Oak Park Real Estate & Estate Planning Blog

When an individual debtor — as opposed to a business debtor — is considering the possibility of filing for bankruptcy , there are a number of terms that can be used to describe the type of bankruptcy case. For a person who is contemplating bankruptcy, understanding when terms overlap and when they are distinct can be confusing, and the use of various terms can appear to complicate the overall bankruptcy process. While the bankruptcy process and U.S. bankruptcy law are, indeed, complex, our Oak Park bankruptcy attorneys can provide you with clarification concerning consumer bankruptcy or personal bankruptcy in Illinois. Consider the following information, and do not hesitate to reach out to our firm if we can answer any questions about getting started on a consumer bankruptcy case. Personal Bankruptcy, Consumer Bankruptcy, and Individual Bankruptcy are Interchangeable Terms Consumers are often confused about the different uses of the terms “personal bankruptcy,” “consumer bankruptcy,” ...

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...

Anyone in the Oak Park area who is considering personal bankruptcy to have student loans discharged should be aware that there is new guidance that will impact bankruptcy cases involving student loans. If you previously considered bankruptcy in order to have your student loans discharged, you likely came across a range of articles providing information about the difficulty — but not impossibility — of having student loans discharged in bankruptcy. For quite some time, student loans have been famously difficult to discharge in consumer bankruptcy cases, but at the same time, few consumers filing for bankruptcy have actually gone through the process that was required to see if their student loans could be discharged. That process was notoriously complex, costly, and time-consuming, requiring debtors to prove an “undue hardship” requirement. That undue hardship requirement largely required proving elements of what has become known as the Brunner test to show that continuing to pay stude...

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...

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...

What have general consumer bankruptcy trends looked like over the past decade and a half since the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005? How have bankruptcy filings remained stagnant or shifted over time? The United States Courts recently published an analysis of consumer bankruptcy trends from 2005-2021, which highlights key information about how the bankruptcy process has unfolded for many Americans and how trends have changed over time or sometimes remained the same. Consumer bankruptcy refers to any non-business bankruptcy cases filed — typically under Chapter 7 or Chapter 13, but sometimes under Chapter 11, depending upon the debtor’s circumstances. The analysis emphasizes that consumer bankruptcy filings actually account for about 97% of all bankruptcy filings in the U.S., so it is especially important to gain a clearer understanding of these trends. Our Oak Park bankruptcy lawyers want to discuss the analysis with you in order...

What is consumer bankruptcy , and how does it work? How does consumer bankruptcy differ from other types of bankruptcy? And is consumer bankruptcy right for you if you are struggling with debt? In order to gain a clearer understanding of the overall consumer bankruptcy process and whether you should consider filing, it is important to learn more about the different aspects of consumer bankruptcy and the U.S. Bankruptcy Code . Our experienced Oak Park bankruptcy attorneys are here to provide you with more information, and we can speak with you today about your circumstances if you are considering the possibility of filing for bankruptcy. Consumer Bankruptcy is a Term Referring to Bankruptcy for Individuals The term “consumer bankruptcy” is used to refer to bankruptcy cases that are filed by individuals as opposed to businesses. Consumer bankruptcy can go by various terms, including “personal bankruptcy” and “individual bankruptcy.” While consumer bankruptcy is sometimes known as individ...

For many people who are considering a personal bankruptcy case, there is a looming question: how can I keep my property? Indeed, many debtors thinking about bankruptcy wait too long to file because they are concerned about their assets being fully liquidated and losing most of their important property. It is important to know that there are multiple ways to keep your property when you file for bankruptcy — either through the type of bankruptcy you file for or by applying exemptions to your assets. Our Oak Park bankruptcy attorneys can explain in more detail. Determine Your Eligibility for Chapter 13 Bankruptcy The easiest way to keep your property — all of your property — in a bankruptcy case is by filing for Chapter 13 bankruptcy (or another type of reorganization bankruptcy). In a Chapter 13 bankruptcy, none of your assets are liquidated. Given that this is a type of reorganization bankruptcy, you will need to plan to make set monthly payments as part of a repayment plan to creditor...

Could a significant amount of holiday spending result in a rise in consumer bankruptcy cases in the New Year? While there are multiple factors that impact the overall rate of consumer bankruptcy in Illinois and throughout the country, significant and widespread upticks in spending could trigger an increase in overall Chapter 7 and Chapter 13 bankruptcy filings. According to a recent report from ABC News , the overall increase in spending during the 2022 holiday season could result in a rise in consumer bankruptcy filings in 2023. Our Oak Park bankruptcy lawyers want to discuss the article and help you understand your options if you are struggling with debt. Consumer Holiday Spending Increased in 2022 Data from Mastercard SpendingPulse shows that consumer sales during the holiday season rose by approximately 7.6 percent, with varying increases for different types of gifts and spending. More specifically, apparel sales purchased rose by about 4.4 percent, while restaurant spending rose ...

Medical debt has long been a major source of consumer debt and a primary reason that many individuals file for Chapter 7 or Chapter 13 bankruptcy. In the past, medical debt has often involved patients owing various debts to different facilities or owing money on a consumer credit card after charging a hospital bill or the costs of prescription medications. According to a recent report from NPR , a new kind of medical debt is taking hold across the country. In recent years, hospitals and other healthcare facilities have encouraged patients to sign up for hospital-specific credit cards or lines of credit to “consolidate health expenses.” This type of patient financing has led to even more medical debt, much of it unmanageable for consumers struggling to pay what they owe for health care. What do you need to know about hospital credit card debt, and what are your options for dealing with it? Our Oak Park consumer protection lawyers can provide you with more information. Medical Debt Now ...

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...

Will high inflation rates result in increased consumer bankruptcy filings in Oak Park and throughout Illinois? According to a recent article in Forbes , “the price for goods and services has increased 7.9% from the same time last year,” which means Americans are experiencing “the highest inflation rate since January 1982.” As a result, many households in the U.S. are struggling financially. The cost of groceries has increased, the cost of gas, electricity, and other utilities has risen sharply, and other expenses have gone up. As the article underscores, “forty percent of adults say their families are worse off financially now than prior to the pandemic,” and many households are struggling financially. Ultimately, inflation could mean that more consumers file for bankruptcy. What do you need to consider? Take Steps to Avoid Additional Costs Whether inflation has resulted in a struggle to pay your bills or has merely resulted in increased concern over finances in the future, it is impo...

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...

If you are struggling to repay debts you owe, and creditors are contacting you, you may be worried about the types of actions that creditors or debt collectors can take against you in order to recover the money you owe. You might be wondering, specifically, if you can be forced to file for bankruptcy. Involuntary consumer bankruptcies are not common, but they can happen under some circumstances. Our Oak Park bankruptcy lawyers can provide you with more information about involuntary bankruptcy, as well as details about your rights as a consumer under the Fair Debt Collection Practices Act (FDCPA) and other laws. Understanding How Involuntary Bankruptcy Works It is rare, but individuals can be forced to file for bankruptcy in limited circumstances through an involuntary bankruptcy petition. According to the U.S. Bankruptcy Code: “An involuntary case may be commenced only under Chapter 7 or 11 of this title, and only against a person, except a farmer, family farmer, or a corporation is n...

When you are struggling to pay your bills and your debts are piling up, you may be wondering if now is the right time for you to file for consumer bankruptcy . There are many different myths and misconceptions concerning the bankruptcy process. As such, you may be concerned about filing and wondering if you should hold out for as long as possible. In most situations where personal bankruptcy is most likely inevitable, waiting to file for bankruptcy can be more harmful in the long run. However, in some cases, you may want to wait to file for bankruptcy based on your circumstances. Whenever you are considering bankruptcy, you should seek advice from an Oak Park consumer bankruptcy attorney. In the meantime, ask yourself the following questions to determine whether it could be the right time to begin the bankruptcy process with assistance from an experienced attorney. Do You Qualify for Consumer Bankruptcy? The first question you will want to consider is whether you currently qualify unde...

Consumers in the Oak Park area who are considering filing for Chapter 13 bankruptcy but have a significant amount of debt should be relieved to know that President Biden recently signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act . The bill specifically provides additional protections to small businesses and individuals filing for Chapter 11 or Chapter 13 bankruptcy. While the changes to the law are not permanent, they will provide additional protections to debtors for the next two years. What do you need to know about the newly passed legislation? Our Oak Park consumer bankruptcy attorneys can provide you with more information. Language of the Bankruptcy Threshold Adjustment and Technical Corrections Act The Act was introduced by Senator Chuck Grassley in March 2022, and President Biden signed it into law on June 21, 2022. According to the language of the Act, it specifically “modifies provisions related to small business reorganization bankruptcies and...

Bankruptcy trustees oversee consumer and commercial bankruptcy cases, but trustees perform different roles depending upon the type of bankruptcy filing. In reorganization bankruptcies, as a recent article in The Yale Law Journal notes, there are specific trustees that handle Chapter 13 consumer bankruptcy cases, while businesses filing for Chapter 11 typically perform the role of trustee themselves as a debtor-in-possession. In other words, trustees are different and distinct when it comes to consumer and commercial reorganization bankruptcy cases. Yet as the article points out, the same distinction does not exist in Chapter 7 bankruptcy cases, and consumers who are filing for a liquidation bankruptcy ultimately could suffer the consequences. Argument for Distinction Between Consumer and Business Trustees in Chapter 7 Bankruptcy Cases What is the argument for a clearer distinction between consumer and business trustees in Chapter 7 bankruptcy cases? The article in The Yale Law Journa...

Whether you are considering the possibility of consumer bankruptcy or you have already made the decision to file, it is important to understand how your debts will be treated in a bankruptcy case. As such, you may be wondering if all debts are treated the same in a personal bankruptcy case, or if certain debts are handled differently. Generally speaking, debts in a bankruptcy case can be categorized as secured debt, priority unsecured debt, and non-priority unsecured debt. In addition, you should know that student loans are handled a bit differently in bankruptcy cases, and there are also types of debt that are ineligible for discharge. Our Oak Park bankruptcy lawyers have more information to explain the types of debts in bankruptcy cases and how they are handled. Secured Debt, Priority Unsecured Debt, and Non-Priority Unsecured Debt First, it is important to understand the differences between secured and unsecured debt. Secured debt is debt for which there is collateral, which means...

When you are planning to file for consumer bankruptcy in Illinois, it is equally important to understand the steps that you should and should not take. There are many things you can do in advance of your bankruptcy case and during the proceeding that ultimately can harm your case, and it is important to know what you should avoid. Our experienced Oak Park consumer bankruptcy attorneys have information for you about some of the common mistakes that are made in consumer bankruptcy cases that you should avoid. Mistake #1: Providing Inaccurate Information About Your Assets You must disclose all assets when you file for consumer bankruptcy, even assets that you believe will be exempt under the Illinois bankruptcy exemptions . If you intentionally fail to provide the bankruptcy court with full and accurate information about your assets, including accurate information about their value, you could be putting your bankruptcy discharge at risk and could ultimately face allegations of bankruptc...