Author Archives: Jay Butchko
What You Should Know About Non-Bankruptcy Debt Settlement
In August 2023, for the first time in history, Americans’ credit card debt passed the $1 trillion mark. Some people rack up credit card debt because they overspend. Much more often, people use credit cards to pay living expenses when they lose their jobs, business is slow, or another income disruption arises. Credit cards… Read More »
What are the Most Common Reasons for Bankruptcies?
In simple terms, people file bankruptcy because they owe more than they can pay. Average credit card numbers are especially grim. The average household has over $7,000 in credit card debt. At an average interest rate of over 22 percent, it’s very difficult to pay off this debt simply by making double, or even… Read More »
FAQs About Non-Bankruptcy Debt Negotiation
Lots of people have lots of questions about non-bankruptcy debt negotiation. The poor economic conditions of the early 2020s were especially hard on families in the Prairie State. So, most people know they need to do something to get off the revolving debt treadmill. However, to many individuals, that “something” isn’t bankruptcy, which many… Read More »
Does Bankruptcy Affect Social Security Payments?
Technically, no. Social Security benefits and other retirement accounts, like IRAs and 401(k)s, are exempt assets in bankruptcy. The Bankruptcy Code usually doesn’t protect cash in checking accounts or other DDAs (demand deposit accounts). It also usually doesn’t protect short-term savings accounts. Retirement accounts are different. Usually, people sacrifice and save for decades to… Read More »
Will I Lose My Security Clearance if I File Chapter 13 Bankruptcy?
No. And, in fact, according to Guideline F in DoD Directive 5220.06, which is the authoritative document in this area, filing bankruptcy might be the only way to save a security clearance. Chapter 13 affects a debtor’s life in many ways. This filing usually triggers five years of court supervision. Furthermore, filing bankruptcy lowers… Read More »
How Does Bankruptcy Stop Vehicle Repossession?
The repossession threat is real. Legally, banks or other lenders can begin the repossession process after only one missed payment. Usually, these companies electronically disable vehicle ignition even earlier than that. There’s more bad news. Since pandemic lockdowns ended, a combination of high gas prices, job cuts, high vehicle prices, and overall high inflation… Read More »
Can You File Bankruptcy on IRS Debt?
You bet. In most cases, bankruptcy discharges IRS tax debt, gives taxpayers more time to pay, or both. Back taxes are a big issue for many of the nation’s seventy-five million freelancers. Many parts of the country, especially large urban areas like Chicago, didn’t fully get back to normal until sometime in 2022. So,… Read More »
Should I File Chapter 7 or Chapter 13?
Filing choice usually depends on the type of debt. People with burdensome unsecured debts, like medical bills and credit cards, usually file Chapter 7. Debtors who are behind on mortgage notes and other secured debts generally file Chapter 13. Procedurally, the two major forms of consumer bankruptcy are almost identical, except for the length… Read More »
Can Student Loans Usually be Discharged in Bankruptcy?
For many years, the answer to this question was a depressing “usually no.” Now, the answer to this question is an encouraging “it’s complicated.” As his outright student loan forgiveness plan faltered, Joe Biden ordered the Department of Education to release new guidelines regarding bankruptcy and student loans. These discharge guidelines, which are examined… Read More »
Bankruptcy Filing Rates Soar
High interest rates and inflation are starting to take their toll, as Chapter 13 bankruptcy filings increased 23 percent in the first half of 2023. “The growth in filings is reflective of more families and businesses facing surging debt loads due to rising interest rates, inflation, and increased borrowing costs,” American Bankruptcy Institute’s executive… Read More »