Oak Park Real Estate & Estate Planning Blog

What is consumer bankruptcy , and how does it work? How does consumer bankruptcy differ from other types of bankruptcy? And is consumer bankruptcy right for you if you are struggling with debt? In order to gain a clearer understanding of the overall consumer bankruptcy process and whether you should consider filing, it is important to learn more about the different aspects of consumer bankruptcy and the U.S. Bankruptcy Code . Our experienced Oak Park bankruptcy attorneys are here to provide you with more information, and we can speak with you today about your circumstances if you are considering the possibility of filing for bankruptcy. Consumer Bankruptcy is a Term Referring to Bankruptcy for Individuals The term “consumer bankruptcy” is used to refer to bankruptcy cases that are filed by individuals as opposed to businesses. Consumer bankruptcy can go by various terms, including “personal bankruptcy” and “individual bankruptcy.” While consumer bankruptcy is sometimes known as individ...

When an individual files for Chapter 7 or Chapter 13 bankruptcy in Illinois , they typically do so with the aim of receiving a bankruptcy discharge at the end of the bankruptcy case. Yet it can be confusing for a debtor to understand their rights in relation to a debt discharge and contact from debt collectors. For example, at what point, if any, can a debt collector attempt to collect on a debt that will soon be discharged in a bankruptcy case? Or, is there any time at which a debt collector can try to collect a debt that has been discharged? Our Oak Park bankruptcy lawyers can clarify your rights when it comes to debt discharges and debt collectors. The following are five things you should know about debt collectors and bankruptcy discharges in Illinois. 1. Debt Collectors Cannot Attempt to Collect Debts That Have Been Discharged Once you have received a bankruptcy discharge — meaning that eligible debts have been discharged — debt collectors cannot attempt to collect those debts. As...

When a consumer owes debt to a creditor, or when the debt has been turned over or sold to a debt collector, the consumer will likely be contacted about the debt. It is important for consumers to know that they have certain protections under the Fair Debt Collection Practices Act (FDCPA), and that debt collectors cannot take certain actions or engage in particular behaviors according to the law. In order for a consumer to understand when they are being treated fairly (and when they are not), it is necessary to have an understanding of how the consumer debt collection process works. Debt Collectors are Permitted to Contact You But Must Comply With the FDCPA The Fair Debt Collection Practices Act (FDCPA) governs consumer debt collection practices. Under the FDCPA, debt collectors are permitted to contact consumers to try to collect debts, but there are certain restrictions, and some practices are unlawful. Consumers should know their rights under the FDCPA. Certain Debt Collection Pract...

Debt collectors often attempt to charge extra fees when collecting debts from consumers , particularly when the consumer seeks to make a payment online or to make payments in other specific ways that the company says will incur a fee. According to a recent news release from the Consumer Financial Protection Bureau (CFPB), the CFPB has “issued an advisory opinion affirming that federal law often prohibits debt collectors from charging ‘pay-to-pay’ fees,” which are often known as “convenience fees.” As the CFPB clarified, these pay-to-pay fees, or convenience fees, “are imposed on consumers who want to make a payment in a particular way, such as online or by phone.” The advisory opinion is part of a longer focus by the CFPB to address “junk fees” that affect consumers. What do you need to know about the CFPB’s advisory opinion and any effects it could have? Details of the Advisory Opinion According to the news release, the CFPB’s recent advisory opinion is based on language in the Fair ...

Anyone who is struggling with debt can experience significant stress and anxiety upon receiving a phone call or written notice from a creditor or debt collector that threatens to sue if the debt is not paid. For many consumers in the Oak Park area, the possibility of facing a lawsuit over debt can be scary, and it is difficult to know what steps you should take. You might be wondering: should I file for bankruptcy if a creditor has threatened to sue me? In answering that question, it will be essential to consider the specific facts of your case and whether bankruptcy is the right option for you. In many cases, bankruptcy can be beneficial if you are facing a lawsuit from a creditor. Our Oak Park bankruptcy lawyers can explain in more detail, and we can also speak with you about your circumstances to help you determine the best path forward. Creditors Cannot Make Threats When Trying to Collect Debts While the threat of legal action can be unnerving, it is important to know that there a...

The U.S. Supreme Court recently declined to hear a case concerning underwater mortgages and liens on those properties in consumer bankruptcy cases. In declining to hear the case, The Court has left previous case law intact that says a debtor cannot strip down, or remove, a lien against an underwater mortgage through consumer bankruptcy. Our experienced Oak Park bankruptcy lawyers want to give you more information about the recent case and Supreme Court history on the issue. Details of the Supreme Court’s Rulings on “Stripping Down” In 1992, the U.S. Supreme Court heard the case Dewsnup v. Timm , in which it ruled that Section 506(d) of the U.S. Bankruptcy Code does not allow a debtor to “strip down” a lien to the “judicially determined value of the collateral.” That case involved an underwater mortgage, and the Court’s ruling made clear that a debtor cannot reduce the amount owed on a partially undersecured mortgage lien against the debtor’s home. In refusing to reduce the lien on...

If you have consumer debt in Illinois and do not make payments on it, there is only a certain amount of time under Illinois law that creditors can continue to take legal action against you according to the statute of limitations. Once the debt becomes time-barred , a debtor no longer has to worry about being sued over that debt. However, it is essential for debtors in Oak Park to know that there are actions they can take (often without even knowing it) that can revive their time-barred debt. In other words, if a debtor makes a particular kind of statement or performs a certain action, the clock on the statute of limitations might start all over again, and the creditor may be allowed to seek compensation through a civil lawsuit. According to a recent report in The Washington Post , a new rule from the Consumer Financial Protection Bureau (CFPB) actually could result in debtors getting “tricked” into reviving those debts. Understanding How the Statute of Limitations Affects Creditor ...

If you are currently managing a substantial amount of debt, chances are good that you are not alone. According to a recent report from Consumer Affairs , consumer debt has reached a new high of about $14 trillion. That information comes from the Center for Microeconomic Data, which is part of the Federal Reserve Bank of New York. The consumer debt included in that figure includes debt from a variety of sources, including “mortgages, credit cards, student loans, personal loans, auto loans, and all other forms of consumer debt.” While some consumers may be able to manage debt , others are struggling with it. We want to discuss the rise in consumer debt and to consider options for dealing with debt. Consumer Debt Amounts Steadily Rising The $14 trillion amount of consumer debt is part of a rising trend. According to the article, “the total has been rising for 21 straight quarters and has now surpassed the previous high reached in the third quarter of 2008, just as the financial crisis h...

Struggling with debt can be extremely difficult under any circumstances, yet learning that you are facing a debt collection lawsuit can be considerably more complicated than dealing with debt collectors alone. The Consumer Financial Protection Bureau (CFPB) estimated that about 70 million Americans have had to deal with debt collectors at some point in their lives. Moreover, “around 25% felt threatened during their dealings with such agencies,” according to a recent article in Credit.com . While the Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using certain language on the phone with debtors and from making threats, many debtors face this kind of behavior from debt collectors anyhow. While the FDCPA prohibits debt collectors from making threats to debtors about physical harm or criminal arrest, debt collectors can file lawsuits against debtors when the claim is not time-barred. What should you do if you are served papers for a civil lawsuit that a debt c...

The Fair Debt Collection Practices Act (FDCPA) protects consumers against unfair debt collection practices, as well as harassment by debt collectors . However, consumers regularly experience contact from debt collection companies that appears to be in violation of the federal law. According to a recent article in Wired Magazine , “One in four consumers contacted by debt collectors feels threatened, and most consumers say the calls persist even after requests to stop.” Indeed, many borrowers describe these practices as “a living nightmare.” Is there a better method for debt collection that does not run the risk of harming consumers or violating their rights under the FDCPA? The article discusses a new debt collection startup that aims to use algorithms and technology to revolutionize the debt collection industry, and we want to look closely at its methods and benefits. Using Technology to Change the Face of Consumer Debt Collection The new startup is TrueAccord, ...

Many unscrupulous debt collectors violate the Fair Debt Collection Practices Act (FDCPA) by harassing consumers and making fraudulent claims about debts that are owed. In numerous debt collection scenarios, the individuals on the receiving end of debt collection calls and other forms of contact never owed the debt in the first place. For other consumers, it is important to know that the statute of limitations may have passed on the debt, which means that the debt collector cannot file a claim in order to recover the debt. Although the statute of limitations does not change the fact that a consumer may owe the debt to a creditor, it does prevent a debt collector from taking action against a consumer after a specific period of time. In other words, a consumer should not need to worry about being the subject of a debt collection lawsuit once the limitations period has run out. This is also known as a time-barred debt. However, there are things that a consumer can do to reacti...

You might not expect to receive a debt collection call in which a collector is attempting to recoup a debt that is owed by a deceased relative, but it happens more often than you think. For instance, after a parent or sibling passes away, debt collectors still want to try to collect on any debts they owed and often turn to family members. Is it lawful to try to collect a debt owed by a deceased person by contacting a close family member, or does this type of contact violate the Fair Debt Collection Practices Act (FDCPA)? More generally, what are the rules when it comes to debt collection practices from family members of deceased debtors? We have collated information to help answer these questions from an article on CreditCards.com and a fact sheet from the Federal Trade Commission (FTC). You are Not Liable for the Debts of Your Deceased Family Members The first and most important thing for family members receiving these types of debt collection calls to know i...

Whether you are a consumer in Oak Park or elsewhere in Chicagoland, it is important to know how to protect yourself from debt collectors, whether they are legitimate debt collectors who are engaging in practices that violate the Fair Debt Collection Practices Act (FDCPA) or scam debt collectors. According to a recent article in Forbes , more and more consumers are facing harassment from debt collection companies—both real and fraudulent—in efforts by those collectors to obtain money. Many of those consumers simply do not owe the debts for which they are being contacted, while other consumers do owe debts but are being treated unfairly by the collection companies. The Forbes article addresses the prevalence of debt collection fraud and harassment , and discusses some of the ways that consumers can protect themselves. Protecting Yourself from Debt Collection Scams One of the reasons that debt collection scams work is that many of the consumers being targeted do a...