Oak Park Real Estate & Estate Planning Blog

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, ...

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 ...

As the holiday season approaches, it is important to consider a range of issues if you are thinking about filing for personal bankruptcy . Depending upon your circumstances, it could make sense to file for bankruptcy before the holidays, or it could be more sensible to file for bankruptcy after the holidays. You should discuss your specific circumstances with a bankruptcy lawyer in Oak Park before you make any decisions. In the meantime, the following are some important considerations to keep in mind when you are thinking about bankruptcy around the holiday season. Debt Accumulated Close to a Bankruptcy Filing Will Not Be Dischargeable If you use your credit card to make charges for holiday gifts, holiday travel, holiday decor, or other expenses close to the time when you are planning to file for bankruptcy, you should know that these debts are unlikely to be discharged in a consumer bankruptcy case. Under the U.S. Bankruptcy Code , any purchases that are made within 90 days from the d...

Debtors in Illinois consider personal bankruptcy for many different reasons, including medical debt, student loan debt, credit card debt, and other types of debt. If you have a substantial amount of credit card debt and are thinking about the possibility of filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy in Oak Park, you should know that you are not alone. Credit card debt is a common form of debt that results in bankruptcy filings in Illinois and across the country, and it is routinely discharged in consumer bankruptcy cases. If you have credit card debt and are thinking about bankruptcy, the following are some of the key things you should know. Consumers Owe Billions in Credit Card Debt According to a recent study conducted by WalletHub, credit card debt in America is climbing. Indeed, “consumers added a total of $86.2 billion in new credit card debt to their tab during 2021, capped off by a $73.1 billion increase during the fourth quarter alone.” In the first quarter of 2...

Are you thinking about filing for Chapter 7 or Chapter 13 bankruptcy , and are you wondering about types of debt you have and whether they are dischargeable? While there are some types of debt that are not dischargeable in consumer bankruptcy cases, there are many forms of commonly held debt that can be discharged in your bankruptcy case. If you have questions, you should always seek advice from a bankruptcy lawyer who can help you. In the meantime, the following are examples of some of the most common types of debt that are dischargeable in personal bankruptcy cases under the U.S. Bankruptcy Code . Credit Card Debt Did you know that more than 191 million Americans currently have credit cards and that millions of households are currently carrying tens of thousands of dollars in credit card debt? According to Debt.org, credit card debt is one of the most common forms of consumer debt, and it is nearly always dischargeable in a bankruptcy case. While there are some exceptions when a ...

While many consumers worry about the aftermath of filing for personal bankruptcy , it is critical for you to know that you can start improving your credit almost immediately after you receive a bankruptcy discharge. For many debtors in Illinois and across the country, Chapter 7 bankruptcy can allow for a fresh financial start, while Chapter 13 bankruptcy can allow for debt reorganization and can, in many cases, allow homeowners to avoid bankruptcy. Yet many debtors hold off on filing for bankruptcy because they assume it will be difficult to rebuild credit after a consumer bankruptcy. We want to emphasize that you can rebuild your credit after filing for bankruptcy, and the following are some key steps to get you started. If you have additional questions or need assistance with your bankruptcy filing, you should seek advice from an experienced Oak Park consumer bankruptcy attorney. Apply for a Retail Credit Card or a Secured Credit Card In order to rebuild your credit after a consum...

Consumer debt affects adults of all ages, from young adults to the elderly. When it comes to tracking personal bankruptcy filings, many older adults past the age of retirement are filing for bankruptcy, yet younger adults also file for consumer bankruptcy with some frequency. There may be a significant difference in the way that very young adults who are part of Generation Z manage their debts in comparison with adults of other generations, according to a recent article in Ladders . That article cites a Lending Point study that reports “Gen Z may be just getting into their credit-using years, but they are already showing significant differences in their credit profiles from the Millennials and GenXers that preceded them.” In short, the article intimates that Generation Z adults may be on a trend to have less difficulty managing consumer debt, and thus ultimately could be less likely to file for bankruptcy than consumers in other generations. Generation Z Consumers Have Higher Credi...

Many credit cards give consumers the option of adding an “authorized user” to the card. There are many benefits to this option, both for the credit account holder and for the authorized user. However, having an authorized user on your account or being an authorized user on an account can get complicated if either the authorized user or the account holder decides to file for personal bankruptcy . We want to say more about authorized users and consumer bankruptcy . What is an “Authorized User”? Being named as an authorized user allows you to build or rebuild your credit if the account holder is in good standing on the credit card. In other words, the authorized user can have access to the same credit line as the account holder, and the authorized user’s credit score will reflect access to the account and how payments are made on the account. For someone who is trying to rebuild credit after bankruptcy, becoming an authorized user can be extremely helpful. However, as an ...

If you are carrying a significant balance on your credit cards, you may not be alone with your debt struggles . But just because more Americans are carrying more credit card debt does not mean that living with revolving balances is a long-term solution to your financial problems. According to a recent article in Nerd Wallet , with rising interest rates, more people who carry substantial revolving balances may find their credit card bills even more difficult to manage. Since last year, revolving credit card balances across the country have risen by about 5% to $420.22 billion. For some of those debtors, filing for personal bankruptcy may be the best solution if paying off the credit card debt does not seem feasible. Average Credit Card Debt and Difficulty with Repayment According to the article, the average household in the U.S. carries a revolving credit balance of almost $7,000. Revolving balances refer to those balances that you do not pay off, but that you ca...

One of the most common reasons for residents of Oak Park and Chicagoland to file for personal bankruptcy is credit card debt. Many people spend more on credit than they can reasonably repay each month. While maintaining a revolving balance might be necessary in certain circumstances—such as when an unexpected expense arises for a significant household repair or a medical emergency—it is never a good idea to plan to have a revolving balance. A revolving balance refers to the amount of money that has been charged to a credit card but goes unpaid when the bill is due. For instance, if you charge $5,000 in a month and can only pay $500 when the bill is due, the remaining $4,500 on which interest will be charged is the revolving balance. According to a recent article from CNBC , consumer debt has been growing over the last several years, and by the end of 2018 it will reach a new high. Will the increase in consumer debt lead to more consumer bankruptcy filings? American...

According to a recent article in Bloomberg , more American families are incurring debt at a particularly high rate than most of us would assume. As the article suggests, we have not seen the current rates of consumer debt in which individuals are late on payments for auto loans and credit cards since 2008. In some cases, reports about more consumers using credit cards and buying new automobiles can actually suggest that the economy is improving or is thriving; people would not necessarily be making purchases if they were not employed and in a position to do so. However, when reports indicate that consumers are tending to fall behind on debt payments , such reports could intimate that we are heading toward another financial crisis. What else should Oak Park residents know about consumer debt and the risks of falling behind on auto loans and credit card payments? Higher Charge-Off Rates Reflect Consumers’ Inability to Pay Among the first indications of unpaid auto...

Can a debt collector file a time-barred claim as a result of the statute of limitations running out against a debtor in a consumer bankruptcy proceeding without violating the Fair Debt Collection Practices Act (FDCPA)? That was the question the U.S. Supreme Court had to decide in Midland Funding, LLC v. Johnson . The Court found ruled against the debtor in a 5-3 decision, overturning the Eleventh Circuit’s ruling in favor of the debtor. Debtor Argues Time-Barred Claims in Bankruptcy Proceedings Prohibited by FDCPA We have discussed this case previously, prior to it being decided by the U.S. Supreme Court. It is important to understand the facts of the case in order to appreciate the Supreme Court’s ruling. As such, we would like to give you a brief recap: In 2014, a debtor filed for Chapter 13 bankruptcy. Shortly thereafter, Midland Funding, LLC, a debt collector, filed a “proof of claim,” which asserted that the debtor owed $1,879.71 in credit card debt. The proof o...