Archives for January 2013

What Property Will I Lose When I File For Bankruptcy

Chapter 7 bankruptcy allows for a fresh start.  It also allows for you to keep a certain amount of property known as exempt property free and clear from creditors and from the long arm of the trustee.  In terms of real estate, you can protect up to $15,000 worth of equity.  In the case of a joint case, husband and wife, you can protect up to $30,000 worth of equity in a piece of real estate. In terms of other property, there is a $2400 auto exemption and a $4000 miscellaneous personal property exemption that can be sprinkled over any type of personal property.  When you have a joint case, the exemptions are doubled.  So when you ask am I going to lose my property whether it be a house or + Read More

Bankruptcy – I Share a Bank Account, Is That Money At Risk?

Well, all of your assets must be listed on a bankruptcy petition and this is true under chapter 7 or under chapter 13.  If you are joint on a bank account, that basically means that you and the other party on the account both have equal rights to that money.  If the sum is in excess of the state exemption amounts, then a portion of that fund or account may be touchable or attachable by the trustee in order to administer it for the benefit of creditors. Now, in a chapter 13 bankruptcy case, your property is completely protected so it wouldn’t matter if you had a joint account that had nonexempt equity.  In a 13, you simply must pay back at least as much as creditors would get in a chapter + Read More

Foreclosure -Can I lose my house if I am behind on my second mortgage?

If you are behind on your second mortgage, you technically can be foreclosed upon by that second mortgage and eventually lose the home.  The second mortgage might not be the one who gets paid or made whole but they can push the issue and actually do the bidding for the first mortgage company in a foreclosure action.  My advice to consumers and those that are going through bankruptcy is to maintain current payments on both the first and second mortgage holders.  If you fail to make either the first or the second mortgage payment, then either one of those vendors can institute a foreclosure action if you fall far enough behind. In some cases, you can fail to make the second mortgage payment + Read More

Chapter 13 Is Possible With Extra Income

This is the case of Carla Salerno from Chicago, Illinois who is interested in filing for bankruptcy.  Ms. Salerno does not own any real estate.  She is currently renting from a landlord at the same address as her but on the second floor.  It is a month-to-month lease.  She does not own a vehicle.  She is not paying for a vehicle.  She is not using anybody’s vehicle. She has a checking account at Citibank.  She has no savings account.  She has $560 on account with her landlord as a security deposit.  She has minor household goods worth approximately $400 and normal clothing worth approximately $400.  She has no IRA, 401(k), profit sharing or other retirement account.  She does not expect + Read More

Bankruptcy Case Study For Jose Manual Verones – Debt

This is the case of José Manuel Verones who comes to me with Wauconda, Illinois seeking debt relief.  Mr. Verones is not a homeowner and he currently lives with his parents so he doesn’t have a formal lease.  He’s got a 2000 Chevy Malibu which is worth $2000 and it is paid for. He has a checking account worth $500.  No savings account.  No household goods, very little in the way of clothing.  He does have $5000 in a 401(k) and he gets a tax refund each year of approximately $600.  He is single with no dependent children.  He has been working for the last three months as an inside salesperson, earning approximately $24,000 per year.  At the end of the month from his paycheck, he nets $1655 + Read More

Can I Put Condo Associations Fees In A Bankruptcy

The simple answer is yes, the condo associations can be put in a Chapter 13 bankruptcy and be repaid over a 3 to 5 year period.  Much like a mortgage that you fell behind on, the condo association is a secured debt, secured by your property that you need to pay in order to keep that property or in order to keep the right to possess that property.  By filing a Chapter 13, you can take the amount that you owe to your condo association and propose to repay that amount over a 3 to 5 year period.  Now, the catch is that you must continue to make your regular condo Association payment going forward after your case is filed.  Simply reorganizing the part you fell behind and failing to make the + Read More

How does a Chapter13 Bankruptcy plan actually work?

A Chapter13 plan is a very complicated mathematical computation which is why you should always have an attorney when filing Chapter 13.  A Chapter13 plan is determined by three factors, your income, your expenses and your assets.  The court only will approve a Chapter13 bankruptcy if you can afford it which is why it’s such a powerful tool.  For instance, if you bring in $1000 a month in income and have $800 a month in expenses, the court won’t approve a Chapter13 repayment plan of over $200 a month.  This is good for some people and bad for others because your Chapter13 plan has to be something called feasible.  You have to show that you’re able to make the payments.  For instance, if you + Read More

Bankruptcy Case Study For Dante Shorr

This is the case of Dante Shorr who comes to me from North Chicago, Illinois seeking information on bankruptcy.  Mr. Shorr has never filed for bankruptcy before.  He is not a homeowner and he has currently living with family.  He has a paid off vehicle which is a 1985 Lincoln Town Car which is worth approximately $2000 so it’s covered under his Illinois exemption amount. In terms of personal property, he has minor household goods worth approximately $1000 and normal clothing worth approximately $300.  He does receive an annual tax refund of approximately $1200 per year.  He is single and he has no dependent children.  He is currently working as a janitor earning approximately $25,000 per + Read More

Can my tax debt be eliminated in bankruptcy?

Taxes can be eliminated in certain circumstances and in certain circumstances your attorney will be able to advise you.  For example, if you have tax debt that is more than three years old and if you filed a return for those years and if you did not commit any type of fraud, then the debt can be eliminated in a Chapter 7 bankruptcy.  The three-year rule is important because if you applied for and received an extension, you have to wait out three years from the date the tax was due plus any extension.  There are also additional rules and regulations that pertain to tax debt which are very complicated so I want to keep it simple here. If you have tax debt that is more than three years old + Read More

Can I put my student loans in my bankruptcy filing?

Chapter 7 bankruptcy, known as the fresh start bankruptcy, is a way to get out of debt.  However, student loans are not eliminated under a Chapter 7 except in extreme hardship cases.  In my experience, an extreme hardship case is almost impossible to find.  You must be in a position where you can no longer make the payment, you no longer have the ability to make the payment and it is causing an extreme hardship on your ability to survive.  In all the cases that I have seen in the 21 years of practice, there has not been one that has met this standard.  If, in fact, the client does not have the ability to repay a student loan based on their inability to work, then basically the collection + Read More

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