Oak Park Real Estate & Estate Planning Blog

What are exemptions in bankruptcy cases? If you are considering bankruptcy, you should first learn about how exemptions work. Under the Bankruptcy Code, exemptions allow debtors to be “exempt from property of the estate,” which means that debtors can exempt the value of certain assets from the bankruptcy estate. Exemptions work differently in Chapter 7 and Chapter 13 cases for individuals. In Chapter 7 cases, exemptions allow debtors to exempt assets from the estate for liquidation (in other words, you can keep the exempt property). According to the American Bankruptcy Institute (ABI), a majority of Americans who file for bankruptcy are able to exempt all or nearly all of their property in a Chapter 7 bankruptcy case. In a Chapter 13 case, given that assets are not liquidated, exemptions play a role in determining the monthly and total amount of debt that must be repaid over the course of the bankruptcy case. Some bankruptcy exemptions are used more frequently than others, so it is i...

When an individual debtor files for Chapter 7 or Chapter 13 bankruptcy in the Oak Park area, they will need to complete a number of “schedules” in addition to the initial bankruptcy filing. Schedules are not timelines or outlines, or plans or procedures, as you might expect from the name. Rather, bankruptcy schedules are documents that provide the bankruptcy court with detailed information about your personal assets, debts, and other related information. The debtor must complete certain schedules (usually with assistance from a bankruptcy lawyer). The specific information required for each bankruptcy schedule is particular, and there are important requirements to consider. In many cases, failing to provide information in a bankruptcy schedule can complicate your case, so it is critical to ensure that you have the schedules filled out correctly. Schedules A through C are documents in which a debtor provides information about their personal property (including real property, tangible pro...

Struggling with debt can be stressful and anxiety-inducing, and in some cases the stress can even result in physical consequences. If you are in a difficult financial situation, you may be considering the possibility of filing for consumer bankruptcy . Generally speaking, under the U.S. Bankruptcy Code , consumers can be eligible to file for a liquidation bankruptcy (Chapter 7 bankruptcy) or a reorganization bankruptcy (usually Chapter 13 bankruptcy, but sometimes Chapter 11 in certain circumstances). Eligibility for different types of bankruptcy is something that you should discuss with an experienced bankruptcy attorney, given your particular financial circumstances. However, you should know that both kinds of bankruptcy cases allow for the discharge of various types of debts. A discharge means that you will no longer be liable for the debt, and creditors or debt collectors cannot take action, or even attempt to take action, to collect on debts that have been discharged. To be sure, ...

When you are considering personal bankruptcy, you are likely looking at the possibility of either Chapter 7 bankruptcy or Chapter 13 bankruptcy . While individuals do occasionally file for Chapter 11 bankruptcy, this only happens when they are ineligible for Chapter 13 bankruptcy as a result of having too much debt, and it is a relatively uncommon situation. As you are looking into the possibilities for Chapter 7 or Chapter 13 bankruptcy, you may be asking yourself: How am I supposed to decide between Chapter 7 and Chapter 13 bankruptcy? Ultimately, it is unlikely that you will be eligible for both Chapter 7 and Chapter 13 bankruptcy at the same time since they have quite different eligibility requirements. Instead, you should be looking at the process for each type of bankruptcy and asking yourself the question: am I most likely to be eligible for Chapter 7 bankruptcy or Chapter 13 bankruptcy? And if you are seeking the particular benefits of one of these types of bankruptcy, you shou...

If you are considering personal bankruptcy in Illinois , you might already know that there are two general kinds of bankruptcy for consumers: liquidation bankruptcy and reorganization bankruptcy. In a liquidation bankruptcy, all non-exempt assets belonging to a debtor will be liquidated as part of the bankruptcy process. Which assets are commonly exempt from liquidation? Our Oak Park bankruptcy attorneys can provide you with more information. Liquidation Bankruptcy Versus Reorganization Bankruptcy Before we explain what assets are exempt in liquidation bankruptcies, it is important to understand what a liquidation bankruptcy is and how it compares to other types of consumer bankruptcy. With a liquidation bankruptcy — the type of bankruptcy that many people think about when they imagine a bankruptcy case — the debtor’s non-exempt assets are liquidated so that creditors can be paid and the debtor’s eligible debts can be discharged. Consumers who file for liquidation bankruptcy file for C...

If you are thinking about filing for personal bankruptcy , you may already know that one of the major benefits of bankruptcy filing is the automatic stay. The automatic stay is an injunction that prevents creditors and debt collectors from taking any actions to collect on the debts you owe as soon as you file your petition. Accordingly, the automatic stay prevents creditors and debt collectors from initiating lawsuits against debtors, moving forward with lawsuits, initiating or moving forward with foreclosure proceedings, and even making calls or sending letters in an attempt to collect on debts owed. Yet what happens when a debt collector does not yet know that a debtor has filed for bankruptcy and takes action to collect on a debt? In other words, does the debtor have a claim against the debt collector for a violation of the U.S. Bankruptcy Code or a violation of the Fair Debt Collection Practices Act (FDCPA)? The U.S. District Court for the District of Puerto Rico issued a decision ...

When consumer debt rises, rates of consumer bankruptcy filings frequently will follow — especially when Americans are taking on more debt than their income and assets will allow them to repay. According to a recent report from CNBC , consumer debt has now reached an all-time high, and delinquencies are also rising. As consumer debt and delinquencies go up, foreclosure and bankruptcy rate increases certainly could follow. Our Oak Park consumer protection lawyers want to discuss the data with you and provide you with more information about how bankruptcy can allow you to discharge common types of consumer debt. New Record High for Consumer Debt Combined with Rise in Delinquencies Consumer debt has now reached an all-time high, as CNBC reports. Indeed, by the end of 2022, “debt across all categories totaled $16.9 trillion, up about $1.3 trillion from a year ago.” Mortgage debt increased while refinancing rates declined. Mortgage delinquency rates also rose, suggesting that more foreclosu...

Consumer bankruptcy in the U.S. can be filed by an individual or by a married couple according to U.S. bankruptcy law . Yet it is important to know that, even if you or your spouse are considering personal bankruptcy, the other spouse is not required to file for bankruptcy in a joint petition. At the same time, if spouses are married, even if they are separated, one spouse’s bankruptcy could have a major impact on the other spouse’s current and future finances. What do you need to know if your spouse or your ex is considering bankruptcy? Our Oak Park bankruptcy attorneys have more information for you. If You are Already Divorced, You Do Not Need to Consider Your Ex’s Bankruptcy If your divorce has already been finalized, it does not matter if your ex-spouse is filing for bankruptcy as far as your personal financial situation goes. In other words, your ex-spouse’s decision to file for bankruptcy will not impact your current assets or debts. At the same time, if your ex-spouse does file...

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...

If you have student loan debt and you have been considering bankruptcy , you may already know that the U.S. Department of Justice (DOJ) recently issued new guidance concerning the discharge of student loan debt. Given that there has been a significant amount of discussion about amending the way that student loan debt is handled in bankruptcy cases, it is critical to understand that the new guidance does not change the overall process for discharging student loan debt in bankruptcy. To be clear, the requirement of proving an “undue hardship” still exists, but the DOJ has clarified some of the elements of the process and has made some changes to the way it will approach the issue of student loan debt. Our Oak Park bankruptcy attorneys can provide you with more information about how the new guidance could impact student loan discharges in bankruptcy (including your student loan debt if you are considering bankruptcy). Debtors Still Need to Prove an Undue Hardship The new guidance does no...

If you currently have student loan debt and you are considering the possibility of consumer bankruptcy , you should know that the U.S. Department of Justice (DOJ) recently announced a new process for discharging student loans. According to an article in The New York Times , working with the U.S. Department of Education (DOE), the DOJ “announced a new process that it said would help ensure that people in bankruptcy seeking relief on their federal student loans were treated more fairly, with clearer guidelines about what types of cases would result in a discharge.” Does this shift mean that more bankruptcy discharges will involve student loans, and more consumers with student debt will be able to wipe out that debt in Chapter 7 bankruptcy cases? It might, but it will depend on how many current student loan borrowers are actually eligible to have their student debt discharged under the existing bankruptcy system. Our Oak Park bankruptcy attorneys can say more. New Approach Will Provide Cl...

Bankruptcy exemptions are extremely important in any consumer bankruptcy proceeding. In a Chapter 7 bankruptcy case, which is a liquidation bankruptcy, it is important to know that bankruptcy exemptions allow a debtor to keep various assets so that they are not liquidated. To be clear, any assets that are exempt do not need to be sold, and the debtor can keep them while still receiving a discharge of eligible debts. In a Chapter 13 bankruptcy case or another type of reorganization bankruptcy, exemptions are used to determine the amount of debt that the individual debtor must repay over the course of the repayment plan. If you are considering filing for bankruptcy in Illinois, especially if you are planning to file for Chapter 7 bankruptcy, you may have started looking into bankruptcy exemptions to determine how they are likely to apply to your case. Yet it can be confusing to find that there are both federal bankruptcy exemptions and state bankruptcy exemptions. You may be wondering: ...

If you have been considering consumer bankruptcy in Illinois , or if you have been following discussions about potential changes to the consumer bankruptcy process, you may know that a bill was proposed in 2020 that aimed to change how consumer bankruptcy works. The bill will streamline the process and eradicate some of the current distinctions between Chapter 7 and Chapter 13 bankruptcy. According to a recent article in Bloomberg , Democrats in Congress have reintroduced a bankruptcy bill “that would radically alter how individuals file bankruptcy.” The article underscores that, in introducing the Consumer Bankruptcy Reform Act of 2022 , Senator Elizabeth Warren and Representative Jerrold Nadler are hoping to obtain support for this type of legislation after the 2020 bill “failed to gain traction.” What do you need to know about the newly proposed legislation and how it could potentially impact the consumer bankruptcy process? Key Aims of the Proposed Legislation The consumer bankrupt...

When you are considering personal bankruptcy and doing preliminary research into the process, you are likely to come across a series of terms related to the end of a bankruptcy case. These terms are all distinct from one another, but their meanings likely are not obvious to a consumer who is seeking to learn more about personal bankruptcy and how different types of bankruptcy processes work. While there is a wide range of consumer bankruptcy terms that can be complex and may require an explanation from a dedicated bankruptcy lawyer, our firm wants to focus on three terms that are commonly used to describe the end of a bankruptcy case -- closure, dismissal, and conversion. What does it mean for a bankruptcy case to be closed, and how does that process differ from a bankruptcy dismissal or conversion? Our Oak Park bankruptcy attorneys can provide you with more information. Closing a Bankruptcy Case When a bankruptcy case is closed, or when there is a reference to the closing of a bankru...

The process of filing for personal bankruptcy is extremely complicated, and the U.S. Bankruptcy Code has many complexities that can be difficult for a consumer to understand with certainty. As such, it is important to have an experienced Oak Park bankruptcy attorney on your side from the very start of your case. At the same time, it is important to learn as much as you can about the consumer bankruptcy process. The following are some of the key terms that are used in consumer bankruptcy cases that can help you to understand more about the processes for different types of personal bankruptcy. Automatic Stay The automatic stay is an injunction that takes effect as soon as a person (or entity) files for bankruptcy. The injunction prevents creditors from continuing to take any debt collect actions against you (such as moving forward with an existing lawsuit) or initiating any new debt collect actions. The automatic stay applies to Chapter 7 and Chapter 13 bankruptcy cases, and to Chapter...

Whether you owe child support and are considering filing for bankruptcy in Illinois , or you receive child support and are concerned about how your bankruptcy case will affect the child support payments you receive, it is important to learn more about child support and bankruptcy. Generally speaking, child support payments are usually exempt in bankruptcy cases for the party receiving child support, and child support debts cannot be discharged in a bankruptcy case. Yet there is more you should know, and if your bankruptcy case involves child support in any way, it is important to seek advice from a bankruptcy lawyer in Oak Park as soon as you can. The following are some of the key things you should know about child support and bankruptcy. Child Support Debt Cannot be Discharged in a Consumer Bankruptcy Case Child support, along with any other kind of family support debt, is not dischargeable in a bankruptcy case. Accordingly, whether you owe child support or you are concerned about an ...

Anyone who is struggling with debt can experience significant stress and anxiety upon receiving a phone call or written notice from a creditor or debt collector that threatens to sue if the debt is not paid. For many consumers in the Oak Park area, the possibility of facing a lawsuit over debt can be scary, and it is difficult to know what steps you should take. You might be wondering: should I file for bankruptcy if a creditor has threatened to sue me? In answering that question, it will be essential to consider the specific facts of your case and whether bankruptcy is the right option for you. In many cases, bankruptcy can be beneficial if you are facing a lawsuit from a creditor. Our Oak Park bankruptcy lawyers can explain in more detail, and we can also speak with you about your circumstances to help you determine the best path forward. Creditors Cannot Make Threats When Trying to Collect Debts While the threat of legal action can be unnerving, it is important to know that there a...

Are some student loan companies attempting to collect debt that has been discharged in consumer bankruptcy cases? According to a recent article in Business Insider , the Consumer Financial Protection Bureau (CFPB) reported that “student loan companies have been accused of violating discharge orders and unlawfully collecting debt,” which should put consumers on alert if they have received a debt discharge through bankruptcy. To be clear, discharged debt is not owed, and creditors cannot attempt to collect it. What else do you need to know? Our Oak Park bankruptcy lawyers have information to help. Learning More About Student Loan Companies Attempting to Collect Discharged Debt The recent report from the CFPB underscored that student loan debt can in fact be discharged in bankruptcy despite the frequently repeated misconception that student loan debt cannot be discharged. To be clear, while student loan debt can be more difficult to discharge than some other types of consumer debt, it c...

There are many small business owners in Oak Park and throughout the Chicago area. Yet running a small business can be extremely difficult and complicated, especially a business in a field or industry that has been struggling since the start of the pandemic. In most circumstances, small business owners who are having difficulty repaying business debts are also struggling with their debts and finances as consumers, and they may be considering bankruptcy. If a consumer owns a small business and wants to file for bankruptcy , what does that consumer need to know? Our Oak Park bankruptcy lawyers have some information and tips to help. Consumers Who File for Bankruptcy and Own Sole Proprietorships Will Also be Filing for Business Bankruptcy If you are planning to file for bankruptcy because of your consumer debt, or you are planning to file for bankruptcy largely because of your business debt, the distinction will not matter too much under U.S. bankruptcy law if your business is structured ...

Many debtors who file for consumer bankruptcy do so, at least in part, as a result of insurmountable medical debt. For those debtors, Chapter 7 bankruptcy offers a way to have most medical debt discharged and to get a fresh financial start in order to begin rebuilding credit. If medical debt were no longer reported by credit bureaus and it did not affect a consumer’s eligibility for loans and other forms of credit, would overall rates of personal bankruptcy decline? According to an article in The New York Times , the Consumer Financial Protection Bureau (CFPB) is considering the possibility of banning medical debt from consumer credit reports. What else do you need to know about this proposal and how it could affect consumer debt and bankruptcy filings? Medical Debt is Harming Consumers Even before the start of the COVID-19 pandemic, consumers struggled with many different types of consumer debt, including substantial medical bills. Even with health insurance, an unexpected medical em...