Chicago Bankruptcy Blog

You'd better list all debts in your bankruptcy case......

noreply@blogger.com (Terry) — Thu, 24 Sep 2009 14:20:00 +0000

A recent 7th Circuit Case In re: Smith, No. 08-3358 (9/23/09). Appeal, N.D. Ill., E. Div. Affirmed ruled that is was permissible to let 2 civil action cases continue in state court (regarding sexual assault against debtor-physician) because the debtor did not list the debt on Schedule F of the bankruptcy petition. The creditors did not get notice until the debtor tried to transfer the case to the state court bankruptcy calander about 2 weeks before the objection to dischargeability deadline in the bankruptcy case. The instant request was deemed proper because the creditors lacked timely notice of the bankruptcy filing, and the motion to transfer the cases to state court bankruptcy calendar did not give the creditor sufficient notice of the deadline to file an adversary objection in the bankruptcy case.

Fixing those pesky problems on your credit report

noreply@blogger.com (Terry) — Tue, 01 Sep 2009 20:22:00 +0000

Here is a frequent statement I hear from my bankruptcy clients when they review their bankruptcy petition before filing:

"That debt isn't mine."
I usually reply: "But it is on your credit report"

I have heard, that over 60% of all credit reports have errors on them.
Some may be as small as an incorrect spelling of a name, or an incorrect address, however, it could be someone else's information, such as a wrong social security number, or worse....someone may have stolen yours and is running up debt in your good name!

Who's job is it to make sure that the information is correct? You guessed it, yours. Bad credit can take years to repair, so don't take this for granted. You should check your credit report each year. The government gives everyone a free copy of their credit report each year, from all 3 of the credit bureaus. This can be found at http://www.annualcreditreport.com

Also, if you have errors on your report, you need to report them right away. At the Federal Trade Commission, they have set out guidelines and instructions to correct these mistakes. Click here to review how to correct your credit report. Here is where you can dispute the credit report errors. The 3 bureaus will investigate, and will respond to you usually within about 30 days. If they do correct errors, they will give you a copy of your cleaned report for free.

Do not wait. If you are trying to get a car loan, or buy a home, every point on your credit report can help you get a better, more affordable loan. Errors can cause your interest rates to be higher, or even disqualify you for the loan altogether!

As always, you can contact me with any questions, especially if you want to know how it will impact your bankruptcy case

Schaumburg Illinois bankruptcy attorney

noreply@blogger.com (Terry) — Wed, 03 Jun 2009 20:53:00 +0000

We are pleased to announce the opening of our new suburban office location.

Our new office is located in Schaumburg, Illinois.

1821 Walden Office Square #400, Schaumburg, Illinois 60173

Click for : Map and driving directions

This office is by appointment only, with office hours on Saturdays from 9am to 12pm.
We handle bankruptcy cases, divorce cases, real estate closings, and personal injuries.

Contact us now to schedule a free consultation.
Leeders & Associates, Ltd. 312-427-7400

Car repossessed prior to chapter 13

noreply@blogger.com (Terry) — Thu, 28 May 2009 16:50:00 +0000

Here is a recent decision involving a case where a vehicle was repossessed prior to a chapter 13 bankruptcy. With Chapter 13 filings, the creditor must return vehicle to debtor, otherwise it is a violation of the automatic stay provisions. Now, a bankruptcy must be filed within 21 days of the repossession or the vehicle is sold at auction, and then it would be too late. But here, the Court, on appeal, ordered that the debtor's motion for sanctions should be granted for failure to give the vehicle back timely.

7th Circuit Cases
Civil - Bankruptcy
Thompson v. General Motors Acceptance Corp., LLC, No. 08-2077 (5/27/09). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Ct. erred in denying debtor's motion for sanctions based on creditor's retention of debtor's vehicle, which had been seized prior to debtor's filing Chapter 13 bankruptcy petition. Debtor had equity interest in seized vehicle, and creditor's refusal to return seized vehicle prior to debtor establishing ability to provide adequate protection of creditor's interest in said vehicle violated Bankruptcy Code's stay put provisions. As such, creditor was required to immediately return seized vehicle to debtor's estate upon debtor filing Chapter 13 bankruptcy petition and then seek protection from Bankruptcy Court.

7th Circuit case on the Automatic stay.

noreply@blogger.com (Terry) — Fri, 24 Apr 2009 19:28:00 +0000

In re: Radcliffe, No. 08-2885 (4/23/09).
Appeal, N.D. Ind., Hammond Div. Affirmed.

District Court did not err in granting debtor's motion to enforce automatic stay provisions of bankruptcy code where creditor-pension fund announced to debtor that it would pay debtor his pension benefits, but would withhold said benefits and apply them to existing debt that arose when debtor failed to make required pension contributions to pension fund on behalf of his employees. Pension fund's unilateral decision to apply pension benefits to existing debt violated automatic stay provisions of section 362 of bankruptcy code. Moreover, pension fund could not apply pension benefits to existing debt due to anti-alienation provisions of ERISA.

This is important to emphasize the power of the automatic stay. It goes beyond just stopping phone calls and collection action. Here, the pension board decided the debtor lost his pension privileges and tried to pay back debt instead of pay the debtor. The court ruled that this is a violation of the automatic stay. I agree. They do not have the right to pay creditors with the debtors funds which were exempt in the bankruptcy estate.

Obama's Mortgage relief plan

noreply@blogger.com (Terry) — Wed, 18 Feb 2009 18:08:00 +0000

Barack Obama laid out his plan of attack to help solve or lessen the impact of the mortgage/real estate crisis that has haunted millions of homeowners. It is a $75 billion multi-pronged attack. It will help make it easier to afford their monthly mortgage payments, allowing refinancing while the interest rates are more favorable, or by easing the process to have mortgage loans modified. Obama is widening the scope of government involvement, bringing into the mix those homeowners who have struggled, but have remained current on their mortgage payments, but at risk of default. He seeks to make Federal funds available to loan providers to modify the loans of those who have stopped paying them as well, up to $1000 for each loan modification, and $1000 a year for 3 years if the homeowner stays current. For those who are current, but have riskly loans or high likelyhood of falling behind, the proposal will give $500 to servicers and $1,500 to mortgage holders if they modify at-risk loans before the borrower falls behind.

Also mentioned in this relief package is the willingness to work with Congress who is currently working to amend the bankruptcy laws, which will allow judges to modify mortgages, like all other secured debts in chapter 13. However, they are drawing criticism from the lenders, since this is a major change, and could cost these lenders billions. Stay Tuned

Obama to lay out mortgage relief plan thru Chapter 13 bankruptcy

noreply@blogger.com (Terry) — Tue, 17 Feb 2009 21:08:00 +0000

President Obama is expected to lay out his strategy this Wednesday to help curb home foreclosures through Chapter 13 loan modifications. He is slated to address this and other factors of the housing crisis that sparked the financial sector meltdown.

Rent - past due and future amounts due

noreply@blogger.com (Terry) — Wed, 28 Jan 2009 22:18:00 +0000

Subject: chicago bankruptcy attorney, law suit, future rent

Question: Hi Terry, Thank you for this service. I'll try to make my questions short. I owned a business, went out of business, and could not pay my rent on commercial lease. I signed lease as sole proprietor and was sued by landlord. I have been found guilty of breaching lease and ordered to pay past 9 months rent plus lawyer fees. The lease is for five years. The amount of time I was in business plus the 9 months out of business has been just 2 years and 5 months. I have already lost over 75,000.00 with the business and have no means at this point to come up with additional money owed. Now for 2 questions. Can I file bankruptcy and be discharged of this debt after going to court? If I can file bankruptcy, can the landlord come back and sue me again for the remaining months owed or can the bankruptcy absolve me from all relations with the landlord?

Answer: This debt can be included in a personal bankruptcy, and would discharge any past or future amounts that would be due, eliminating it completely. The landlord can not come back and sue you for rent.

cosigner and vehicle payments in bankruptcy

noreply@blogger.com (Terry) — Wed, 28 Jan 2009 22:14:00 +0000

There is often some confusion with cosigned vehicles and a bankruptcy filing.
One questioner asked me : "my ex if filing for bankruptcy and he is the co signer on my car and he wants to add that in to the bankruptcy. will they repo my car or how can i protect myself from getting my car taken if he adds it?????"

Answer: If you are current and maintain the payments and insurance, you should be fine and can keep the vehicle when a cosigner surrenders their interest in the vehicle.

In other cases, where you would be the debtor in the bankruptcy, and are cosigned on someone else's car, you can walk away from the debt, discharging it, leaving the payments to the cosigner.

Alternatively, if the vehicle is yours, and you file bankruptcy, you can continue to make payments on the vehicle and reaffirm the debt, thereby protecting your cosigner. Remember, a cosigner is always liable for the debt, regardless of who has the asset.

debt relief agencies

noreply@blogger.com (Terry) — Tue, 13 Jan 2009 20:13:00 +0000

The first federal appeals court has struck down a provision of BAPCPA that limits what lawyers may say to their clients who are contemplating bankruptcy.

In the case of Milavetz v. U.S., the 8th U.S. Circuit Court of Appeals at St. Louis invalidated a section of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which prohibited “debt relief agencies”from advising their clients to incur more debt in anticipation of filing bankruptcy. This provision also includes lawyers.

Judge Lavenski R. Smith called that section 526(a)(4) “unconstitutionally overbroad” thus violating the the First Amendment -free speech. This conflicts with the attorneys duties to provide full and proper advice to their respective clients. For a thorough analysis of this story, please read the article, "A Debt-Defying Act" in the ABA Journal.

Homestead exemption caselaw

noreply@blogger.com (Terry) — Tue, 13 Jan 2009 20:08:00 +0000

7th Circuit Case
In re: Belcher, No. 07-2174 (12/31/08). Appeal, S.D. Ill. Rev'd.
Dist. Ct. erred in finding that bankrupt debtor was eligible for homestead exemption under 735 ILCS 5/12-901 even though said debtor was not named on title of marital home shared by spouse, who was titleholder to said home and who had also filed for bankruptcy. Under Ill. caselaw, debtor must have formalized property interest to claim homestead exemption. In Illinois, the homestead exemption in bankruptcy is $15,000 per owner of the home, so $30,000 for a joint filing case if both spouses own the home.

Better Business Bureau Tips

noreply@blogger.com (Terry) — Tue, 06 Jan 2009 15:42:00 +0000

As a member of the Better Business Bureau, I occasionally get tips from them.
Today, I received a list of the top ten scams from 2008.

Among them, #3 was Mortgage foreclosure scams, and right behind at #4 was Illegitimate credit repair & debt negotiation services. These both have an impact on my clients, before and after they meet with me.

Here is a link to the full article by the BBB.

The better business bureau advises:

3. Mortgage foreclosure rescue scams - Due to foreclosure information being publicly available, many scammers contact desperate home owners and promise to save their home. They will claim to know investors or a "loop-hole", or will claim to be able to bypass the involvement of attorneys or other agents, thereby leaving the consumer in a complex and vulnerable situation. Victims of foreclosure rescue scams are asked to pay upfront funds or provide sensitive personal information. On many occasions the scammer will rob unknowing consumers of their money and do nothing for them in return, while in other cases the consumer may unknowingly sign away their property deed entirely, on pretense that "they'll be able to buy it back later."

Once the scam artist has the consumer's property deed, they are in a position to raise the consumer's rent so high that the consumer will not be able to afford to make the payments, and may wind up being evicted from their own home. The BBB strongly advises anyone going through foreclosure to thoroughly research any businesses they are dealing with. It is a good idea to contact the Department of Consumer Services to get more information on whom to go to for help.

4. Illegitimate credit repair & debt negotiation services - Due to the troubling economic situation, many consumers seek out credit repair or debt settlement companies- here is what you need to know about them and how to determine their legitimacy.

These services can not ask for money in advance.
They can not automatically get legitimate negative reports off your credit report.
Be extremely cautious about a service that recommends you not pay creditors so it can negotiate. This could negatively affect your credit report.
A service should never guarantee they can cut your debt by a specific percentage.

1) It is against federal law -- the Credit Repair Organizations Act -- for any credit repair company to charge you in advance for their services. The only time they can ask for payment is after all of the services they were to do for you are completed; whether this takes 3 weeks or 10 months. 2) A credit repair company cannot tell you that they can get negative (but legitimate) items off of your credit report. The main aspect of credit repair organizations' work is writing to the credit reporting agencies to dispute the items on your report by asking for their validation. If the items on your report are real, such as liens, bankruptcies, etc, the credit reporting agencies will not have a problem validating them. Also, keep in mind that disputing items on your credit report is something you can do by yourself, for free- you can easily find the appropriate dispute letter templates on the internet. 3) Many debt settlement or negotiation companies request that you don't pay your creditors and wait until you are behind in payments so that they can contact your creditors and attempt to negotiate to have your debt reduced in exchange for making a payment on the spot. While some creditors may agree to this to get at least partial payment, your credit rating will suffer, your interest rates may go up, and you may have trouble obtaining future loans or financing. 4) Debt settlement or debt negotiation companies should not guarantee that by enrolling in their services, they can cut your debt by any specific percentage, such as "40-60%".

7th Circuit bankruptcy law case

noreply@blogger.com (Terry) — Thu, 18 Dec 2008 16:10:00 +0000

This is good news for debtors. Debtors are allowed to take the standard ownership deduction on the means test calculation for vehicles that are paid in full.

7th Circuit Cases
Civil - Bankruptcy
Ross-Tousey v. Neary, No. 07-2503 (12/17/08). Appeal, E.D. Wisc. Rev'd and rem'd.
Dist. Ct. erred in finding in Chapter 7 bankruptcy proceedings that debtors who owned cars outright could not take Local Standard transportation ownership deduction for purposes of calculating means test under sec. 707(b)(2)(A)(ii)(I) when determining under Bankruptcy Abuse Prevention and Consumer Protection Act whether debtors must repay portion of their debt or whether debtors were entitled to complete discharge of debt. Debtors are entitled to said deduction, but remand was required to determine whether under totality of circumstances, debtors' financial situation demonstrated abuse under section 707(b)(30(B).

Bankruptcy Attorney offices around Chicago, Illinois

noreply@blogger.com (Terry) — Tue, 16 Dec 2008 19:55:00 +0000

With the coming new year, we anticipate a surge in business. After all, holiday bills will be coming due, people will make New Year's resolutions to get their finances in order, not to mention tax refund time as well.

I wanted to announce the opening of our new Joliet office location.
16 W. Van Buren, Suite 303, Joliet, IL 6043, which is just down from the Joliet Bankruptcy courtroom. We offer free consultations, so don't hesitate to contact us for a free legal evaluation.

http://www.leederslaw.com

Our other office locations:

20 E. Jackson Blvd. Suite 850 Chicago, IL

10540 S. Western Ave Suite 402 Chicago, IL

2025 S. Arlington Heights Rd. Ste. 113 Arlington Heights, IL 60005

3333 W. Warrenville, Rd. Suite 200, Naperville, IL 60532

228 N. Genesee St. Suite 205, Waukegan, IL 60085

16 W. Van Buren, Suite 303, Joliet, IL 60432

reaffirmations & rescissions in Chapter 7 bankruptcy

noreply@blogger.com (Terry) — Fri, 12 Dec 2008 17:24:00 +0000

Question:
During my BK, I reaffirmed an auto loan. However, I was told by my lawyer that I could change my mind and surrender the vehicle as long as it was done before the discharge took place. My question is, I filed the paperwork to surrender the vehicle with the court and my Lawyer before the discharge took place. The vehicle was picked up by the bank over two months ago. Is it legal for them (USAA) to continue to report my loan as 30/60/90 days late on payment when I have surrendered the vehicle and I have not had any control of the vehicle for approx 75 days?
My credit report is already shot and now it is suffering even more due to the delinquent reporting by the bank.
Please help!!!

Answer:
Yes, you can rescind a reaffirmation within 60 days of signing it, or the date of discharge, whichever is later. The creditor would then have the right to collect the collateral, then liquidate it to recoup whatever they can out of the asset, with any remaining balance being discharged through the bankruptcy case.

The bankruptcy should trump the payment history. Occasionally, they will mis-report it on the report, because you did sign the reaffirmation originally. You can usually contact the credit bureau to do an investigation about the mistake, and they have a duty to fix any errors accordingly, giving you a copy of the 'clean' report once fixed.

Recent usage before bankruptcy

noreply@blogger.com (Terry) — Tue, 09 Dec 2008 21:56:00 +0000

No matter what chapter you plan on filing for, do not, I repeat do not run up debt, charge on your credit cards, take loans, especially payday loans right before you file. Do not do it to pay the lawyer. Do not do it to pay the bankruptcy court filing fees. It will only cause problems with your case.

The pertinent code section is quoted here.
11 USC § 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt--
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by--
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)--
(I) consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 [$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years by section 104. Adjusted amounts effective 4-1-07 are in brackets.]
(ii) for purposes of this subparagraph--
(I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

This will only cause the creditors to object to the dischargeability of the debt through an adversary proceeding in your case.

Cubs -Tribune Bankruptcy

noreply@blogger.com (Terry) — Mon, 08 Dec 2008 20:20:00 +0000

Here is a switch, I just covered this in my sports column, but it is relevant here too.

The Tribune Co.has filed for Chapter 11 bankruptcy protection in Delaware.

They have said in a news release, that the Chicago Cubs, including Wrigley Field, were not included in the bankruptcy filing. Efforts to sell the Chicago Cubs will continue, the company said.

Bankruptcy in the media

noreply@blogger.com (Terry) — Fri, 05 Dec 2008 15:33:00 +0000

Recently I was interviewed by Inyoung Hwang from Northwestern University’s Medill graduate journalism school regarding the recent increases in bankruptcy filings and the economy. Here is the article.

Bankruptcy filings soar in Chicago
by Inyoung Hwang
Dec 05, 2008

Amid a severe economic crisis and a credit squeeze leaving people with fewer options, bankruptcy filings in Chicago soared in October and increased significantly for the first 10 months of 2008, reflecting a broad national trend.

Total personal and business bankruptcy filings at the U.S. Bankruptcy Court for the Northern District of Illinois surged 39.6 percent in October to 3,483 from 2,495 a year ago. Filings jumped 65.7 percent in September to 3,121 from 1,884 a year ago. The figures were reported in the bankruptcy court’s most recent statistical release.

In all of 2007 the Northern District filings totaled 24,619, a figure already surpassed in 2008 with the 10-month count at 29,771.

“In a large metropolis like Chicago, people normally come in because of consumer debt, but with the layoffs and pay cuts this year, it’s been the bottom line for people for many reasons,” said Terrance Leeders, a bankruptcy attorney with Leeders & Associates Ltd., in Chicago. “The mortgage market is another cause, because people got in over their heads with properties that they can’t afford now.”

According to national statistics compiled by Automated Access to Court Electronic Records, a bankruptcy data company based in Oklahoma City, the number of personal bankruptcy filings in the U.S. totaled 108,813 in October, a figure greater than 100,000 for the first time since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act, signed by President George W. Bush in 2005, which made the filing process more difficult and expensive.

In November, the national figure dipped slightly to 91,355 filings, but Mike Bickford, president of AACER, noted that November was the shortest month of the year, with only 18 official filing dates but just 17 in most districts, since many courts were closed the Friday after Thanksgiving.

Nationwide, the average number of filings per filing day increased to 5,075 for the 18 filing days in November, compared with 4,946 daily filings in the 22 filings days in October. The Bankruptcy Court for the Northern District of Illinois has not yet released the November figures for Chicago.

“Since the changes in the bankruptcy laws in 2005, the numbers have been ramping up each year,” Leeders noted. The distressed housing market and the huge layoffs seen on the national level have hit Chicago’s economy as well, bringing an influx of clients to Leeders’ office, he said.

Chapter 7 filings, or filings by individuals and companies liquidating their assets in order to get a fresh start, increased to 2,360 in October, compared with 2,101 filings in September and 1,472 filings in the year-ago period.

Leeders said the number of bankruptcy filings tends to rise at the end of the year, as people’s expenses hike up, holiday bills trickle in and tax returns loom.

Chapter 11 filings, or filings by companies trying to reorganize their businesses to stay afloat, remained flat in October compared with the same period last year. But the total number of filings in 2008 so far is at 138, already on the verge of surpassing last year’s total of 142 filings.

Read full article here.

Preferential payments while insolvent - must prove insolvent at time of payment

noreply@blogger.com (Terry) — Tue, 25 Nov 2008 16:51:00 +0000

Civil - Bankruptcy
Baldi v. Samuel Son & Company, Ltd., Nos. 08-1022 & 08-1136 Cons. (11/24/08). Appeal, N.D. Ill. E. Div. Aff'd.
Dist. Ct. did not err in denying Trustee's request to recover several payments that debtor had made within four years prior to declaring bankruptcy. While Trustee attempted to establish dates of debtor's insolvency as time between beginning and end of start-up entity, Trustee failed to show that debtor was insolvent at time start-up was formed. Moreover, Trustee improperly failed to discount certain contingent liabilities when valuing start-up company.

new bill updates

noreply@blogger.com (Terry) — Thu, 20 Nov 2008 16:30:00 +0000

Mortgage Foreclosure Act
Senate Bill 2725 (Haine, D-Alton; Harris, D-Chicago) creates a 90-day stay in Illinois courts of action in any pending mortgage foreclosure. It also prohibits the filing of any new mortgage foreclosure action during those 90 days. The 90 days begins on the Governor's signature. It is on second reading in the House. It must pass the House and go back to the Senate for concurrence with House Amendment No. 1 before it is sent to the Governor. The House meets today and for two days in January before adjourning for a new General Assembly.

Obama - McCain tax savings Calculator

noreply@blogger.com (Terry) — Thu, 30 Oct 2008 01:02:00 +0000

New Illinois Bankruptcy caselaw

noreply@blogger.com (Terry) — Wed, 22 Oct 2008 21:01:00 +0000

In re: Kreisler, No. 06-3881 (10/20/08). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Court erred in invoking doctrine of equitable subordination to essentially reduce priority of claim that debtors had purchased at discount from secured creditor. Bankruptcy rules allow creditors to sell their claims in bankruptcy estate, and said doctrine should not have been invoked since there was no evidence that debtors' purchase of secured claim harmed any other creditor. Moreover, debtors do not otherwise owe fiduciary duties to their creditors.

Rapid Fire Q&A Bankruptcy Style

noreply@blogger.com (Terry) — Wed, 08 Oct 2008 21:48:00 +0000

MORE BANKRUPTCY Q&A
Get your own lawyer. This is not legal advice for you!
State laws and case law vary.

Here we go.

Subject: Will I be able to Keep my vehicle?
Question: I filed for chapter 7 bankruptcy relief on Sep. 9, 2008. At the time that I filed, I was behind on a few payments to the finance company for my vehicle and requested reaffirmation. The finance company has filed to lift the stay. Will I be able to keep my vehicle?

Answer: Maybe. You need to bring the loan current, or have the loan re-written with the reaffirmation agreement. Otherwise, once the stay is lifted, they can repossess the car if they choose.

Subject: Release of stay
Question: Good evening, After filing Ch 7, I have received a relief of stay from the bank stating they want the house, which we had planned on reaffirming (we are up to date). Now, I'm not sure I should pay this months (Oct) mortgage before we go to the hearing about the release of stay (Oct 22) as then I'll have no money to move if the bank chooses to keep the house regardless of us being caught up. If the bank does choose to take my home, do you know approximately how long before we will be required to move out? Will I have time to find another place to live or will they just show up and shoo us out the door?
Thanks so much in advance for your kind help.

Answer: The stay modification just allows the creditor to collect from you. If you are current, then you shouldn't have anything to worry about. You may want to sign a reaffirmation agreement. Please speak with your lawyer to get specific advice though.

Subject: 7 or 13
Question: I have 5 rental homes that are starting the foreclosure process. I currently have 100k in equity in my primary home, and 15k in cars. all rental homes are 80/20 alt a loans. I was told the second lender can and sometimes come after you for the defiency, which all the houses have. Can I file bankruptcy, and still save my primary homes equity and cars?
Thank you

Answer: You may.
Now, it will come down to if your equity will be protected with your state exemptions, and if you are above the chapter 13 threshold to file, which is just over 1M in secured debt. Speak to a local bankruptcy lawyer for specific advice.

Subject: law suit
Question: I was serve yesterday for a credit debt from 2000. My credit report says it was a charge off. I have 18 more days before the judgment. Is there anyway to stop them from a default judgment. I do not have the money plus they are asking the $1895 plus 8% interest compounded since 2000. The company on the court document is a company that bought the debt. Please help soon. today if the 1st of Oct. and I must know before the 20th.

Answer: Bankruptcy will discharge this debt. The bankruptcy could clear any judgments once you file. In the meantime, though, they can freeze your bank account, garnish wages, or put a lien on your home.

Subject: chap 13
Question: I live in Indiana, and am married for 30 yrs, our house is in my name alone, if my wife files chapter 13 does that cause a stay on foreclosure of our house?

Answer: If your wife is not on the mortgage, her case would not stop any pending foreclosure on your home if it is just in your name.

Subject: Equity line
Question: Hello, filing Ch 7..I forgot to include that in the attorney's note (representing the mortgage company) requesting the relief from stay, that between our first and second mortgage we currently owe 425,000, it states that the house is only worth 310,000 at this point. Does that mean they can take the house even though our payments on the first and second mortgage are current?

Answer: NO, that just informs the court that there is no equity for the trustee to liquidate. The lender won't foreclose if you are current.

Subject: Chapter 13 bankruptcy
Question: I filed bankruptcy 3 years ago. I finished in July 1,2008. But i didn't give my income tax for 2 years,but i gave for one year. Are they still suppose to be garnishing my wages. They mailed me a payoff quote for 3,472.19 I send 1,750.00. After I pay the rest how long will it take me to get my discharge papers. Last week the garnish my wages. Will they continue taking money until the debt is paid.

Answer: Once your balance is paid, the Trustee will audit the file to make sure everyone was paid properly. There are several documents that you may have to file with the court, including your post filing counseling certificate if you haven't done so. The trustee will send payroll notification to stop deductions once they are paid, any amounts overpaid would be returned to you.

Subject: Chapter 7 and foreclosure
Question: My husband and I are currently in Chapter 7 Bankruptcy. Our meeting of the creditors is next week. I have requested a reaffirmation form from my mortgage company. I was 2 months in arrears, but am now current on my mortgage payments. Today, my attorney and I received a letter from an attorney representing the lender, stating that they have a court day for release of stay. I called the lender and asked them if I am okay with keeping the house since I am up to date, they replied that they will not be taking the house as I am current on my mortgage. Though this attorney has a court date for an appearance in 2 weeks for the release of stay. Will they stop this from happening once the lender notifies the attorney that I am now current on my payments? Now, I'm terrified that I'm going to lose my home....Please advise. Thank you so much!

Answer: It is common to get this motion. if you sign a reaffirmation, you will stay liable for the payments. if you stay current, you should be fine. The motion is just to remove the court protection, you can deal with them directly from that point on.

Subject: Bankruptcy and Marriage
Question: My girlfriend filed for bankruptcy (chapter 13 in Florida) one year ago and now we want to get married in the next year. Will her bankruptcy impact my financial status and will her payments change due to her change in marital status? Thanks for your assistance.

Answer: Everything should stay the same, but she should check with her lawyer in case there are local rules that may say otherwise (I'm in IL)

Subject: disbarment
Question: I know the state laws vary, but in general, is an attorney disbarred if he/she files for personal bankruptcy? Thanks -

Answer: Nope.

Subject: Taxes and Bankruptcy
Question: If someone owe tax money (state and federal, student loans) and get into chapter 13 to force a payment plan. How can the person calculate how much is going to pay? What determine the amount to pay? Do all the debt have to be paid on the years of the bankruptcy?
Thank you

Answer: taxes that are less than 3 years old are paid 100% thru a chapter 13. If older, you might be able to pay them at a discounted rate with your other unsecured creditors. this can be as low as 10% and up to 100% based on your assets and your income.
Student loans are non-dischargeable, so they would also be paid 10%-100% based on the same issues above, but the balance that doesn't get paid, you will still owe after the case is done.
Speak to a local bankruptcy attorney (I'm in Illinois) to discuss your case and repayment plan.

Subject: Motion to dismiss Chapter 13
Question: I filed for Chapter 13 almost one year ago, and in the past few months have been unable to make my monthly payments to my trustee. I just received the motion to dismiss my bankruptcy, and I don't have the money to bring my case current. I am making less money than when I filed (about $3,500 less per year). Does this affect anything? Should I just call my trustee and try to work something out (paying as much as I can today?) Or am I out of luck if I can't pay the $2,100 I owe right now? I have no one I can ask for help. What happens if my case is dismissed? I have no property and no car loans, etc.

Answer: You would need to discuss with your lawyer about bringing a motion to modify plan/defer default. Otherwise, you can possibly convert, depending on the reasons you were in chapter13. If dismissed, you might be able to refile again.

Subject: civil suit
Question "My situation is this: Filed bankruptcy rel, 01-07. Tried to save the home and didn't include it in the bankruptcy. Spouse left, Divorced 05-07, With three children and two mortgages, one income, I could not maintain payments, tried to re-finance, no one would. Let the home foreclose, 1st mortgage co. took possession of the property, 2nd company is suing me for the entire amount plus costs, etc. I have no assets left, no disposable income and if they win judgment and garnish my wages I will be forced to quit my job and move. Or something drastic. I answered the complaint, but with no defense, they filed a motion for Summary disposition in their favor. What can I do?"

Answer: You indicated you 'did not list' the home in bankruptcy.
1. You were supposed to list all assets and all debts.
2. if you listed both mortgages and did not reaffirm, then the debt is discharged in the case.
3. if you reaffirmed the debt, then you are on the hook.
Talk to your bankruptcy lawyer to see how the debts were listed, if they were at all. If they were not listed, then they were not discharged.
4. Perhaps, if the court will allow, you can file a motion to reopen the case, to file the amended schedules to list the home. This is up to the judge, and there are reopen and amendment fees.

Subject: CHAPTER 7
Question: I FILED 2.5 YEARS AGO I SIGNED A LETTER OF Re-Affirmation. I'VE DISCHARGED LATER FINDING OUT THAT MORTGAGE COMPANY NEVER FILED IT IT WITH THE COURTS AFTER CALLING THE BANK THEY TOLD ME THAT I WAS JUST PAYING RENT I HAVE NOT MISS A PAYMENT UNTIL I QUIT PAYING ON THE HOUSE THAT WAS NOT MINE I HAVE INVESTED A LOT OF MONEY IN TO THE HOUSE ROOF WINDOWS AND LOT MORE DO I HAVE ANT LEGAL ACTION IN THIS MATTER

Answer: if you want to keep the property, you need to keep making the regular payments and stay current. You can also refinance it with another lender, which you would then be 'on the hook' for the loan.

Subject: small claims and bankruptcy
Question: I has two small claim judgments that stemmed from 2 credit card accounts. These judgments and credit cards were discharged on my chapter 7 bankruptcy.
The small claims judgments are still open and the courts wont close them. what do I do to get them closed? and also one of the attorneys on one of the suits cannot be found anywhere.? any way to fix this..?

Answer: You can contact the court clerk to properly report the debt as discharged. Also you can contact the credit bureau's to fix any errors.

Subject: Bankruptcy and Divorce
Question: I recently filed for Chapter 7 (September 17, 2008). I am currently separated and legally married. I filed as an individual for the bankruptcy.

My wife called me yesterday and wants to file for divorce (Uncontested without minor children). She might of overreacted due to receiving a letter from the BK court stating that she is listed as a creditor.

Will this effect my bankruptcy. I have my creditors meeting on October 31.
Can you have to cases at the same time?

Should I see if she can stall filing until after my discharge in January or does it matter?

Thank you so much for your time and attention to my question.

Answer: It should not effect your case.
You can start the divorce proceeding at any time.
The divorce decree will allocate joint debts, so be sure that you understand which debts you will be responsible for after the divorce (the bankruptcy won't remove her responsibility for the debts)

Subject: Bankruptcy
Question: A relative died several months before I filed bankruptcy. I found out later that I may receive an inheritance. At the time filing and at the time of my hearing it was unknown if there would be any money to be received. If there is, do I have to turn this over to my creditors?

Answer: Inheritances have to be disclosed to the trustee and court for 6 months after you file the case. Provide this information, and the trustee will decide (based on your allowable state/federal exemptions) if they want to liquidate the inheritance to pay to your unsecured creditors. Failure to report this can result in your discharge being revoked

Subject: Realize debts not listed on schedule after hearing
Question: My wife and I filed CH. 7 on 8/27/08, and had our hearing on 9/23/08. A day or two after the hearing we had calls from collection agency and noticed that this specific debt was not listed on our schedule of debts. After closer examination we realized there were other debts not listed. How can we go about getting these debts listed and still be able to get the bk discharged??

Answer: You can amend the schedules with the bankruptcy clerk. Send notice to the trustee and to the creditors. That should do it. Talk to your lawyer, as this is a really simple process that they can handle for you.

Bankruptcy Q&A rapid fire

noreply@blogger.com (Terry) — Wed, 08 Oct 2008 21:41:00 +0000

Time for rapid fire Bankruptcy Q&A again.
PLEASE REMEMBER STATE LAWS DIFFER. SPEAK TO YOUR OWN ATTORNEY. THIS IS NOT LEGAL ADVICE BASED ON YOUR CASE.

Subject: Chapter 7 waiting 8 years
Question: QUESTION: I filed a Chapter 7 for just myself in 03/01, discharged in 07/01. I just filed today for a Joint Chapter 7 and found out I have to wait 8 years in between filing. Any exceptions or way to get around the waiting period? Thanks...

ANSWER: Nope, your case will be dismissed, or else you can move to convert your case to Chapter 13 which is allowed. That is a repayment plan.

---------- FOLLOW-UP ----------

QUESTION: Thanks, that's what I've found I could do. Too much past consumer debts to do Chapter 13. With my wife on the petition can it proceed and I withdraw my name from it? Thanks...

Answer: Ah, good point. You can bring a motion to dismiss yourself as a party and keep her in the chapter 7. That should be approved.

Subject: amendment to bankrupcty
Question: Hi: I just went before the court yesterday, regarding my case. I need to amend it. How long do I have before it's too late to file this amendment?

Answer: Normally, for chapter 7 you can amend up until the discharge, which will be approx. 60 days if you just had your hearing, but it is best to file them right away.

Subject: Mortgage Forbearance and Chapter 7
Question: My husband and I are filing Chapter 7 but are going to keep our house. We are not behind on our payments but I am thinking of contacting our mortgage servicer to ask for a temporary forbearance. We have not filed ch 7 yet but will in the next month. If I make a temporary forbearance what effect does it have when we go to court?

Answer: Be careful, many times, the forbearance is accelerated once a bankruptcy case is filed. Otherwise, you need to stay current if there is no such provision. Be sure to advise the lender of your upcoming BK.

Subject: Chap 7 vs 13
Question: I filed a chapter 7 in 05 did not include all my credit cards. Since then I have lost my job My husband did not file with me at the time. We have bills together now and can not make it .He lost his job also. Can we go back and file since I did indivisual in 05

Answer: You can only do chapter 7 every 8 years, so if you want to file, then Chapter 13 is your only available option. your husband can do chapter 7 if he has not filed in the last 8 years.

Subject: Bankruptcy 13-kicked out or quit
Question: I have been in ch. 13 for 2yrs.What will happen if i let them dismiss my case?All my debt is unsecured..Thanks.

Answer: The creditors can start to collect on the unpaid balances again.

Subject: 2nd mortgage
Question: QUESTION: My second mortgage is my concern in bankruptcy.
The second mortgage has already been written off according all three credit bureaus. My house is barely worth the second mortgage much less the second second mortgage. How can I or what steps in my hearing Sept 30 2008 for chapter 7 can i take to be rid of this second mortgage?

ANSWER: The 2nd mortgage is a lien on your home, so it must be paid if you wish to keep your home. if you are surrendering the home in bankruptcy, they will be discharged, and would be paid out of any of the proceeds of the sale (if any).

---------- FOLLOW-UP ----------

QUESTION: My first mtg is ok and i want to keep the house. The second Mortgage has been written off prior to the bankruptcy by the other mortgage company. It still shows up on the credit bureaus as written off. What happens to the second Mortgage. Value of the house is $109000...owe $107000 or first mortgage and $46000 on the second mortgage
that was written off.

Answer: It is still a lien on your home, that clouds title in the event of transfer or sale.

Subject: income received after bankruptcy closed
Question: if i file a chapter 7 bankruptcy, is it possible for any of the creditors included in that bankruptcy to reach income that i earn, inherit, or otherwise acquire after the bankruptcy closes? once my bankruptcy is final, i'd like to sell my long term disability policy and convert my monthly payments to a lump sum. thanks.

Answer: You have to disclose inheritances to the court for liquidation for 6 months after your case.
You can liquidate your assets after you are discharged to do what you want with them.

Subject: Tuition in Collections
Question: Hello,

I have an unpaid tuition bill that has been presented to collections for a semester in which I dropped out of school in 2005. The entire bill is $3538 - which includes $1974 in tuition fees $205 in tickets $474.50 in fees and $884.50 in collection cost - as of this point $116 has been collected from my state taxes leaving a balance of $3421.15 - My issue is - since my original balance of tuition and tickets cost is only $2180 - Question #1: Can I attempt to settle on the remaining fees/collection cost of $1360 - Question 2: Is there not a percentage in which I can only be charged up to on the fees/collection costs as they have charged me up to 62% of the original balance - Question 3: At this point is it best if I attempt to hire an lawyer to assist me in settling this debt and since the cost is so low is it feasible for me to believe a lawyer will attempt to assist me with this issue?

Answer: It would be best to negotiate with the lenders as Tuition and tickets are non-dischargeable in bankruptcy.
All interest and collection costs are also not discharged.
1. You can settle anything if you can get the lender to agree to it.
2. state and federal law may govern. I practice bankruptcy only and do not know.
3. your call. You can pay an attorney to negotiate for you, or you can try it your self. I've seen results both ways.
4. You shouldn't give poor scores when you ask a bankruptcy attorney a non-bankruptcy set of questions. Please revise.

Subject: Withdrawl-401 K- while in Chapter 13
Question: Hello,

I was wondering if it would be possible to withdrawal my 401 K of $5,000 while I'm in Chapter 13..Just went to court on Thursday and already started making the chapter 13 payments? I qualify through the 401 K to withdrawal since I got laid off from my job. I'm going to open a home daycare and need the money to get it prepared...Do I need to ask the Trustee prior to doing so? Do they need to be informed? Will they take it if I withdraw it.

Answer: You don't need to get permission in most cases, however, you may need permission if you need to modify your plan to afford payments, etc. So talk with your lawyer about the best plan of attack.

Subject: Ex husband had lien on house filed bankruptcy
Question: My fiancées ex husband had a lien placed on the house from a creditor for a car payment that he didn’t pay it went on for years and ended up being a $27,000 lien placed on the property after she filed for divorce. In the divorce settlement he said that he would take care of the debt since it was his. After the divorce he filed bankruptcy and had the amount included in his bankruptcy but he got to keep the car that caused the lien, his attorney filed a stipulated order to redeem vehicle. He told his ex wife that he had the lien taken care of since the company settled with him. Recently she tried to refinance the house and found out that the lien was still on the property and would have to be paid from the refinance. Is there any recourse for her? Does she have to pay the lien?

Answer: She can enforce the divorce decree to have him pay it. She'll have to do that thru the divorce court.

Subject: Will I be able to Keep my vehicle?
Question: I filed for chapter 7 bankruptcy relief on Sep. 9, 2008. At the time that I filed, I was behind on a few payments to the finance company for my vehicle and requested reaffirmation. The finance company has filed to lift the stay. Will I be able to keep my vehicle?

Answer: Maybe. You need to bring the loan current, or have the loan re-written with the reaffirmation agreement. Otherwise, once the stay is lifted, they can repossess the car if they choose.

October 1, 2008 Median Income Level Illinois

noreply@blogger.com (Terry) — Mon, 22 Sep 2008 16:15:00 +0000

State 1 earner 2 People 3 People 4 People *

Alabama $35,507 $44,922 $51,130 $61,586
Alaska $47,501 $68,904 $69,414 $88,361
Arizona $41,792 $55,489 $59,709 $69,210
Arkansas $32,380 $43,755 $47,101 $54,721
California $47,363 $62,690 $68,070 $77,014
Colorado $45,036 $63,240 $68,219 $75,987
Connecticut $55,379 $68,208 $82,160 $99,584
Delaware $44,479 $58,501 $74,320 $76,085
DC $40,774 $70,035 $70,035 $70,035
Florida $40,898 $51,945 $57,937 $68,494
Georgia $39,253 $52,055 $59,668 $68,908
Hawaii $50,832 $63,778 $70,481 $85,577
Idaho $39,397 $50,025 $52,613 $64,464
Illinois $45,604 $57,829 $66,189 $78,182
Indiana $40,155 $51,203 $58,902 $67,911
Iowa $39,851 $52,608 $61,526 $71,309
Kansas $39,488 $54,070 $60,906 $71,867
Kentucky $35,274 $43,793 $53,343 $63,097
Louisiana $35,579 $45,013 $50,682 $64,170
Maine $39,116 $50,140 $61,963 $67,136
Maryland $53,489 $71,213 $81,811 $99,884
Massachusetts $52,814 $63,980 $80,031 $96,572
Michigan $43,050 $51,594 $60,997 $73,490
Minnesota $45,832 $59,778 $72,808 $84,394
Mississippi $31,152 $40,383 $44,752 $53,697
Missouri $38,100 $49,704 $56,311 $67,761
Montana $38,024 $50,844 $50,844 $62,765
Nebraska $36,405 $51,477 $60,491 $69,510
Nevada $46,412 $58,318 $63,351 $71,972
New Hampshire $53,704 $63,320 $74,161 $89,740
New Jersey $55,008 $67,270 $82,239 $99,224
New Mexico $34,585 $46,907 $51,058 $53,938
New York $44,803 $54,898 $65,477 $79,966
North Carolina $37,055 $50,419 $55,182 $67,541
North Dakota $36,813 $51,415 $65,143 $69,098
Ohio $40,888 $50,965 $59,949 $71,489
Oklahoma $36,830 $49,424 $52,479 $59,755
Oregon $43,506 $54,235 $58,789 $70,046
Pennsylvania $43,036 $51,051 $64,775 $75,867
Rhode Island $44,748 $57,121 $70,117 $88,035
South Carolina $37,296 $48,944 $52,806 $63,535
South Dakota $34,219 $49,180 $55,985 $66,451
Tennessee $36,308 $46,927 $53,149 $62,226
Texas $37,120 $52,878 $54,943 $63,945
Utah $47,026 $54,715 $61,437 $69,260
Vermont $39,365 $56,318 $61,934 $73,130
Virginia $47,852 $62,926 $70,485 $82,598
Washington $48,783 $61,172 $67,004 $79,397
West Virginia $37,275 $41,280 $49,111 $57,552
Wisconsin $41,233 $55,525 $64,622 $74,885
Wyoming $44,554 $58,207 $66,033 $77,432

For cases filed on or after April 1, 2007, add $6,900 for each individual in excess of 4.