Category Archives: Bankruptcy
Key Property Exemptions in a Chapter 7 Bankruptcy
Many people erroneously believe that Chapter 7 bankruptcy is a liquidation bankruptcy. In fact, Chapter 7 bankruptcy stops liquidation. The Automatic Stay prohibits adverse creditor pre-liquidation actions, such as foreclosure and repossession. Additionally, Illinois law includes generous property exemptions that put a force field around most property for the duration of a Chapter 7… Read More »
What is the Main Problem in Chapter 13?
Many people don’t know what they’re getting into when they file Chapter 13. Filing a voluntary petition is just the beginning. Chapter 13 is an exhaustive legal process that often includes adversarial actions, disputes with the trustee (person who manages the bankruptcy for the judge), and especially in a Chapter 13, modification and dismissal… Read More »
Bankruptcy Loopholes That Protect Your Home
Home protection is a key priority for many bankruptcy debtors. Many debtors file Chapter 7 or Chapter 13 to take advantage of bankruptcy’s Automatic Stay and stop home foreclosure. A pair of loopholes buried deep within the Bankruptcy Code may also apply in consumer bankruptcy cases. These loopholes often make a home more affordable… Read More »
Scheduling SS Benefits: What’s the Big Deal?
For most purposes, it doesn’t matter if a debtor lists Social Security benefits on Schedule A (Assets) or Schedule I (Monthly Income). Social Security benefits, and other government benefits as well, such as workers’ comp payments, are exempt in bankruptcy. But when the case goes to court, listing these payments as an asset or… Read More »
How Much Debt Disqualifies You from a Security Clearance?
Technically, any amount of debt disqualifies you from a security clearance, if that debt creates a security concern under Guideline F of DoD Directive 5220.6. This provision considers the amount of debt, but mostly focuses on the circumstances of that debt. Guideline F also includes some mitigating circumstances which, if proved, protect a security… Read More »
A Complete Guide to Bankruptcy and Vehicle Purchases
Bankruptcy debtors, like all other people, periodically need new cars. Most vehicles start wearing out after about 150,000 miles. Soon after that point, maintenance costs get so high that it’s cheaper to replace the vehicle. Therefore, bankruptcy debtors who drive used cars must often replace them either while their cases are pending or almost… Read More »
The Repayment Assistance Plan: A Closer Look
A new student loan repayment program for all loans taken out after July 1, 2026 is a hybrid between student loan forgiveness and pay-what-you-owe, according to the Trump Administration. RAP uses the borrower’s adjusted gross income to calculate monthly payments on a sliding scale. Borrowers who earn under $20,000 must pay 1 percent of… Read More »
Some Post-Bankruptcy Tips
An alarming number of debtors file Chapter 7 and/or Chapter 13 more than once. The repeat bankruptcy filing rate may be as high as 50 percent, according to one study. Bankruptcy gives distressed debtors a second chance. Based on these statistics, many people squander that second chance. A bankruptcy mulligan gets them through a… Read More »
What is the #1 Cause of Bankruptcies?
Medical bills are the #1 cause of consumer bankruptcies in Illinois. Many hoped the 2010 Affordable Care Act would stem the tide of medical bill bankruptcies. Indeed, the proportion of medical bankruptcies declined from about 65 percent to about 40 percent. However, high medical bills are still the #1 cause. Usually, then money gets… Read More »
Is Debt Negotiation a Good Idea?
In some cases, debt negotiation is a good idea because it’s a reasonably effective bankruptcy substitute. Some debtors have severe bankruptcy-phobia. They refuse to even consider the prospect of a Chapter 7 or Chapter 13 voluntary petition regardless of their situation, much like some people won’t undergo heart surgery even if they need the… Read More »
