Monthly Archives: February 2012

Chapter 13 Declarations Increase Among Chicago Bankruptcy Filings

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Though there was a brief respite in bad economic news for a few months in 2009 and into 2010, the problems that small businesses, consumers, and laborers face returned with new rounds of negative financial data in 2011.  As prices for basic commodities increased along with a rise in inflation, wages and retail profits remained flat, creating a situation where American families began to spend far more to survive than what they were earning.  As a result, Chicago bankruptcy filings, along with those in other ‘Iron Belt’ cities, have increased.  Because of a combination of the Bankruptcy Abuse and Consumer Protection Act of 2005 and the fact that more insolvency cases involve wage earners, however, a growing number of these cases have been Chapter 13 filings.

In many ways, this development is actually a good thing, as Chapter 13 grants a bankruptcy petitioner far more control over their own finances.  Unlike Chapter 7, it does not involve handing one’s economic fate over to a third party like a trustee but, rather, challenges a debtor to formulate a plan to repay their creditors.  As such, it gives these debtors a far more active role in their own financial rehabilitation.

Another positive aspect of filing for something other than Chapter 7 bankruptcy is that the consumer retains their assets.  Though this property may still be vulnerable to other types of legal action and have to be liquidated by the debtor themselves, it is at least under their control, which increases the odds that it will be retained at the end of the insolvency process.

The degree to which a Chicago bankruptcy filing results in retained assets and viable financial rehabilitation, though, is often predicated on the manner in which it has been handled.  Because of this, an experienced bankruptcy attorney like the professionals at our offices can make all the difference for a family’s long term economic health.  To learn more about how we can help, feel free to contact us today.  It’s never too soon to get started on the road back to financial certainty.

Chicago Chapter 7 Filers Should Know What Assets are Considered Exempt Before Filing

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The fact that Chapter 7 protects certain essential assets from liquidation is often of great personal relief to filers.  It should, however, be noted that not every major asset is indeed protected after such a declaration and that, even after certain debts have been discharged, creditors may be able to repossess some items for which they still retain a security interest.  These possibilities, however, should not diminish the fact that many items that are critical to someone’s continued survival, like most clothing, trade tools, older vehicles, as well as some other items, are exempt from liquidation under Chapter 7.  Given that many Chicago Chapter 7 filers have already had their property reduced to what will be considered exempt assets, even, the process occasionally results in no discernible change in their daily living conditions.

Because not every asset or other property is protected under Chapter 7, as well as the fact that some can still be repossessed after a bankruptcy period, any individual that is considering insolvency as a legal option should discuss, in detail, their absolute needs and employment situation with their legal counsel.  It’s imperative that a bankruptcy filer’s attorney know what assets are absolutely essential to the financial rehabilitation of their clients as without such knowledge it’s essentially impossible to safeguard them.  Likewise, any Chicago Chapter 7 filer should review all of his major assets with counsel and determine what items are likely to be liquidated and auctioned by the bankruptcy trustee.  Such foresight and planning, ultimately, can make the difference between failed and successful rehabilitation’s.

In a similar vein, individuals and families that are considering bankruptcy should determine how a ‘means test’ is likely to assess their current financial status.  Beyond determining if their Chapter 7 petition might not be allowed to proceed, such an analysis can also point the way towards alternative solutions such as a Chapter 13 filing or other form of debt reorganization or resettlement.

For more information on how the different types of bankruptcy can affect their lives, individuals should contact an experienced attorney like the astute professionals at our offices.  After having their assets, debts, and income reviewed, our clients can be advised as to what items are likely to be liquidated after a Chapter 7 filing.  If a client’s income is sufficient, our attorneys may also be able to prepare a Chapter 13 case in lieu of one under Chapter 7.  Individuals who are unsure of the exact status of their assets, even, should also feel free to consult with our attorneys.  After all, we’re always happy to advise and represent people who face financial difficulties.

Forest Park Bankruptcy Questions Answered: Five Things Every Consumer Should Know

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At a time when rising electricity, gas, and food prices have forced even the most conscientious and responsible of consumers to consider the possibility that they may have to declare bankruptcy in the near future, taking the time to review a few basic facts regarding insolvency can be a useful exercise.  Indeed, as declines in commerce, real wages, and price hikes for commodities like power and consumables have had a noticeably negative impact on individuals, including the residents of Forest Park, bankruptcy questions have increasingly become a topic of everyday conversation.  To help both people in general and anyone who may be considering declaring bankruptcy, then, we’ve put together a brief set of questions and answers:

I’ve heard that bankruptcy laws have changed in recent years.  Can people still file for Chapter 7?

Yes, though they must meet certain requirements.  The changes people are generally thinking of when they discuss the new restrictions on Chapter 7 filings were brought about by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  Though it mandates that a person’s finances undergo a ‘means test’ before a Chapter 7 filing can proceed in the courts, such a petitioner may still file for Chapter 13 if they are discovered to have disposable income.  They must also wait eight years before they can file again.

Are there specific laws for each city or state?  Are Forest Park bankruptcy laws different than those in the suburbs?

Bankruptcy proceedings occur in federal court and are generally governed by federal bankruptcy statutes, however the laws of individual states influence areas not covered by federal bankruptcy laws.  A case filed in Forest Park, for instance, will be handled in a federal court, however it is also affected by the laws of the state of Illinois.  Individual cities do not have their own bankruptcy laws.

Do I lose everything when I file for bankruptcy?

No.  Under Chapter 7 non-exempt items are auctioned off by a trustee, however many essential, or ‘exempt’, items are retained throughout the procedure.  Under Chapter 13 an individual has none of their assets liquidated, however they must form a plan that will allow them to repay their creditors within 3 to 5 years.

Are there ways to avoid bankruptcy?

Yes.  Debt consolidation and resettlement with creditors are but two of the many possible ways to avoid bankruptcy.  For more information on this subject, it might be in a consumer’s interest to consult a credit counseling agency.

There are, of course, many of the bankruptcy questions that deserve detailed answers.  As every individual case is affected in slightly different ways by the law, however, anyone who may be facing insolvency should speak to one of the experienced attorneys at our offices.  We are, after all, always happy to help anyone in need of legal counsel.