Oak Park Real Estate & Estate Planning Blog

If an Oak Park resident files for consumer bankruptcy , as soon as the debtor files a bankruptcy petition, an automatic stay prevents creditors from continuing to attempt to collect on any debts that the debtor may owe. What happens to a creditor who continues to try to collect on debt even after learning that the debtor has filed for Chapter 7 or Chapter 13 bankruptcy ? Similarly, what happens to a creditor that continues to make efforts to collect on a debt once a bankruptcy case has been closed and the debtor’s debts are discharged? Do the answers to those questions change if the creditor did not realize that the debtor filed for bankruptcy or that the debt(s) had been discharged in a bankruptcy? These are the issues that the U.S. Supreme Court will be considering when it hears a case out of the Ninth Circuit Court of Appeals, Taggart v. Lorenzen . While the Ninth Circuit ruling can not yet impact debtors and creditors in Illinois, the U.S. Supreme Court’s decision in the case wi...

The U.S. Supreme Court agreed to hear a case in which consumers who had defaulted on their car loans and argued that Santander, which had purchased the debts, was acting in violation of the Fair Debt Collection Practices Act (FDCPA). In this case, after the petitioners defaulted on their car loans, Santander purchased those debts from CitiFinancial Auto and attempted to collect on them. Among the central questions the U.S. Supreme Court needed to address was whether a debt buyer, upon purchasing debts as Santander did, looks more like a “creditor” or more like a “debt collector.” The latter would be subject to the FDCPA in ways that a creditor would not. The case is Henson v. Santander Consumer USA, Inc . The U.S. Supreme Court, which reached a unanimous decision, determined that a company like Santander is allowed to collect debts that it purchased for itself without becoming a “debt collector” under the FDCPA. The decision may impact debtors negatively, and it is impor...

Back in October, we discussed how the U.S. Supreme Court had agreed to hear a case concerning debt collection companies that attempt to collect on old debt from consumers who have sought bankruptcy protection . In the case of Midland Funding v. Johnson , the Supreme Court will decide whether a debt collector can be punished for attempting to collect on old debt after the debtor has filed for personal bankruptcy . That case is now before the Supreme Court, and the justices have begun hearing arguments in the case. According to a recent article in Forbes , Justice Sonia Sotomayor’s reactions to arguments from Midland Funding make clear her position on companies like Midland Funding that buy old debts and later try to collect them. If Justice Sotomayor finds against Midland Funding, how will the Court ultimately rule? How do Justice Sotomayor’s reactions during oral arguments give us some potential clues into the Court’s thinking about the case? Sotomayor Questions Couns...

What happens when a creditor files a claim for a time-barred debt in a consumer bankruptcy case? Not too long ago, the U.S. Court of Appeals for the Eleventh Circuit ruled that such a filing violated the Fair Debt Collection Practices Act (FDCPA), in effect ruling in favor of the debtor. However, according to a recent article from Bloomberg BNA , the U.S. Court of Appeals for the Eighth Circuit has “split from other circuit courts” by holding that “a claim subject to a statute of limitations defense could be filed in the bankruptcy case without violating the FDCPA.” The case is Nelson v. Midland Credit Mgmt., Inc. , and it was decided on July 11, 2016. Why should Oak Park residents who are thinking about filing for personal bankruptcy pay attention to a case like this one? Implications of Cases Regarding Stale Claims in Bankruptcy What does this mean for debtors in Illinois? While bankruptcy cases from the Chicago area are not governed by either the Eleventh C...

According to a recent article in Reuters , the U.S. Supreme Court decided to decline hearing a claim concerning debt collection companies. This is good news for Chicago-area consumers who believe they may have been involved with debt collection companies in a manner that violated the Fair Debt Collection Practices Act (FDCPA). Why does the Supreme Court’s decision not to hear a case help consumers in the long run? In short, as the article clarifies, by declining to hear a debt collector’s claims, the Court has allowed a class-action lawsuit to continue. To better understand the implications of this case, we should take a closer look at the article and the issues considered by the U.S. Supreme Court. Class-Action Lawsuit Against Midland Funding and Midland Credit Management This case actually began in New York with a borrower “who objected to the 27 percent annual interest rate she was being charged,” according to the article. Although the case started in New Yo...

Do you know about recent Supreme Court cases that could impact our thinking about consumer bankruptcy ? A recent article from Bloomberg BNA reported on an event in which bankruptcy experts got together to consider the implications of five different U.S. Supreme Court decisions that deal with questions about bankruptcy in our country. The panel was co-sponsored by Bloomberg Law and the American College of Bankruptcy. The experts summarized the recent court decisions and their implications for future bankruptcy filings. To give you a better idea of the terrain when it comes to bankruptcy law in 2015, we would like to provide some of those summaries for you here. Take a look at a couple of the ways in which consumer bankruptcy law has been interpreted by the U.S. Supreme Court over the last year. Converting Chapter 13 to Chapter 7: Harris v. Viegelahn Back in June, we discussed the case of Harris v. Viegelahn , in which the Supreme Court had to decide whether money ...

If you file for Chapter 13 bankruptcy and later convert to Chapter 7 bankruptcy , what are some of the issues with which you’ll have to contend? According to a recent post from SCOTUSblog , the U.S. Supreme Court had to decide the following question: “When a debtor converts a bankruptcy proceeding from Chapter 13 to Chapter 7, what happens to funds that the trustee is holding at that moment, previously collected out of the debtor’s wages but not yet distributed to creditors?” In short, the Court came down in favor of the debtor. And that decision could have positive implications for consumers in the Chicago area who convert a bankruptcy proceeding from Chapter 13 to Chapter 7. But let’s take a look at the facts of the case and the Court’s reasoning to understand the impact of the case. Facts of the Case in Harris v. Viegelahn In Harris v. Viegelahn , the key issue involved the disposition of a debtor’s income after filing for bankruptcy. As a quick reminder, Chapt...