Oak Park Real Estate & Estate Planning Blog

If you are considering the possibility of filing for Chapter 7 bankruptcy , you may know that you need to meet certain requirements in order to show your eligibility for this type of bankruptcy. Back in 2005, changes to U.S. bankruptcy law made it more difficult for consumers to be eligible for Chapter 7 bankruptcy, which is a type of liquidation bankruptcy. Those changes to the law were designed to prevent abusive bankruptcy filings in situations where the debtor actually has the means to repay some of the debt that they are seeking to discharge. In practice, however, those changes to the law have made the bankruptcy process more difficult and complicated for many debtors in Oak Park and across Illinois. The U.S. Department of Justice recently issued changes to median household incomes, which will result in changes concerning which debtors will need to take the “means test” in order to qualify for Chapter 7 bankruptcy in the U.S. We want to tell you more about these changes and to en...

If you are having difficulty managing your debt and are considering consumer bankruptcy, you may be wondering whether Chapter 7 bankruptcy is better for you than Chapter 13, or vice versa. Many debtors think that it can be possible to choose between Chapter 7 and Chapter 13 bankruptcy , but this is not often the case. A debtor who is eligible for Chapter 7 bankruptcy likely will not be eligible for Chapter 13 bankruptcy, and vice versa. Ultimately, Chapter 7 bankruptcy could better meet your needs than Chapter 13 bankruptcy, but that alone does not mean that you will be eligible to file for Chapter 7 bankruptcy. We will explain more below, but if you have questions, you should get in touch with an experienced Oak Park bankruptcy attorney to discuss your options. Chapter 7 Being Preferable Does Not Mean That You are Eligible You might be thinking that you would prefer to file for Chapter 7 bankruptcy because you can receive a discharge of your debts relatively quickly, and you can ge...

Struggling with debt is never easy, and many consumers throughout the Chicago area have made the decision to file for consumer bankruptcy . Yet reaching the conclusion that either Chapter 7 bankruptcy or Chapter 13 bankruptcy is the right option for you can be difficult. Many debtors do not know if they have other options available to them to avoid bankruptcy, or if they are even eligible for the type of bankruptcy they are considering. If you have questions about whether it is time to file for personal bankruptcy, you should always work with an experienced Oak Park bankruptcy lawyer on your case. In the meantime, however, the following are some questions you can ask yourself to determine whether filing for bankruptcy could be the right decision for you. Are Your Debts Dischargeable? The first question you will want to consider is whether you have the types of debts that are dischargeable in a consumer bankruptcy case. If your debts are not dischargeable, filing for personal bankrup...

If you are an individual (and not a business) who is thinking about filing for Chapter 7 bankruptcy , you need to know up front that you will need to be able to pass the “means test” in order to be eligible for Chapter 7 bankruptcy in Oak Park. The means test was instituted as part of the bankruptcy reforms that occurred in 2005 to prevent individual consumers who have the ability to repay debts from obtaining a swift discharge. The drafters of the bankruptcy reform measure thought it would be abusive to allow a consumer who earns a regular paycheck to have assets liquidated. When you are considering Chapter 7 bankruptcy, which is a liquidation bankruptcy, you are probably wondering, “Can I pass the means test?” We want to give you more information about the means test, and to clarify what your options might be in the event that you cannot pass the means test to file for Chapter 7 bankruptcy. Determining Household Income In general, the first step toward passing the means test is to...

We recently discussed some common mistakes to avoid when taking the “means test” to determine your eligibility for Chapter 7 bankruptcy . We want to provide you with more information about common mistakes to avoid when taking the means test. In order to be eligible for a liquidation bankruptcy , the U.S. Courts clarify that a consumer must be able to pass the means test. However, in many cases, consumers make mistakes when taking the means test and incorrectly come to the conclusion that they are ineligible for a liquidation bankruptcy. In Part I, we told you about three common mistakes debtors make when taking the means test. Here, we will continue that list of common errors. Taking the Means Test When You are Not Required to do So As we mentioned above, the means test is necessary in most cases for consumers to prove that they are eligible for Chapter 7 bankruptcy and that a liquidation bankruptcy would not be abusive. However, there are a couple of key situatio...

If you are thinking about filing for Chapter 7 bankruptcy in Oak Park, Illinois , it is important to learn more about how a consumer qualifies for this type of bankruptcy. In short, anyone who wants to file for personal bankruptcy under Chapter 7 will need to pass what is known as the “means test.” The U.S. Courts explain that the means test is used to “determine whether the chapter 7 filing is presumptively abusive.” To put that another way, the means test is designed to determine whether a debtor has too much income, or too much earning ability, to be eligible for Chapter 7 bankruptcy without it being unfair. Since Chapter 7 is a liquidation bankruptcy, a debtor’s non-exempt property will be liquidated, and the debtor can get a fresh start with a bankruptcy discharge. Yet for many consumers, taking the means test is complicated, and it is easy to make mistakes without the help of a bankruptcy lawyer. The following are some common mistakes that you should avoid when you ar...

When debtors in Oak Park are thinking about filing for bankruptcy , they are most often considering either Chapter 7 bankruptcy or Chapter 13 bankruptcy. You may know that, in order to be eligible for Chapter 7 bankruptcy , you must pass what is known as a “means test.” The means test takes a look at your assets and income, along with other factors, to determine whether a liquidation bankruptcy is appropriate for your situation. Chapter 7 bankruptcy, unlike Chapter 13 bankruptcy, results in a discharge of most consumer debts once the bankruptcy has been completed. Typically, when a consumer cannot pass the means test, he or she will rely on Chapter 13 bankruptcy to help get back on track with debts and finances. However, many consumers do not know that there are also eligibility requirements for Chapter 13 bankruptcy. What happens if you have too much debt to file for Chapter 13 bankruptcy protection? Determining Eligibility for Chapter 13 Bankruptcy in Oak Park If...