Oak Park Real Estate & Estate Planning Blog

When an individual debtor — as opposed to a business debtor — is considering the possibility of filing for bankruptcy , there are a number of terms that can be used to describe the type of bankruptcy case. For a person who is contemplating bankruptcy, understanding when terms overlap and when they are distinct can be confusing, and the use of various terms can appear to complicate the overall bankruptcy process. While the bankruptcy process and U.S. bankruptcy law are, indeed, complex, our Oak Park bankruptcy attorneys can provide you with clarification concerning consumer bankruptcy or personal bankruptcy in Illinois. Consider the following information, and do not hesitate to reach out to our firm if we can answer any questions about getting started on a consumer bankruptcy case. Personal Bankruptcy, Consumer Bankruptcy, and Individual Bankruptcy are Interchangeable Terms Consumers are often confused about the different uses of the terms “personal bankruptcy,” “consumer bankruptcy,” ...

The term “exemption” is extremely important for any individual or married couple considering bankruptcy and is particularly important in Chapter 7 bankruptcy cases since exemptions allow debtors to exempt assets from liquidation. If you own a home in the Oak Park area and you are considering bankruptcy, it will be essential for you to learn more about the homestead exemption and how it works in Illinois. While the term “homestead” might seem old-fashioned or inapplicable to any assets you might currently own, the term actually refers to your primary residence (such as your home or your condominium). How does the homestead exemption work under Illinois law ? Our Oak Park bankruptcy attorneys can explain. Homestead Exemption Generally The general point of a homestead exemption is to allow a debtor to exempt a certain amount of equity or interest they have in their primary residence. Each state has its own homestead exemption. Some states permit debtors who are filing for bankruptcy to c...

Anyone who is thinking about bankruptcy and is learning more about different consumer bankruptcy processes has likely come across information about bankruptcy schedules. While the term “schedule” in other contexts refers to a timeline or listing of events, bankruptcy “schedules” are something different. Under the Bankruptcy Code , rather than referring to a timeline of events in a bankruptcy case, schedules are actually different documents that contain various personal and financial information that will be necessary for the bankruptcy court to have and to consider in your bankruptcy case. These schedules typically are filed alongside the bankruptcy petition or just afterward. Schedules are identified by letter, and there are schedules A through J for consumer bankruptcy cases. Whether you are filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you will need to identify the schedules that must be completed and filed in order for your bankruptcy case to move forward and, ultimatel...

Anyone in the Oak Park area who is considering personal bankruptcy to have student loans discharged should be aware that there is new guidance that will impact bankruptcy cases involving student loans. If you previously considered bankruptcy in order to have your student loans discharged, you likely came across a range of articles providing information about the difficulty — but not impossibility — of having student loans discharged in bankruptcy. For quite some time, student loans have been famously difficult to discharge in consumer bankruptcy cases, but at the same time, few consumers filing for bankruptcy have actually gone through the process that was required to see if their student loans could be discharged. That process was notoriously complex, costly, and time-consuming, requiring debtors to prove an “undue hardship” requirement. That undue hardship requirement largely required proving elements of what has become known as the Brunner test to show that continuing to pay stude...

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...

Consumers in Illinois and throughout the United States are routinely contacted by debt collectors attempting to recover money for various types of debts. In some cases, debt collectors are attempting to collect on legitimate debts, meaning debts that actually exist and which the consumer owes, and for which the statute of limitations has not run out. However, there are also debt collectors that try to collect on fraudulent debts, or that continue trying to collect on debts that have been discharged in bankruptcy , debts for which the statute of limitations has run, and debts that never belonged to that particular consumer in the first place. According to a recent news release from the Consumer Financial Protection Bureau (CFPB), the agency has reached a settlement with a “debt collection mill” that has been “bombarding consumers with junk lawsuits.” What should you know about the CFPB news, and what implications could it have for debtors in the Oak Park area? CFPB Sues for Illegal Deb...

In the New Year, you may be considering the possibility of filing for personal bankruptcy . As you may already know, the two most common types of personal bankruptcy are Chapter 7 bankruptcy cases and Chapter 13 bankruptcy cases. Both types of bankruptcy require the debtor to show eligibility, and the proof required to show a person’s eligibility for Chapter 7 will be much different from that required for a Chapter 13 case. In short, Chapter 7 requires the debtor to show that their income and assets are limited enough for liquidation bankruptcy to make sense. Differently, Chapter 13 bankruptcy requires the debtor to show that they have a regular income that is stable enough and of a high enough value for the debtor to reliably be able to make payments for three to five years in a reorganization bankruptcy. Both types of bankruptcy come with pros and cons. When it comes to the “pros,” what are the top benefits of bankruptcy in 2023? Our Oak Park bankruptcy attorneys have more informatio...

When a debtor files for consumer bankruptcy , can that debtor be responsible for a debt that has resulted from another party’s fraud even if the debtor did not know about the fraud? That is the question at the heart of a current case that is pending before the U.S. Supreme Court. The case is Bartenwerfer v. Buckley , and the case was argued on December 6, 2022. What do you need to know about the case and its potential implications for bankruptcy filings in Illinois? Our Oak Park bankruptcy attorneys can explain. Understanding the Facts of Bartenwerfer v. Buckley In Bartenwerfer, the married couple David and Kate Bartenwerfer purchased a house in San Francisco. They moved out of the house, and David started renovating it with Kate’s consent. However, Kate was not involved in the renovation process. After the renovation, they sold the house to the defendant, Kieran Buckley. Buckley identified defects and filed a claim against the Bartenwerfers, alleging fraud. Buckley was awarded damages...

Making the decision to file for bankruptcy can be difficult, especially if you are planning to file for Chapter 7 bankruptcy and trying to determine which of your assets will need to be liquidated in order to be eligible for a bankruptcy discharge. If you are considering Chapter 7 bankruptcy or any type of consumer bankruptcy, you may know that specific bankruptcy exemptions allow debtors to exempt certain assets. In a Chapter 7 bankruptcy case, exempt assets are not liquidated, and the debtor can keep those assets while remaining eligible for a discharge of their debts. In a Chapter 13 bankruptcy case, the fact that an asset is exempt does not mean that a debtor can keep the asset (because debtors do not have to give up assets in a Chapter 13 case), but rather that the value of an exempt asset does not have to be considered in the debtor’s repayment plan. Many debtors in Illinois receive some type of benefit, and some debtors receive multiple types of benefits from the government. Ho...

Anyone who is struggling with debt can feel overwhelmed, whether they owe $10,000 or $100,000 to creditors. Yet the total amount of debt you owe can determine whether personal bankruptcy is the right decision for you and whether it is the right decision to make currently. There are other factors to consider, including your income and assets and your employment prospects for the future, which could allow you to begin repaying some of the debt you owe. These issues can be complicated, and you should not make the decision to file for consumer bankruptcy until you have spoken with an experienced bankruptcy lawyer in Oak Park who can help you to assess your circumstances and to weigh the pros and cons of a bankruptcy filing. In the meantime, we know you might be wondering: how much debt is enough to file for bankruptcy? There is no specific number, but our firm can give you some things to consider. There is No Specific Debt Amount to Trigger a Personal Bankruptcy Filing You should know tha...

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...

When you are considering personal bankruptcy and doing preliminary research into the process, you are likely to come across a series of terms related to the end of a bankruptcy case. These terms are all distinct from one another, but their meanings likely are not obvious to a consumer who is seeking to learn more about personal bankruptcy and how different types of bankruptcy processes work. While there is a wide range of consumer bankruptcy terms that can be complex and may require an explanation from a dedicated bankruptcy lawyer, our firm wants to focus on three terms that are commonly used to describe the end of a bankruptcy case -- closure, dismissal, and conversion. What does it mean for a bankruptcy case to be closed, and how does that process differ from a bankruptcy dismissal or conversion? Our Oak Park bankruptcy attorneys can provide you with more information. Closing a Bankruptcy Case When a bankruptcy case is closed, or when there is a reference to the closing of a bankru...

Sometimes in bankruptcy cases, you will hear about something known as the “absolute priority rule.” Sometimes the absolute priority rule is known as “liquidation preference” in some bankruptcy cases, and it may not necessarily affect or make a difference in your specific bankruptcy case. However, it is important to know what the absolute priority rule is and how it works. Our Oak Park bankruptcy lawyers can provide you with more information about the absolute priority rule, and we can begin working with you today on your bankruptcy case. U.S. Bankruptcy Code and the Absolute Priority Rule The absolute priority rule, in short, refers to the priority order of creditors and shareholders in a bankruptcy case. In other words, it is a rule concerning the order in which particular classes or categories of creditors must be repaid in a bankruptcy case. It can be applicable in some liquidation bankruptcy cases, as well as in some reorganization bankruptcies. The terms of the absolute priority ...

Are you self-employed and considering the possibility of filing for personal bankruptcy in Illinois? Our experienced Oak Park bankruptcy lawyers know that you are likely to have many questions and concerns about the bankruptcy process, including your eligibility to seek bankruptcy protection without W-2s or more common ways of showing your average wages and general income. In short, self-employed people can be eligible to file for both Chapter 7 and Chapter 13 bankruptcy in Illinois, but there are some important things that you need to know. Proving Your Self-Employment Income Bankruptcy cases can be slightly more complicated for individuals who are self-employed because they do not have the same type of documentation concerning their regular income and the income they have earned in recent years. Under U.S. bankruptcy law , when a self-employed person wants to file for bankruptcy, they will need to ensure that they have sufficient information and documentation to prove their income. ...

Struggling with debt is one of the most stressful experiences in a person’s life, and it can be difficult to know what options may be available to you. If you are unable to pay your bills and debts are piling up, you might be considering consumer bankruptcy. If so, you might know that there are different types of personal bankruptcy and that individuals most often file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. These are very different types of bankruptcy, so it is important to understand the differences. Chapter 13 bankruptcy is a kind of reorganization bankruptcy that is commonly known as a wage earner’s plan, while Chapter 7 bankruptcy is a kind of liquidation bankruptcy. Is liquidation bankruptcy right for you? Before you make any decisions about filing for bankruptcy, you should discuss your specific circumstances with a bankruptcy lawyer in Oak Park. In the meantime, if you are wondering if liquidation bankruptcy is right for you, consider the following questions. Do You...

If you are thinking about filing for Chapter 7 bankruptcy , you likely know that this is a type of liquidation bankruptcy. What this means is that all non-exempt assets will be liquidated, and the money obtained from the liquidation of those assets will be used to repay creditors in order of their priority. Chapter 13 bankruptcy does not involve the liquidation of a debtor’s assets. When you are planning to file for Chapter 7 bankruptcy, you may be wondering: what property will I be able to keep if I file for liquidation bankruptcy? The good news is that Illinois law contains a variety of bankruptcy exemptions that can allow debtors to retain a wide range of assets even during and after a Chapter 7 bankruptcy case. Consider the following information from our Oak Park bankruptcy attorneys. You Will Need to Use Illinois’s Bankruptcy Exemptions The first thing to know when you are learning about which assets of yours will qualify for exemptions in your Oak Park bankruptcy case is that deb...

When you are planning to file for personal bankruptcy , it is important to understand how various bankruptcy exemptions in Illinois will apply to or impact your bankruptcy case. As you might already know, in a Chapter 7 bankruptcy case, all non-exempt assets will be liquidated so that creditors can be repaid and so that the debtor can receive a bankruptcy discharge. The debtor will be able to keep all exempt assets in a liquidation bankruptcy. In a Chapter 13 bankruptcy, exemptions are not used to determine which assets a debtor can keep since property is not liquidated. Rather, in a Chapter 13 bankruptcy case, exempt property does not count toward the total amount that the debtor must repay through a repayment plan. When you are researching bankruptcy exemptions, you might have come across an exemption described as a “tools of the trade” exemption. What is this exemption, and how does it work? Understanding the “Tools of the Trade” Bankruptcy Exemption Both the federal bankruptcy exem...

Bankruptcy trustees oversee consumer and commercial bankruptcy cases, but trustees perform different roles depending upon the type of bankruptcy filing. In reorganization bankruptcies, as a recent article in The Yale Law Journal notes, there are specific trustees that handle Chapter 13 consumer bankruptcy cases, while businesses filing for Chapter 11 typically perform the role of trustee themselves as a debtor-in-possession. In other words, trustees are different and distinct when it comes to consumer and commercial reorganization bankruptcy cases. Yet as the article points out, the same distinction does not exist in Chapter 7 bankruptcy cases, and consumers who are filing for a liquidation bankruptcy ultimately could suffer the consequences. Argument for Distinction Between Consumer and Business Trustees in Chapter 7 Bankruptcy Cases What is the argument for a clearer distinction between consumer and business trustees in Chapter 7 bankruptcy cases? The article in The Yale Law Journa...

When debtors in the Oak Park area file for Chapter 13 bankruptcy , they create a repayment plan that lasts for a period of three to five years. During that time, the debtor will make regular payments to the Chapter 13 bankruptcy trustee, who will then pay creditors. Once the debtor completes the terms of the repayment plan, remaining eligible debts can be discharged. However, during that period of three to five years, a debtor’s circumstances can change. For example, a debtor might get laid off from their job and may be unable to find work. Or, the debtor might suffer a workplace injury or be diagnosed with a debilitating disease that prevents that debtor from returning to work in a meaningful capacity and earning a regular income that will allow that debtor to continue making Chapter 13 plan payments. In short, circumstances can change, and a debtor might struggle to make regular payments. If you are currently making payments as part of a Chapter 13 plan but a change in circumstances ...