Oak Park Real Estate & Estate Planning Blog

When a debtor files for consumer bankruptcy , can that debtor be responsible for a debt that has resulted from another party’s fraud even if the debtor did not know about the fraud? That is the question at the heart of a current case that is pending before the U.S. Supreme Court. The case is Bartenwerfer v. Buckley , and the case was argued on December 6, 2022. What do you need to know about the case and its potential implications for bankruptcy filings in Illinois? Our Oak Park bankruptcy attorneys can explain. Understanding the Facts of Bartenwerfer v. Buckley In Bartenwerfer, the married couple David and Kate Bartenwerfer purchased a house in San Francisco. They moved out of the house, and David started renovating it with Kate’s consent. However, Kate was not involved in the renovation process. After the renovation, they sold the house to the defendant, Kieran Buckley. Buckley identified defects and filed a claim against the Bartenwerfers, alleging fraud. Buckley was awarded damages...

When you file for personal bankruptcy , whether you are filing for Chapter 7 or Chapter 13 bankruptcy (or in some cases Chapter 11 bankruptcy), it is important to understand that there are specific rules you must follow. Indeed, filing for consumer bankruptcy is a complicated process, and it is essential to provide all required documentation and to fill out schedules appropriately. Since consumer bankruptcy is so complex, it is always a good idea to work with an experienced bankruptcy lawyer to ensure that you follow all steps correctly. Yet it is also important to know that making an error on your materials is distinct from bankruptcy fraud. While a mistake in your filing can still prevent you from being eligible for a discharge, bankruptcy fraud typically results in much more serious consequences. We want to be clear about the differences between errors in your bankruptcy materials and bankruptcy fraud. What is Bankruptcy Fraud? Bankruptcy fraud can take many forms, and it typical...

When a debtor in Oak Park files for personal bankruptcy , she or he will need to provide clear documentation of financials, including assets, income, and other information. In addition, the debtor will be required to provide information about any recent property transfers made, including gifts and sales of property. The debtor must disclose any transfers that have been made in the last two years prior to filing for bankruptcy . All of this information is contained in a specific bankruptcy form known as Your Statement of Financial Affairs for Individuals Filing for Bankruptcy . If a bankruptcy trustee suspects that a fraudulent transfer has been made, the trustee can attempt to recover that fraudulent transfer. The topic of fraudulent transfers—also known as fraudulent conveyances—can be confusing. We want to provide you with more information about the types of fraudulent transfers and the ways in which they can occur. Two Different Types of Fraudulent Transfers Under the U.S. ...

The holiday season can be one of the most expensive times of year for many consumers, from throwing costly holiday parties to spending money on gifts for friends and extended family members. If you are already struggling with debt and considering consumer bankruptcy , it is extremely important to avoid taking on additional holiday debt this year. We want to discuss some tips from an article in Forbes for avoiding holiday debt, and then discuss the ways in which a consumer could face allegations of bankruptcy fraud if she were to charge significant amounts of money during the holiday season only to file for bankruptcy soon into the new year. How can You Avoid Holiday Debt This Year? Avoiding holiday debt is never easy. As the article highlights, “57% of American adults with children say they’re willing to take on debt to make their children happy,” and middle-income families are particularly susceptible to taking on unnecessary debt during the holiday season. To be s...

The Background on the Case Earlier this year we discussed the consumer bankruptcy case of Lamar, Archer & Cofrin, LLP v. Appling . In the case, the debtor told the creditor that he planned to repay the debt with a tax refund of $100,000. The debtor actually applied for a tax refund of only $60,000, and did not repay the debt. When all was said and done, he owed the creditor $104,000. The debtor filed for Chapter 7 bankruptcy , and sought to have the $104,000 debt discharged. The creditor argued that the debt was not dischargeable because it fell into the category of a “fraud exception” under the U.S. Bankruptcy Code. Under the U.S. Bankruptcy Code, a debtor cannot discharge a debt that has been “obtained by false pretenses, a false representation, or actual fraud.” However, there is an exception to this fraud exception. The Bankruptcy Code clarifies that, when a debtor makes a statement that looks like fraud, the debt can still be discharged if the statement was ...

U.S. Supreme Court Hears Bankruptcy Case Concerning Fraud Exception The U.S. Supreme Court recently heard arguments in bankruptcy-related case that has been ongoing for quite some time. Back in January 2018, the U.S. Supreme Court agreed to hear the case, Lamar, Archer & Cofrin, LLP v. Appling . In brief, the case deals with an individual debtor who made false promises about repaying a portion of his debt. The debtor ultimately filed for Chapter 7 bankruptcy and attempted to discharge the debt. The creditor argued that the debt fell under the U.S. Bankruptcy Code’s fraud exception, and as such the debt was a nondischargeable debt in the Chapter 7 bankruptcy proceeding. The debtor disagreed, and the issue is now up to the U.S. Supreme Court. The U.S. Supreme Court’s decision could impact certain debtors in Oak Park who file for consumer bankruptcy . We will tell you more about the recent case and its possible implications. Getting the Facts of the Case: Lamar, ...

Bankruptcy law is extremely complicated, and it is important to work with an Oak Park bankruptcy lawyer no matter how straightforward you think your case may be. Indeed, failing to work with an experienced advocate could result in significant difficulties in your case. In particular, omitting certain information can look like bankruptcy fraud. If you are considering Chapter 7 bankruptcy or Chapter 13 bankruptcy, it is important to learn more about bankruptcy fraud and how the failure to provide details about assets may result in bankruptcy fraud allegations.   Understanding Bankruptcy Fraud The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was designed, in part, to reduce the rate of bankruptcy fraud in consumer bankruptcy cases. One of the ways in which the law is supposed to prevent bankruptcy fraud is through the use of the “means test” to determine whether an individual is eligible to file for Chapter 7 bankruptcy. What does bankruptcy fraud act...