Author Archives: Jay Butchko
Special Issues in Gray Bankruptcies
Adverse economic conditions have combined to drive up over-55 bankruptcy filings 65 percent since 1991. Many people in this age group financially support their children, at least partially. Furthermore, once-generous government and charitable social welfare programs aren’t nearly as generous anymore. The icing on this unpleasant cake is persistently-high inflation and interest rates. All… Read More »
What is Chapter 7 in a Bankruptcy?
This federal debt relief program is not a white flag of surrender. Instead, Chapter 7 in a bankruptcy is a fresh start. Many Americans, especially those with high credit card debt, badly need a financial fresh start. Revolving debt is a treadmill. Since the interest rate is so high, usually above 20 percent, no… Read More »
Formal and Informal Property Exemptions in an Illinois Bankruptcy
The Bankruptcy Code guarantees debtors a fresh start. This fresh start wouldn’t be possible unless the debtor’s assets were exempt (protected) from creditor or trustee seizure. Creditors might try to repossess property if the debtor is delinquent. Trustees (people who oversee bankruptcies for judges) seize property, liquidate it, and distribute the money among creditors…. Read More »
What Happens When You File Chapter 13 Bankruptcy?
The short answer to this question is easy. When you file Chapter 13, or any other form of bankruptcy, you get a fresh start, as the Supreme Court confirmed once again in 2023. But the legal bankruptcy process goes far beyond filing paperwork. If the case isn’t filed properly, or is filed at the… Read More »
Can You File Bankruptcy on IRS and State Taxes?
Many Illini are behind on their taxes, mostly because the era of the pure 9-to-5 job is gone. In the United States alone, freelancers now earn more than $1.3 trillion per year. Since this income is uneven, it’s easy to fall behind on estimated tax and other such payments. Taxing authorities, especially in cash-strapped… Read More »
How Are Chapter 7 and 13 Bankruptcies Similar?
Overall purpose might be the biggest similarity between Chapter 7 and Chapter 13 bankruptcy. Both federal debt relief programs offer a fresh start to honest yet unfortunate debtors. Honest debtors have pure motives when they accurately complete and file all bankruptcy forms and other paperwork. Unfortunate debtors usually have excessive debts primarily because of… Read More »
How Much Can You Usually Settle a Debt For?
It’s very difficult to say, since these matters are so fact specific. Generally, debt negotiation reduces a UPB (unpaid principal balance) between 10 and 50 percent. Clear evidence of lender fault, like lender fraud, generally means a large reduction. Mere inability to pay generally means a smaller reduction. The bankruptcy bluff, which is outlined… Read More »
Bankruptcy and House-Buying: What You Should Know
Most mortgage banks follow the Fannie Mae rules, which include a two- or four-year waiting period for a home mortgage that applies in most cases. Usually, the clock begins ticking after the judge issues a dismissal or discharge order. Generally, Chapter 13 filers must wait two years and Chapter 7 filers must wait four… Read More »
Does Bankruptcy Affect Your Security Clearance?
Although most people believe the answer to this question is “yes,” the B-word does not appear in Guideline F of DoD Directive 5220.6, the relevant document in these situations. However, Guideline F does touch on a number of bankruptcy-related matters. It simply says some very unexpected things about the relationship between bankruptcy and a… Read More »
If I File Bankruptcy, Can I Buy A Car?
Absolutely, and it’s a good thing too. Most new cars last about 175,000 miles. At 15,000 miles per year, a typical mileage rate for Chicagoland, that’s a little over eleven years. So, in some cases, a debtor might need another vehicle during bankruptcy. Assume Phil drives a ten-year-old car when he filed Chapter 13… Read More »