Appeals (which includes Illinois) has ruled that, in some cases, a debtor may be eligible to receive emotional distress damages when a creditor willfully violates the terms of the automatic stay in a personal bankruptcy case. Why Would Emotional Distress Damages Come Into Play in a Bankruptcy Case? Under Section 362 of the U.S. Bankruptcy Code , the automatic stay applies as soon as a debtor files for bankruptcy. The automatic stay prevents creditors from continuing with any attempts to collect on the debts owed by the debtor, from maki...

If an Oak Park resident files for consumer bankruptcy , as soon as the debtor files a bankruptcy petition, an automatic stay prevents creditors from continuing to attempt to collect on any debts that the debtor may owe. What happens to a creditor who continues to try to collect on debt even after learning that the debtor has filed for Chapter 7 or Chapter 13 bankruptcy ? Similarly, what happens to a creditor that continues to make efforts to collect on a debt once a bankruptcy case has been closed and the debtor’s debts are discharged? Do the answers to those questions change if the creditor did not realize that the debtor filed for bankruptcy or that the debt(s) had been discharged in a bankruptcy? These are the issues that the U.S. Supreme Court will be considering when it hears a case out of the Ninth Circuit Court of Appeals, Taggart v. Lorenzen . While the Ninth Circuit ruling can not yet impact debtors and creditors in Illinois, the U.S. Supreme Court’s decision in the case wi...

One of the ways in which consumer bankruptcy protects debtors is through the automatic stay. According to the Cornell Legal Information Institute (LII), the automatic stay is “one of the fundamental debtor protections provided by the bankruptcy laws,” since it “gives the debtor a breathing spell from his creditors.” More specifically, the automatic stay “stops all collection efforts, all harassment, and all foreclosure actions.” The automatic stay is supposed to prevent any creditors from continuing any sort of attempts to collect or recover money, property, or other claims against the debtor as soon as the debtor files for personal bankruptcy, whether it is Chapter 7 bankruptcy of Chapter 13 bankruptcy. However, a recent bankruptcy case in the Northern District of Illinois determined that the automatic stay did not apply to a particular situation in which the parties had previously signed an arbitration agreement. We will say more about how the automatic stay functions,...

For any Oak Park debtors who have recently filed for personal bankruptcy or are considering consumer bankruptcy , it is important to know about punitive damages and the U.S. Bankruptcy Code’s automatic stay . In short, the U.S. Bankruptcy Code says that, in some cases, debtors can receive punitive damages when a creditor intentionally violates the automatic stay. To understand why this is significant, we will tell you more about punitive damages and the automatic stay, and then we will discuss situations in which punitive damages may be awarded for a violation of the automatic stay. What are Punitive Damages? Generally speaking, courts recognize two different types of damages awards - compensatory damages and punitive damages. Compensatory damages are those that are supposed to compensate a person for his or her losses, and they are typically characterized as general and special damages. The other type of damages award is known as a punitive damages award. Debtors may...

When you file for personal bankruptcy , once of the most significant protections that applies almost immediately is the automatic stay. Under 11 U.S.C. § 362 , a petition for bankruptcy protection, including filings under both Chapter 7 and Chapter 13, result in an automatic stay. What is an automatic stay? In short, it prevents creditors from continuing to collect from you while you are awaiting a bankruptcy discharge or reorganization (depending upon which type of bankruptcy protection you are seeking). It is important to understand how an automatic stay can protect you—and how, on the flip side, it cannot—and to learn more about ways for extending the automatic stay. Learning More About the Automatic Stay When you file for bankruptcy, the automatic stay protects you, as we noted, from constant contact with creditors that are attempting to recoup what you owe. What precisely does the automatic stay do? According to 11 U.S.C. § 362 , the automatic stay prohibits credit...