This is the chapter 7 bankruptcy case study for Ms. G., who resides in Chicago, Illinois. We are here to examine whether or not Ms. G. can qualify and benefit from a chapter 7 bankruptcy filing. Let's examine the facts of her case: she is currently residing in Chicago and she is renting. Her rental arrangement is month-to-month and her landlord lives in the very same building. She owns a 2007 Dodge Nitro which is financed by Honor Finance. The monthly payment on the vehicle is $342, her outstanding balance is $6,090 and she is current on the payment and would like to keep it. She also has a second vehicle, a 2004 Ford Explorer which is paid in full. We value that vehicle at approximately + Click Here For Read More

Your bankruptcy case should never close without a discharge. To prevent this from happening, you must complete a two hour financial management course at some time after your case is filed and prior to discharge. This gives you a window of approximately three months to complete the financial management course. If you fail to do so, your case will close without a discharge. At that point, creditors are free to pursue collection efforts against you until such time that you bring a motion to reopen the case, to allow for the filing of a financial management certificate and subsequent case closing. This motion to reopen is accompanied by a filing fee of $260 as well as a typical attorney fee + Click Here For Read More

Tax Refunds Time It's that time of year again. This is the time when many debtors look forward to receiving their federal and state income tax refunds. Debtors rely on these refunds all year long to get them through this period of time. Throw in the bankruptcy wrinkle. A debtor who is struggling financially seeks the protection of the bankruptcy court only to realize that the tax refund is potentially at risk. This is true in both the chapter 7 and the chapter 13 bankruptcy case situations. Chapter 7 & Your Refund Let's examine the chapter 7 scenario. Under Illinois exemption laws which apply to a chapter 7 bankruptcy case, an individual is allowed to protect up to $4000 worth of + Click Here For Read More

In most chapter 13 bankruptcy cases, upon confirmation, a monthly payment is set in place and it will not vary. However, there is always an exception to this rule. In some circumstances, the debtor can bring a motion to modify the plan such as a case where there is a significant decrease in income. Well what is good for the goose is good for the gander. Thus, the Chapter 13 trustee has the ability to bring a motion to increase the plan payment should there be a significant increase in income. This is provided for under section 1329 of the United States Bankruptcy Code which is entitled “modification of plan after confirmation.” One of my recent debtors just incurred this event. In our + Click Here For Read More

Not every married couple files a joint chapter 13 bankruptcy case. However, the income and expenses of the non-filing party is critical in determining how much the filer has to pay per month to a Chapter 13 trustee and for how long. This relatively new concept stems back to the bankruptcy reform of October 17, 2005. Prior to that date, a person filing for Chapter 13 bankruptcy was only required to submit his or her income and expenses as well as all of the debts. After the law change, the non-filing spouse or the total household income of the parties became the standard by which chapter 13 cases were governed. Let's take a look at a recent example: A woman came in the office recently + Click Here For Read More

When a chapter 13 case is up for confirmation, the court, the trustee and the debtor must comply with section 1129 of 11 U.S.C.  This section deals with confirmation of a plan and it lists all the different factors that must be complied with for the court to sign an order confirming the plan. Most debtors and their counsel are aware of the requirements for filing a Chapter 13 in general. Those include completing a credit counseling session prior to filing, submitting the most recent four years of federal tax returns to the trustee, providing the most recent two months prior to filing of pay advices and any subsequent amendments or documentation that the trustee requires post-filing. What is + Click Here For Read More

When Chapter 13 Makes Sense There are certain circumstances where chapter 13 makes perfect sense even though there may not be a lot of debt being repaid. A perfect example of this would be if a person's driver's license is suspended due to failure to pay parking tickets to the City of Chicago. Let's say this person needs that vehicle to get to and from work. If the debtor's license is suspended, chapter 13 is going to be the only option to regain driving privileges other than working into an installment payment plan with the City of Chicago. Often times, the city will not be amenable to a payment plan and the debtor is forced to either borrow a significant sum of money from family and + Click Here For Read More

Chance For Dismissal This is a question that comes up on nearly every chapter 13 bankruptcy case that is filed. It is almost impossible to make it through the chapter 13 filing process without some sort of difficulty. The difficulty might stem from the trustee, a creditor, the regulations, or the debtor himself. There are certain situations where a case cannot be confirmed by the trustee because the debtor has not satisfied the requirements of a confirmable plan. This could be based on the debtor's inability to substantiate specific expenses, provide documentation for certain debts, or from the debtor's inability to comply with the law. A debtor often will find motions to dismiss filed by + Click Here For Read More

Invest Wisely I have to share with you a cautionary tale of a prior client who had an investment in a real estate property on the South side of Chicago. The neighborhood in which he invested was not great.  In fact, it's one of the two or three neighborhoods in Chicago that has not seen any form of significant re-gentrification. He purchased the property which had a single family home on it with the intent of renting it out and receiving passive income. When he was unable to do so effectively, he decided to include it in his chapter 7 bankruptcy along with other debts that he wished to eliminate. The underlying debt to the mortgage company was eliminated. However, my former client still + Click Here For Read More

It's amazing to me that people are worried about getting credit before they even completed a bankruptcy case. This is due in fact based upon Americans desire and obsession for credit. After all, credit is what more than likely got the person into financial problems to begin with. Now there are other causes of bankruptcy filings such as medical bills, job loss, illness, divorce, but the main reason why people fall into bankruptcy is due to credit. Credit Score It seems that everyone is obsessed with credit and their credit scores. People want to know how is bankruptcy going to affect my credit score? I have to look at these potential clients in bewilderment. Why on earth are they asking me + Click Here For Read More