Oak Park Real Estate & Estate Planning Blog

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...

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...

At the beginning of the COVID-19 pandemic, economic experts and commentators started to predict that a wave of bankruptcy filings would come months later as a result of job losses and business closures. By and large, that consumer bankruptcy wave has not come, largely due to government relief and stimulus plans that have allowed debtors to continue paying their bills even if their jobs have not returned. While the possibility of a coming bankruptcy wave is still looming when government relief ends, it is important to know that not all Americans have been able to stay afloat during the pandemic. Certain populations and demographics have been disproportionately affected financially by the pandemic and have in fact been filing for personal bankruptcy at much higher rates compared to others. According to a recent article in Yahoo! Finance , Black women have been filing for consumer bankruptcy at much higher rates than other consumers, suggesting that structural racism and sexism may b...

As you might know, the CARES Act, which was passed in response to the COVID-19 pandemic, provided a number of bankruptcy modification options for individuals and small businesses who were struggling as a result of virus-related shutdowns and job losses or work hour reductions. However, those provisions were designed to expire on March 27, 2021. In order to extend the protection and modification options for debtors across the country, U.S. Senator Dick Durbin (D-Illinois) and U.S. Senator Chuck Grassley (R-Iowa) introduced a piece of bipartisan legislation. That legislation, the COVID-19 Bankruptcy Relief Extension Act , would extend protections for individuals and small business owners into March 2022. What is covered when it comes to consumer bankruptcy , and what protections would be extended if the proposed legislation passes? Bankruptcy Modifications Under the CARES Act and Proposed COVID-19 Bankruptcy Relief Extension Act The CARES Act provided some of the following key protec...

Many sole proprietors in Oak Park and throughout Illinois receive Paycheck Protection Program loans, or PPP loans, in the first few months of the COVID-19 pandemic. Those PPP loans were issued with a possibility of forgiveness in the future if businesses that received the loans used them in particular ways required by the U.S. Small Business Administration (SBA). The PPP loan program has opened again, and sole proprietors and other small business owners were specifically eligible for loans—before larger businesses—between February 24 and March 9, 2021. According to an article in Quartz , the SBA also issued a new rule that ultimately allows sole proprietors and freelancers to obtain larger PPP loans because it “allows entrepreneurs without employees to calculate their loan eligibility using gross income rather than net income, making the loans far more generous, especially for businesses with little or no profit.” What happens when a sole proprietor cannot repay the PPP loan and can...

The COVID-19 pandemic has resulted in millions of job losses, which in turn has left millions of Americans unable to pay their bills and mortgages. In some cases, struggling debtors are also dealing with long-term health problems as a result of the coronavirus on top of substantial medical debt. For many of these debtors, there are questions and concerns about how to handle the debt they are facing and whether it is possible to discharge medical debt from COVID-19 hospital stays and doctor’s appointments through consumer bankruptcy . In most cases, medical debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy cases. If you have questions about discharging medical debt related to COVID-19 in a personal bankruptcy case, you should seek advice from one of the experienced Oak Park consumer bankruptcy attorneys at our firm. COVID-19 is Resulting in Medical Debt for Consumers When a person is diagnosed with COVID-19 and has a moderate or severe case of the virus, hospitalization ma...