Category Archives: Chapter 7
Chapter 7 Bankruptcy and Government Benefits: A Primer
Social Security, workers’ compensation, VA disability, and other government benefits are essential to the fresh start the Bankruptcy Code guarantees. Many families depend almost exclusively on government benefits to pay bills and they have no employment or other options. So, if a bankruptcy or other court takes away government benefits, it essentially takes away… Read More »
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 Happens with Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, which is also known as a liquidation bankruptcy, discharges most unsecured debts, such as medical bills and credit cards. According to the Bankruptcy Code, a discharge “releases the debtor from personal liability for certain specified types of debts.” In plain English, discharge eliminates the legal obligation to pay a debt, but… Read More »
Are Chapter 7 Bankruptcies Ever Denied?
No, unless the debtor fails to meet one of the two basic qualifications for bankruptcy. All debtors must be honest and unfortunate. Honest debtors aren’t trying to manipulate the system for their own purposes, and unfortunate debtors are, well, unfortunate. More on these things below. Honest and unfortunate debtors receive all the benefits of… 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 »
Six Key Illinois Bankruptcy Exemptions
Millions of people are saddled with excessively high unsecured debts through no fault of their own. Some people have very high medical bills. Other people had to rely on credit cards during a period of unemployment. These people should at least consider filing Chapter 7 bankruptcy, but they are afraid they will lose important… Read More »
Can Bankruptcy Erase My Student Loans?
One of my law school professors told us that “You never get anything unless you ask.” That seems like a fairly straightforward proposition. But if the student loan discharge statistics are any indication, most Chapter 7 attorneys have not learned this lesson. In places like Illinois, where the Brunner Rule is still in effect,… Read More »
The Color Of Money In Illinois Bankruptcies
Overall, the bankruptcy filing rate has declined sharply since lawmakers “reformed” the Bankruptcy Code in 2005. But the over-65 age group has bucked this trend. So-called grey bankruptcies have tripled since 1991. This increase is not surprising. For the most part, employer-provided pensions, generous Social Security benefits, and low healthcare costs are all things… Read More »
The Gray Bankruptcy Phenomenon In Illinois
Overall, the number of bankruptcy filings has declined dramatically since 2005. That was the year bankers convinced lawmakers to tighten the bankruptcy rules. But among debtors over 65, the filing rate has tripled since 1991. Here in Illinois, older people usually have substantially more assets than younger filers. So, these bankruptcies require a different… Read More »
3 Quick Exemptions In An Indiana Bankruptcy
In a long line of cases dating back to the early 1800s, the United States Supreme Court has said that bankruptcy’s purpose is to give the honest yet unfortunate debtor a fresh start. Asset exemption is an important part of that fresh start. If debtors lose their houses, cars, retirement accounts, and other assets… Read More »