Oak Park Real Estate & Estate Planning Blog

In many different areas of the law, there is a rule known as the “180-day rule.” There is a 180-day rule in immigration law, as well as in criminal law in a number of jurisdictions. There is also a 180-day rule when it comes to U.S. bankruptcy law , and that is the rule we want to discuss with you today. In bankruptcy law, the 180-day rule applies to consumer bankruptcy cases when a debtor is expecting to receive an inheritance, a cash gift, or another payout during the bankruptcy process. The 180-day rule clarifies when that money will need to go into the bankruptcy estate and when the debtor will be able to keep the money. If you have questions about the 180-day rule, or if you are planning to file for bankruptcy but also know you will soon be receiving an inheritance or another type of cash gift, you should seek advice from an Oak Park bankruptcy attorney about how that money will affect your case. Understanding the 180-Day Rule In U.S. bankruptcy law, the 180-day rule says tha...

A recent Illinois debt collection case concerning a debtor’s privacy resulted in a ruling for the debt collector. That case, Brewer v. The Law Offices of Mitchell D. Blum & Associates (2021), centered around a debt collector revealing a portion of a debtor’s account number in a mailing. The debtor argued that the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by revealing private information about the debtor. A judge for the United States District Court in the Northern District of Illinois disagreed. Our Oak Park consumer protection lawyers want to tell you more about the case. Facts of Brewer In the recent case, the plaintiff, Tyrone Brewer, filed a claim against debt collectors who “sent him a debt collection letter with part of his account number showing through the envelope’s glassine address window.” According to Brewer, revealing the portion of his account number in the mailing violated the FDCPA. The plaintiff cited a specific portion of the FDC...

If you recently received an inheritance, or if you know you may be receiving an inheritance soon, you should know that it may impact your Chapter 13 bankruptcy case . Yet the way an inheritance will affect a Chapter 13 bankruptcy case is much different than how it will affect a Chapter 7 bankruptcy case. In Chapter 7 cases, courts need to know about all assets to properly classify them as exempt or non-exempt, and non-exempt assets will be liquidated in order to repay creditors and to discharge debts. In Chapter 13 cases, assets also must be properly classified as exempt or non-exempt, but assets are not liquidated. Instead, whether or not assets are exempt will affect the debtor’s Chapter 13 debt reorganization and the repayment plan. Given the ways in which exempt and non-exempt assets are relevant to a Chapter 13 bankruptcy case, you may not be surprised to learn that an inheritance will not be distributed immediately to creditors the way it would in a Chapter 7 case. Instead, an i...

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 owe a significant amount of debt and a portion of that debt includes federal student loans, you may be able to more easily have that debt discharged by filing for personal bankruptcy . According to a recent article in The Washington Post , a student financial aid point person for the U.S. Department of Education informed Congress “that the agency is working with the Justice Department to revise its bankruptcy policy for federal student loans.” This could mean that debtors who are struggling largely with student loan debt may soon be able to avoid the complicated process of seeking to have that debt discharged in bankruptcy even if there is not an overhaul of U.S. bankruptcy law. Changing the Approach to Student Loan Debt According to Richard Cordray, the current chief operating officer of the Office of Federal Student Aid, the current process for seeking a discharge of student loan debt in bankruptcy “doesn’t work well” and “needs to be reformed.” Speaking before a House educa...

In both Chapter 7 bankruptcy and Chapter 13 bankruptcy cases, the debtor will be required to disclose information about all assets and income to determine eligibility for bankruptcy as well as to determine the course of the bankruptcy case. While assets are treated differently in Chapter 7 and Chapter 13 bankruptcy cases, receiving an inheritance can significantly affect both types of bankruptcy cases. Today, our Oak Park bankruptcy attorneys can explain in more detail how inheritances are handled in Chapter 7 bankruptcy cases. Chapter 7 Bankruptcy and Inheritances First, we want to discuss how inheritances will be treated in Chapter 7 bankruptcy cases. It will be extremely important to know when you become entitled to the inheritance, and whether that occurs before, during, or after your bankruptcy filing. If you find out that you will be entitled to receive the inheritance before you actually file for Chapter 7 bankruptcy, you will need to determine whether the inheritance can be...

If you are planning to file for Chapter 7 bankruptcy , you want to be certain that all—or at least the majority of—the major debts you owe will be discharged in your bankruptcy case. Accordingly, you might be wondering: will Chapter 7 bankruptcy erase all of the debt I owe? To confirm an answer to this question, it is critical to discuss the particular facts of your case with an Oak Park consumer bankruptcy lawyer who can help. Bankruptcy laws in the U.S. are extremely complicated, and there are some types of debt that are not dischargeable. As such, it is important to have an experienced attorney assess your situation before you move forward with your bankruptcy case. The good news is that most consumer debts are dischargeable in a Chapter 7 bankruptcy case, which means that you may indeed be able to erase all of the debt you owe. Yet some types of debt are not dischargeable, and there are some situations in which debt ultimately cannot be discharged even if the type of debt is dis...