Author Archives: Jay Butchko
Top Five Reasons People File Bankruptcy
Overall, there is only one reason people file bankruptcy. Their assets and incomes greatly exceed their debts and obligations. As a rule of thumb, if your current and delinquent secured and unsecured debts are more than three times your annual income, there is no realistic way to pay these debts off. Many families are… Read More »
What Is Debt Negotiation?
Debt negotiation is an effective debt reduction tool that most people should take advantage of. Generally, if your secured and unsecured debt payments exceed a third of your income, these debts are impossible to repay. Something has to give. Several recent Supreme Court decisions have watered down consumer protections in the Fair Debt Collection… Read More »
What Is The Downside To Filing Chapter 13?
Negative impact on a credit score, which is not as bad as many people think it is, may be the biggest downside to filing Chapter 13 in Illinois. A good credit score, above 700, may drop by as many as 200 points. However, most people who file Chapter 13 do not have good credit… Read More »
Top Five Bankruptcy Exemptions In Illinois
Many people think that personal bankruptcy is like a Monopoly bankruptcy. Filing bankruptcy means you leave the game and have no chance to re-enter it. However, personal bankruptcy is different. It gives a fresh start to honest yet unfortunate debtors. Debtors cannot get such a reboot if they lose most or all of their… Read More »
What Is Chapter 7 And How Does It Work?
The current combination of high consumer debt, high inflation, and high interest rates is enough to push any family’s ability to pay monthly bills to the breaking point. If unsecured debts, like credit cards and medical bills, are the primary problem, Chapter 7 is an excellent solution. As outlined below, Chapter 7 eliminates such… Read More »
Wage Garnishment And Unpaid Student Loans
Americans are carrying an unprecedented amount of student loan debt and unfortunately many former students are struggling to repay their education-related loans. As a result, creditors are seeking wage garnishment orders. Wage garnishment occurs when a court compels an employer to withhold a specified portion from a debtor employee’s paycheck until an outstanding debt… Read More »
How Does Bankruptcy Affect Home Buying?
In a word, it’s complicated. It all starts with the purpose of bankruptcy, which is not to punish debtors, but to give them a fresh start. Frequently, this fresh start involves a future home purchase. So, a bankruptcy filing shouldn’t adversely affect this future decision. Sometimes, the situation is different. A family is in… Read More »
Student Loan Forgiveness Program On Hold
After a second federal court declared the President’s student loan forgiveness program was illegal, the Department of Education shut down the program, at least for the time being. When administration officials closed the application portal, about 26 million people had applied, and 16 million applications had been approved. However, because of court rulings, none… Read More »
Recovering From Bankruptcy In Three Easy Steps
Mostly due to repeated late payments and negative information, such as charge-offs, most bankruptcy filers have poor credit ratings. Therefore, while filing bankruptcy lowers their credit scores, the effect isn’t that dramatic, especially if the debtor files Chapter 13. A lower initial impact means that it’s easier to rebuild a credit score after bankruptcy… Read More »
IRS Fresh Start Program Vs. Bankruptcy: Which Is Better?
In 2011, just as the country was emerging from the Great Recession, the IRS rolled out the Fresh Start Program “to help struggling taxpayers.” Let’s stop right there. The IRS didn’t create this initiative to help taxpayers. The IRS began it to help the IRS. Year after year of staff cuts and budget cuts… Read More »