Archives for 2013

It Seems Everyone Wants A Chapter7

A recent potential client called the office and wanted to get started with a filing.  At the meeting, we talked about a greater likelihood of Chapter 13 based upon the income of the debtor and his spouse.  Today, the talk came up about Chapter7 once again.  Here is what I do in these situations: I will start the document preparation out as a Chapter7.  I will put the client through the means test if necessary to determine if Chapter7 will work.  If not, I will contact the client and advise as to why Chapter7 is not going to work.  In the Northern District of Illinois, the Trustee’s office is very good about reviewing the cases for abuse.  If the Trustee’s office feels that the person + Read More

Bankruptcy – The Obsession With Credit Before Filing

Oftentimes, when someone comes to see me for bankruptcy advice, they are already thinking beyond the process and into regaining credit.  The trouble with this line of thinking is serious.  Firstly, the client should be mostly concerned with getting out of debt.  After all, the excessive debt is the reason for the consultation in the first place.  Secondly, the client should be thinking about taking corrective action to ensure that bankruptcy does not appear in the future.  Lastly, the client should think about rebuilding credit whether or not they are going to actively seek to use credit in the future. A typical client will tell me that they have great credit or once had great credit.  + Read More

Three Big Questions About Chapter 13 Bankruptcy

Can I keep my car in Chapter 13 Bankruptcy? Yes, you can keep your car through Chapter 13.  If your car is paid in full, it will just increase the amount that you have to pay back to your creditors based on the equity in your car.  If you have a car that’s worth $10,000, you’re going to have to pay back at least $10,000 worth of your debt which will increase your plan payment but you will be able to keep your car.  Conversely, if you are behind on your car and it’s either in danger of being repossessed or already being repossessed, you can file a Chapter 13 bankruptcy and pay for your car through the bankruptcy. There are major benefits to paying for a car through a Chapter 13 + Read More

What People Want To Know Most About Chapter 13 Bankruptcy

What is a Chapter 13 bankruptcy?  A Chapter 13 bankruptcy is a reorganization of your debt or a repayment plan through the federal government of anywhere from 3 to 5 years.  Chapter 13 bankruptcy is a very complicated process; much more complicated than Chapter 7 so an attorney is definitely something you should acquire before filing Chapter 13.  Chapter 13’s can be looked at as credit consolidation through the federal government where you put all your debt into one pot; you make one monthly payment to a trustee and the trustee repays your creditors based on the priority set up in the Bankruptcy Code.   Good reasons to file Chapter 13 are if you have fallen behind on your home and + Read More

Can I stop creditors from calling me? – Bankruptcy

You most certainly can stop bill collectors from calling you once you hire an attorney to handle your debt situation.  Under the Fair Debt Collection Practices Act, creditors are prohibited from contacting you once they are made aware of the fact that you have representation.  If creditors violate this Act, they can be sued in Federal or State court with attorney’s fees, actual damages and sometimes punitive damages awarded to the Plaintiff.  Two Basic Ways To Notify Creditors There are two ways to notify creditors about the fact that you have representation.  First, you can simply advise them when they call you on the phone that you are filing for bankruptcy, give them your attorney’s + Read More

Will I lose my house in Chapter 13 Bankruptcy?

The honest answer is it depends.  You will certainly have the ability to keep your home provided that you make timely payments.  Allow me to explain.  One of the main benefits of filing Chapter 13 or the main reason why people file Chapter 13 is in order to save their real estate and other property.  Property can be saved through Chapter 13 by putting everything you are behind on the mortgage, something called mortgage arrears, into your bankruptcy plan and paying that back over a three to five year period.  You can also put property taxes and the like into your bankruptcy plan in order to repay those debts through your bankruptcy.  The total that you are behind on your mortgage needs to be + Read More

Anything I should NOT do if I’m filing for bankruptcy?

There are several things that you should not do if you are considering filing for bankruptcy under either Chapter 7 or Chapter 13.  One of the things that people do which is a prohibited act is repaying a family member or a friend within a year of filing for bankruptcy.  This is known as a preferential payment and the court can undo that type of payment or repayment.  Your family member may be required under court order to turn over those funds to a Trustee who will then administer the asset for the benefit of creditors.  Leave Your 401(k) Alone The other thing people do is they borrow from their 401(k) in an effort to repay their creditors only to find that they did not have enough money + Read More

Chapter 13 Bankruptcy Can Help In Many Ways

Chapter 13 bankruptcy can help you in a ton of ways if you are struggling financially.  The first way that Chapter 13 can help you is to save your house.  If you have fallen behind on your mortgage payments because of the loss of job or illness or just unexpected expenses, you can put what you are behind on your mortgage (the arrears) into your bankruptcy reorganization plan; that way you can pay the amount that you fell behind over 3 to 5 year period and resume making the regular mortgage payment.  If you fall behind on your property taxes, you can pay those property taxes through Chapter 13 bankruptcy as well.  Reorganizing Your Financed Vehicle If you fall behind on your financed car, + Read More

Information About Debtor’s 341 Meeting of Creditors – Bankruptcy

A creditors’ meeting is required under section 341 of the Bankruptcy Code.  In simple terms, it is a meeting of the minds between the parties present at the meeting.  The parties that will be present at the meeting will be you, the debtor; the debtor’s attorney, and a representative from the trustee’s office.  If you are in Chicago, Cook County, the trustee will be either Marilyn Marshall or Tom Vaughn.  If you are in Lake County or DuPage County or Will County, then  Glenn Stearns will be your trustee. The creditors’ meeting is nothing to be scared about.  As long as you are upfront and honest with your attorney when you originally met with him, the creditors meeting should be no + Read More

Is there anything I should NOT do if I’m thinking of filing for bankruptcy?

There are several things that you should not do if you are considering filing for bankruptcy under either Chapter 7 or Chapter 13.  One of the things that people do which is a prohibited act is repaying a family member or a friend within a year of filing for bankruptcy.  This is known as a preferential payment and the court can undo that type of payment or repayment. The other thing people do is they borrow from their 401(k) in an effort to repay their creditors only to find that they did not have enough money in their 401(k) to repay all of their creditors and now they have exhausted all of their retirement.  The retirement accounts would have been protected in either a Chapter 13 or a + Read More

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