Oak Park Real Estate & Estate Planning Blog

What should individuals do when personal finances and small business expenses together result in insurmountable debt ? In many cases, Chapter 7 bankruptcy can be an option for Chicagoans who own small businesses and are dealing with a substantial amount of debt related to their business. A recent article in Forbes Magazine discussed the pros and cons of Chapter 7 bankruptcy for adults who are nearing retirement and have been careful with personal finances throughout their working lives but have significant business debt. By taking a look at the scenario presented in the article, we can see how filing for Chapter 7 bankruptcy can do more than help individuals who are facing credit card debt or insurmountable medical bills. Chapter 7 bankruptcy can help individuals who have little to no credit card debt but have opened business that are, as the article describes, “hemorrhaging dollars.” Nearing Retirement and Considering Bankruptcy The scenario presented in the F...

Does healthcare reform have an impact on the rate of personal bankruptcy filings ? According to a recent article in the Wall Street Journal , mandatory health insurance could reduce the number of consumer bankruptcy filings across the country. And with the recent U.S. Supreme Court decision upholding the tenets of the Affordable Care Act (ACA), Illinois and the rest of the country may, perhaps, see a decline in the number of consumers filing for Chapter 7 or Chapter 13 bankruptcy. Recent History of Mandatory Insurance and Bankruptcy Filings How do we know that mandatory health insurance could have a noticeable effect on personal bankruptcy in our country? A study conducted last year by Northeastern University law professor Daniel Austin determined that Massachusetts saw a decline in consumer bankruptcy filings after health insurance became mandatory for all residents of the state back in 2005. Austin determined, in short, that Massachusetts residents who filed for ...

The U.S. Supreme Court recently ruled in favor of Bank of America when it unanimously decided that “homeowners who declare bankruptcy can’t void a second mortgage, even if the home isn’t worth what they owe on the first mortgage,” according to an article in the Chicago Tribune . In short, it is a big win for the banks. Underwater Primary Mortgages and Personal Bankruptcy How did the case come about? It involved homeowners in Florida who were underwater on their first mortgages and wanted to use consumer bankruptcy to “strip off” a second mortgage. In general, the homeowners argued that, since their second mortgages would only be paid after their primary mortgages—and those primary mortgages could be canceled in a Chapter 7 bankruptcy proceeding—the second mortgages are “essentially worthless,” according to a report in the Wall Street Journal . The lower courts that heard the cases found in favor of the homeowners, indicating that they could “nullify the second loans”...