Chicago bankruptcy

Here is a rapid fire list of Q & A from bankruptcy questions I have received recently.
If you have a specific question, feel free to contact me and I’ll be happy to review your situation with you.  Thanks

Subject:     What does reach back mean?

Question:     I was doing fine financially until I went to commission sales.  I kept thinking I was going to make a lot more money than I did. In June 07 I took a cash transfer from my bank credit card to my checking (they offered to me) of 15,000.00.  A week later I transfered 14,000.00 to my daughter for lapband surgery.  That credit crd is now up to 22K and part of about 40K I am in debt and thinking about filing Chapter 7 on.  Do I need to wait one or two years before filing so they wont go after her.  I did not know I was going to be in such a financial pit and dont want my bad decissions to effect her.
 
Answer:     Transfers/payments/gifts to insiders must be disclosed for a year in your bankruptcy paperwork.

Subject:     repo
Question:     Is there a law that clears you from being sued after a certain amount of years. I co-signed 8 years ago for someone on a car and now the bank is just trying to sue me for the difference.
 
Answer:     Bankruptcy will discharge your responsibility for the debt.

Subject:     chapter 7
Question:     Hello.  Thank you for your time.  I filed a chapter 7 in October of 2005, discharged in February of 2006.  I have a residence and a rental home (has already gone to sheriff’s sale) which both were listed assets on the bankruptcy filing.  Both mortgages had ARM’s which adjusted after the discharge, and the loans were never reaffirmed.  Although I kept the payments current until July/August 2007, the values dropped, I could not rewrite the mortgages and have decided to “walk-away.”  Is my understanding correct that, since these assets were discharged in my bankruptcy and not reaffirmed, I cannot be held responsible for any deficiencies?  Thank you
 
Answer:     True. If you did not reaffirm, you are not responsible for the mortgage balance and can walk away from the home.

Subject:     Getting out of Bankruptcy
Question:     I need to know how can refinance my home loan andget out of bankruptcy.
 
Answer:     I assume you are in chapter 13 bankruptcy. You will need to seek out a lender and get a proposed refinance contract.  Then get that to your attorney to draft a motion to permit you to refinance.  You should also order a payoff statement from the trustee.  Once the motion is granted,  (court will look to see if it is reasonable and necessary, comparing costs before and after etc.) then you can close on the loan and turn the proceeds over to the trustee to distribute to your creditors.  You should allow about 30 days for the motion to be heard and granted.

Subject:     Filing taxes post bankruputcy discharge
Question:     I have completed a Chapter 7 bankruptcy during 2007. I am unsure how, or if, I am required to report that to the IRS. I owe no back taxes, and taxes were not apart of my bankruptcy.  All of the debt that was discharged was consumer credit debt. I maintained my home,car and personal belongings.
 
Answer:     As far as I know, there are no special deductions or exemptions to list when filing your taxes in regards to your bankruptcy.  You should mention it to your tax preparer just in case, since I am not a tax expert, and the tax code is as big as the bankruptcy code!

Subject:     Can debt be discharged?
Question:     I am a primary card holder on a credit card.My wife was put on as a authorized user only.She rang up 10,000 in debt on this card.She admits its all her debt.She plans on filing Bankruptcy alone{i am not filing}. Can this debt be disharged?
 
Answer:     This would still be your debt, since you ‘authorized’ her to use your account.  So, they could still collect on this, despite her bankruptcy.

Subject:     Chapter 7
Question:     I live in vancouver wa but work in oregon. I file for chapter 7 bankruptcy in Nov 2007 but the trustee is waitng to close /discharge the debt until I file taxes so he can garnish them. My question is can he garnish my child tax credit and/or my earned incom credit?
 
Answer:     Each jurisdiction may be different, but in Illinois, we use one of the Illinois exemptions to protect Earned Income Credit.  Talk to your attorney about the available exemptions for your refund.

Hi all.

 

I just wanted to let you know that I have been invited to be a featured guest speaker on financial matters on the website Women On The Go Online. I will be speaking on bankruptcy, finance, and other money matters.

Women on the Go Online is hosted by Nikki Woods, AM Morning personalilty on WGCI radio in Chicago.

The monthly podcast can be found on the homepage, and my first topic, ‘How to Avoid Bankruptcy‘ ran in June 2007.

I discuss several tips and tricks on how to improve your daily, monthly, and yearly financial status…simple steps to put some extra cash in your pocket!

Check it out.

Here are the bankruptcy filing statistics for Illinois in 2006. These numbers are drastically down, but have shown some steady increases each quarter now that the new bankruptcy laws have been in place for a year.

This information was obtained at the American Bankruptcy Institute

I have included the US totals as well as a few other main states.

Q1 Q2 Q3 Q4

 

Illinois

6,157

7,587

8,402

8,693

United States

116,771

155,833

171,146

177,599

 

California

6,543

9,704

10,983

12,055

Georgia

8,643

9,582

10,977

11,688

Texas

7,225

8,541

10,133

10,750

Ohio

5,875

9,148

10,047

10,354

NY

5,262

7,820

7,385

9,229

Michigan

6,686

7,989

9,556

9,689

 

Section 1328(f) of the Bankruptcy Code, by the BAPCPA,  states that in Chapter 13 cases–

Discharge

Notwithstanding subsections (a) and (b), the court shall not grant a discharge of all debts provided for in the plan or disallowed under section 502, if the debtor has received a discharge–

(1) in a case filed under chapter 7, 11, or 12 of this title during the 4-year period preceding the date of the order for relief under this chapter, or

(2) in a case filed under chapter 13 of this title during the 2-year period preceding the date of such order.

What does one have to do, or in this case from Wisconsin, NOT DO, to create substantial abuse ?

RECENT CASES: Feb. 6. 2007

Chapter 7 Debtor who fails to aggressively seek out work before the case is subject to dismissal based on the totality of the circumstances.  ‘Substantial abuse’ is now just ‘abuse.’

The court noted: ” … this Court concludes that a debtor who lacks the ability to pay because she has not engaged in a broad employment search, does not wish to work outside her chosen field, does not wish to work within her chosen field outside of southeastern Wisconsin, and takes this position at the expense of her creditors, abuses the provisions of <a href=”http://www.leederslaw.com/chapter7.html”>Chapter 7</a> …”

The court held, “The court concludes that it must look at the debtor’s ability to pay her creditors at the time of the hearing on the motion to dismiss.” ” . . . it must delve further and find out why the debtor does not have the ability to pay. Finally, the Court concludes that if the debtor’s inability to pay creditors is self-imposed, it may consider this fact … in terms of the totality of the circumstances …”

In re Richie, 353 B.R. 569 (Bankruptcy.E.D.Wis. 2006)

Therefore, as practitioners, this case is disturbing, as it takes out the element of bankruptcy case planning.  What should a bankruptcy attorney advise their client?  If a debtor’s attorney advises the debtor to stop working, so that the debtor’s income would allow them to pass the means test, it sounds like that would open the attorney up to malpractice, as it could get the <a href=”http://www.chicagobankruptcynetwork.com/chapter7.html”>chapter 7 case</a> dismissed.  Very interesting.  Therefore, everything you advise a debtor must be very well thought out and planned, knowing that there are these type of pitfalls for the unwary practitioner!

The bankruptcy code states that if you do not list a debt in a bankruptcy petition….

1. It is bankruptcy fraud
2. It is not dischargeable.

What are you to do?

 

Well, if you are filing for Chapter 7 or Chapter 13 it is advisable to provide your attorney a list of all of your debts, including recent copies of your 3 credit reports. Although some attorneys help their clients to obtain them (I do!), often they leave it up to you, the consumer.

Well, a few years ago, the FTC- Federal Trade Commission mandated that consumers are now entitled to one free copy of each of the three credit reports, once per year. Woo Hoo! Free stuff from the government!!

 

The FTC site at www.ftc.gov goes on to explain the specifics, which I quote below

 

Your Access to Free Credit Reports

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

Here are the details about your rights under the FCRA and the Fair and Accurate Credit Transactions (FACT) Act, which established the free annual credit report program.

Q: How do I order my free report?

A: The three nationwide consumer reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report.

To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on the back of this brochure; or you can print it from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time. The law allows you to order one free copy of your report from each of the nationwide consumer reporting companies every 12 months.

As always, this blog does not create an attorney client relationship. I am a debt relief agency, and help people file for bankruptcy under the bankruptcy code.

Now that the legal mumbo jumbo is out of the way, if you want any further bankruptcy information about chapter 7 and chapter 13 bankruptcy filings, feel free to contact me at 312-427-7400 or visit my websites at Leederslaw.com or ChicagoBankruptcyNetwork.com

Chapter 13 bankruptcy

Chapter 13 Stop mortgage foreclosure
Keywords: chapter 13, bankruptcy, foreclosure, consolidation, chapter 7, mortgage, mortgage default, credit cards, medical bills, interest rate, ARM, adjustable rate mortgage
Stop Foreclosure
Yes, you can save your home!

Using the chapter 13 can strategically help you cure your mortgage default, protect your equity and eliminate your other debts to help you right the ship.

Several years ago, we saw a boom in mortgage lenders offering low adjustable rate mortgages (ARMS) 100% to 110% mortgage loans, and no money down mortgages.

Today, we have seen these ARMS increase from 5% to 8%, 9% or more depending on the lender. Homeowners are being bombarded with a mortgage payment that is almost double than it had been previously before the interest rates have started to rise.

What is a homeowner to do? With the soft real estate market, homes have not appreciated in value, or not enough to allow homeowners to refinance and use some of their equity to help with the higher rates.

Chapter 13 is an option. In a nutshell, consumers can file chapter 13 which will let them catch up on their mortgage payment, interest free. It can also consolidate their other financed items and often save money on the interest rates. Currently, debtors can pay cars, furniture and jewelry back at prime rate of interest or prime +2, or +3. Bankrate.com shows a current prime rate of interest at 8.25%.

Consumers can also consolidate their credit card debt, medical bills and other consumer debts and pay them back, with little or now interest, and often can pay them as low as 10 cents on each dollar owed!By doing this, consumers can cure any mortgage arrears, pay off their secured debt for vehicles and for big ticket financed items, while eliminating their consumer debt. A Chapter 13 bankruptcy can run from 3 to 5 years. This depends on your monthly household disposable income. There are several recent changes to the Bankruptcy Code that can affect this repayment plan. These changes were part of the BAPCPA reform. Therefore, it is crucial to discuss with an experienced bankruptcy lawyer about the various law requirements and qualifications based on your unique situation.

For instance, let’s say Johnny Consumer owns a home worth $100,000 in Chicago, Illinois. Let’s say he has a $70,000 mortgage with the bank, but has fallen $6,000 behind and the mortgage company has started a foreclosure. Johnny was recently out of work do to an injury on the job. He has just went back to work, and sees no way to catch up $6000 any time soon. He has $10,000 in medical bills. He owes $3000 on his car. For our example, let’s say that Johnny makes $3000 per month and takes home about $2100. His mortgage is $700 a month, his car note is $300 and he has $67 left at the end of the month to use to try to catch up with the medical bills and the mortgage arrears.

At first glance, there is no way he can manage this on his own. Under a chapter 13, Johnny can make a monthly payment of $367 to the court. This will allow him to catch up on the mortgage, pay off his car note, and eliminate the medical bills he has. This will only take 3 years. It will protect all of the equity he has in his home and stop the foreclosure!

Therefore, if you are looking to stop foreclosure, and have steady income, Chapter 13 could be a great tool to use. You can always refinance or sell your home while under Chapter 13 if you wish to pay off the bankruptcy and move on with your life. The Chapter 13 stops the foreclosure immediately. Often, your only other option would be to refinance, or enter into a repayment agreement with your mortgage company. All too often, they want a double payment each month until you can catch up. If you had that kind of disposable income, you probably wouldn’t be in this situation in the first place.

Contact an experienced Chapter 13 bankruptcy attorney today to discuss these options. You don’t need a home to file either. Often consumers just wish to get a better deal on their old car note, consolidate their credit card debt to eliminate the high interest rates…or wish to consolidate their old student loans and parking tickets. There is a way to pay back old IRS debt as well as pennies on the dollar.

Pick up the phone and call me at 312-427-7400 and I’ll be happy to give you a free consultation by phone or schedule an appointment at one of our convenient office locations.
We also have a free online legal evaluation to try as well.

The time to act is now if you want to save your home from foreclosure.