You may be facing financial difficulties and wondering if you are eligible to file for a Chapter 7 bankruptcy to eliminate your debt. To figure out if you may be eligible, you can start by determining your monthly income and comparing that to the median family income in your state for the same size household. If your income does not exceed the state median income, you may be able to file for Chapter 7 bankruptcy. To calculate your 'current monthly income', you will use your average monthly … [Read more...]
What is Secured Debt in Bankruptcy?
A debt is considered secure when it is tied to a specific item of property, called collateral, that guarantees the payment of the debt. Common examples of secured debts are car loans and mortgages, where the house or automobile serve as collateral for the debt. Secured debts may also include home equity loans or HELOC's, loans for a range of vehicles beyond cars from boats or tractors to RVs, loans for business equipment, machines or inventory and even store charges made with a credit card that … [Read more...]
341 Bankruptcy Hearing…What to Expect
Shortly after you file your bankruptcy papers you will receive a notice of the date of your meeting of creditors, also called a 341 hearing. This meeting is where you meet with the trustee assigned to your bankruptcy case. The trustee is responsible for administering your bankruptcy estate and their job is to make sure that your creditors get paid as much as possible. In order to do this, the trustee wants to ensure the accuracy of your documents and your reported income. In this … [Read more...]
Bankruptcy’s Automatic Stay Keeps Creditors at Bay
If you are facing an eminent home foreclosure or fear your car will be repossessed any day, it is possible to stop creditors from acting by filing an emergency petition. Filing an emergency petition will result in a federal court order called an 'order for relief/automatic stay' which can protect you from certain actions by your creditors. The emergency petition requires less initial documentation to expedite the process, but you will need to submit a complete filing within a specified time … [Read more...]
Keeping the Essentials – Your Home and Car in Bankruptcy
A Chapter 7 bankruptcy, otherwise known as a liquidation bankruptcy, wipes out debt completely and appeals to many who cannot afford to pay their bills. But what about people who have non-exempt property that they do not want to give up? Chapter 13 is a reorganization bankruptcy and offers an opportunity for debtors to keep their property by agreeing to make monthly payments toward their debt over the course of three to five years. Chapter 13 bankruptcies may allow you to restructure your … [Read more...]
Medical Bankruptcy on the Rise
The leading cause of bankruptcy is not overspending, nor lack of adequate financial planning, but the financial free fall caused by a health crisis. Despite recent advances in the health care policy, American households continue to struggle with medical debt, and it’s only getting worse. Americans are putting more of their take-home pay toward medical costs than ever before and, oftentimes, are not keeping up. Medical debt collected by third-party collections agencies is roughly three times as … [Read more...]
The Difference Between Chapter 7 and Chapter 13 Bankruptcy Illinois
Chapter 7 bankruptcy is what many think of as wiping the slate clean and getting a fresh start. This type of bankruptcy is a liquidation bankruptcy designed to erase general unsecured debts such as credit cards and medical bills. In order to qualify for Chapter 7, you must have little or no disposable income. When you file, a trustee is appointed to administer your case to review your bankruptcy papers, supporting documents, and to arrange the sell of your nonexempt property to pay back your … [Read more...]
Three times when Chapter 13 bankruptcy may be the better choice
If you fall into three situations, Chapter 13 may be a better fit for you. Individuals having financial problems have two types of bankruptcy to choose from-Chapter 7 and Chapter 13. Most people assume that Chapter 7 is the better fit for them, since it is filed more often. However, this is not always the case. In reality, there are three primary situations where filing Chapter 13 bankruptcy would potentially be a better fit. Foreclosure is imminent Most people that are at risk of … [Read more...]
Illinois Garnishments and Bankruptcy
In Illinois, a judgment creditor can obtain a court order to put in place a wage deduction from your earnings. This is commonly referred to as garnishment. This wage deduction takes a percentage of your wages, before you ever see them, and transfers them to your creditor. Wage Garnishment This wage deduction, or garnishment, can only be done where there is a valid judgment debt. In Illinois, the creditor then files an action in court to deduct the lesser of either 15 percent of your gross … [Read more...]
The short sale. Everyone has heard the term, but not everyone really understands it.
Some people think it has to do with the time necessary to complete the sale process, assuming that a short sale only takes a short period of time. In reality, though, short sales often take much longer to complete than traditional sales. The term short sale actually refers to the amount of money the bank or mortgage lender is willing to accept to allow the property to be transferred to a new owner. In layman terms, the bank is willing to short themselves, taking less than the mortgage value … [Read more...]