Oak Park Real Estate & Estate Planning Blog

Are there situations in which you can be required to repay debts you owe even after you receive a bankruptcy discharge ? Can a creditor continue trying to collect on debts you owe after your bankruptcy case has been completed or, worse, force you to reaffirm your debts? There are relatively few types of debts that a debtor will still owe following a bankruptcy discharge, and some of those debts may be reaffirmed debts based on the particular situation of the party filing for bankruptcy. However, U.S. bankruptcy law does not permit debtors to continue taking legal actions in attempts to collect on debts that have been discharged in a bankruptcy case. Our Oak Park bankruptcy lawyers can tell you more about reaffirmed debt and how debt responsibilities can persist after a bankruptcy discharge. Reaffirming Debt is a Process That Will Occur Prior to a Bankruptcy Discharge One of the first things to know is that, if any debt is going to be reaffirmed such that a debtor still owes it fol...

For many Americans who are struggling with debt, one of the most difficult aspects of owing money is the constant contact from creditors and debt collectors. Even though consumers do have clear rights outlined in the Federal Debt Collection Practices Act (FDCPA), which include limitations on the times at which a debt collector can call and the ability for a debt collector to contact debtors at their places of employment, many people who owe substantial consumer debt still face seemingly relentless phone calls, emails, and other forms of communication from creditors or debt collection companies. If you are in this situation, you might be wondering: can consumer bankruptcy prevent creditor or debt collector harassment? Or, in other words, can filing for bankruptcy stop these creditors or debt collectors from engaging in this kind of constant contact? In short, the answer is yes due to the automatic stay in Chapter 7 and Chapter 13 bankruptcy cases. We want to provide you with more ...

When you file for consumer bankruptcy , you should not have to be worried about creditors continuing to engage in collection activities against you because of the automatic stay. Yet creditors and debt collectors do not always abide by the law. What happens, then, in a case where the creditor violates the automatic stay after you have filed for personal bankruptcy ? Understanding How the Automatic Stay Works After you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, something known as the “automatic stay” immediately applies to your case and prevents creditors or debt collectors from taking any additional actions against you in order to collect on debts owed. According to the Cornell Legal Information Institute (LII), the automatic stay is “an automatic injunction that prohibits most creditor collection activities after the debtor has filed for bankruptcy,” and it “begins at the moment the bankruptcy petition is filed.” For example, the automatic stay prevents creditors from...

Whether you are thinking about filing for bankruptcy or have recently filed for bankruptcy, you may be wondering if you need to tell your creditors about your bankruptcy plans. Are there any benefits to informing your creditors about your plans to file for bankruptcy or the fact that you have already filed for bankruptcy? Are there any laws that require debtors to alert their creditors about consumer bankruptcy plans or filings? In short, a consumer is never required to get in touch directly with a creditor to alert them to bankruptcy plans or filings. However, it could be helpful in some scenarios to alert a creditor about a bankruptcy case. If you have questions about your responsibilities as a debtor when you file for bankruptcy, it is important to have an experienced Oak Park bankruptcy lawyer who can assist you throughout your bankruptcy case. Potential Benefits of Informing Creditors About Bankruptcy Plans Before You File If you are considering bankruptcy but are also conside...

Over the last year, we have discussed the case of Taggart v. Lorenzen (2019) and the U.S. Supreme Court’s decision to consider whether a creditor can be held in civil contempt for attempting to collect a debt after the bankruptcy court issues a discharge order in a consumer bankruptcy case. The U.S. Supreme Court recently released its decision in this case, and the decision was unanimous. Writing for the majority, Justice Breyer clarified that a creditor can be held in civil contempt only in situations in which there is “ no fair ground of doubt as to whether the order barred the creditors conduct.” The Court went on to clarify that the holding means that “civil contempt may be appropriate if there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful.” As you might realize from reading this language from the case, the Court’s decision is friendlier to creditors in situations involving bankruptcy cases where the creditor continues t...

Should debt collectors be punished if they continue to try to collect on debts that have been discharged in bankruptcy ? Consumer protection advocates argue that they should, but courts across the country have not agreed about the answer to this question. Given that bankruptcy judges have reached different conclusions concerning “how easy it should be to punish debt collectors who pursue debt even after a person is no longer obligated to pay,” according to a recent article in The Wall Street Journal , the U.S. Supreme Court will now decide the issue. We previously discussed this case, Taggart v. Lorenzen , after the U.S. Supreme Court agreed to hear the case. Now that the Supreme Court has heard arguments in the case, we have a better sense of the types of questions the Court focused on during oral arguments. We want to say more about how the Court approached the issues in the case, and to discuss possible outcomes. Key Facts from Taggart v. Lorenzen As a brief reminder about what is...

Many Oak Park residents have struggled with debt at one point or another, and many continue to face seemingly constant calls from debt collectors . In some cases, debt collectors may be violating the terms of the Fair Debt Collection Practices Act (FDCPA), even when debtors legitimately owe money, by harassing debtors, calling at odd hours, threatening or intimidating debtors, and using other unlawful tactics. In other situations, debt collectors engage in unlawful behavior by attempting to collect on debts that the person being targeted does not actually owe, or attempting to file claims to collect on debts that have been time-barred by the Illinois statute of limitations. When you already are struggling with debt and attempting to get on top of your monthly bills, having to deal with debt collectors can add enormous stress to your day-to-day life. A recent article in U.S. News & World Report provides some important tips for dealing with debt collectors. Understand Who is Att...

For any Oak Park debtors who have recently filed for personal bankruptcy or are considering consumer bankruptcy , it is important to know about punitive damages and the U.S. Bankruptcy Code’s automatic stay . In short, the U.S. Bankruptcy Code says that, in some cases, debtors can receive punitive damages when a creditor intentionally violates the automatic stay. To understand why this is significant, we will tell you more about punitive damages and the automatic stay, and then we will discuss situations in which punitive damages may be awarded for a violation of the automatic stay. What are Punitive Damages? Generally speaking, courts recognize two different types of damages awards - compensatory damages and punitive damages. Compensatory damages are those that are supposed to compensate a person for his or her losses, and they are typically characterized as general and special damages. The other type of damages award is known as a punitive damages award. Debtors may...