Archives for February 2015

It’s Difficult To Borrow Your Way Out Of Debt

About 10 to 20 years ago, I would see the same typical creditors in a bankruptcy case. I would likely see credit card debt, outstanding medical bills, parking tickets, tax debt, and an occasional unsecured, personal loan. These are the majority of creditors that made up bankruptcy cases 10 to 20 years ago. My how things have changed. Yes, all of the above listed creditors still exist and still dominate the bankruptcy schedules. However, there is a new crop of creditors who have arrived on the scene and in full force. The examples in the paragraph above are basically extensions of credit. The new crop of creditors are extensions of credit but not to buy something. They are extensions of + Read More

The Bankruptcy Payment Plan

Most people thinking about filing for bankruptcy are understandably concerned about paying for the service. They wonder how in the world they going to pay the attorney’s fees and the court costs in an effort to get out of debt. After all, they have very little available per month after they are paying all of their necessary bills. The good news is that most attorneys will offer some form of payment plan and provide a debtor with an opportunity to get some relief. Let me explain the traditional format. The traditional format is where a client makes payments over time to a bankruptcy attorney who then files the case officially with the bankruptcy clerk once those fees are paid in full. + Read More

Income Tax Refund At Risk When Filing Chapter 7 Bankruptcy

When you file a chapter 7 bankruptcy, you are basically telling creditors that you have no significant assets from which to pay them. To prove this, on your bankruptcy petition you must list all of your property of every nature. You are then allowed to protect or exempt a specific amount of property depending upon which state you live in. Each state has a different dollar amount that can be protected. In the state of Illinois, the amount that you can protect is much less than most other states. Tax Refund Is Personal Property Now you might not think that your income tax refund is personal property. But I guarantee you that your chapter 7 trustee will view it as personal property. For this + Read More

Do You Really Need A Bankruptcy Discharge Under Chapter 13?

I recently had a client who was reorganizing student loan debt over a five-year period. He was willing to pay back 10% of the student loans knowing full well that the other 90% would be due and owing plus interest after his bankruptcy case was over. He did have some minor credit card debt and minor medical bills that were also going to be paying back 10%. When it turns out, at the end of his bankruptcy, he receives a letter from his trustee indicating that he needs to take a two hour financial management class in order to obtain a discharge. He then contacts my office to determine whether or not he should take the class or not. The answer may surprise you.  Solution: Chapter 13 + Read More

When Is It Smart To File Bankruptcy Preemptively?

Most people do not wish to file for bankruptcy. They know there's a psychological aspect. They know there's a monetary fee. They know that there is a process. In fact, most clients wind up filing for bankruptcy after some catastrophic event triggers the necessity to file. Wouldn't it be wise if on certain occasions people filed bankruptcy preemptively before such a catastrophic event. Let me give you a few examples of where this would be wise. Bankruptcy & Outstanding Tickets 1) If you have tickets with the city of Chicago and you know that you are approaching the number required to make the boot list, then filing bankruptcy preemptively would be wise. By doing so, you can avoid the + Read More