Illinois Bankruptcy Blog - Peoria Bankruptcy Lawyer Charles Covey

Bankruptcy an Effective Strategy to Reach Financial Goals

April 30, 2022

Bankruptcy protection can be an effective strategy to solve a difficult financial situation. There are two primary types of personal bankruptcy - Chapter 7 and 13. For people with lower incomes, Chapter 7 often results in a full discharge of unsecured debt on a short time line. A chapter 13, on the other hand, is a repayment plan where some of the debt is repaid over a 3 to 5 year period. Although both Chapter 7 and 13 get rid of unsecured debt such as credit card debt and medical bills, … [Read more...]

Bankruptcy Protection Following an Illness or Injury

April 28, 2022

Unexpected events can easily affect someone’s well-being and financial stability. Although many have life insurance to protect their families, many Americans may not have a safety net in place in the event of an injury or illness that prevents them from earning income. Even those who are fortunate enough to have employer-sponsored disability benefits, such as group short term and long term disability insurance, often find it is not enough. The typical plan only covers 40 to 60 percent of an … [Read more...]

Debt Counseling Versus Bankruptcy Protection

March 31, 2022

Someone who is experiencing a difficult financial situation may not feel comfortable negotiating a payment plan with creditors or collection agencies. Some will turn to nonprofit or credit counseling agencies who function as a go between a borrower and creditors to come up with a plan to repay debts. A debt management program is not unlike a Chapter 13 bankruptcy, which also strives to set up an affordable repayment plan to eliminate debt. Although they are similar in some respects, Chapter … [Read more...]

Convert a Chapter 13 Bankruptcy to a Chapter 7

March 27, 2022

An individual who has filed Chapter 13 bankruptcy may not be able to make the required payments because of unforeseen financial difficulties. Many who find themselves in this situation may wonder if they can convert a Chapter 13 bankruptcy to a Chapter 7. First it’s important to look at the differences between Chapter 7 and 13 Bankruptcy protections. Chapter 7 bankruptcy is a good option for someone who has limited income and few assets. With the exception of a handful of exemptions, the few … [Read more...]

How is Property Subject to a Lien Handled Under Bankruptcy?

February 28, 2022

Those considering bankruptcy protection often wonder what happens to property that is subject to a lien. In some cases, a bankruptcy court may set aside or reduce the lien on the property, allowing more flexibility in bankruptcy process. If individuals (or spouse's filing jointly) wish to keep the property secured by a lien, they can also agree to a reaffirmation plan with secured creditors. A reaffirmation agreement is a promise to continue to pay the amount owed despite the bankruptcy, … [Read more...]

Human Resource Decisions During Chapter 11 Bankruptcy

February 25, 2022

Given the economic challenges of late, many business owners may consider Chapter 11 bankruptcy protection in order to turn things around financially, restructuring debt and the overall organization of the business so that they can remain open. Soon as they file a petition for bankruptcy, an automatic stay is triggered, providing some needed breathing room from creditor actions while they figure things out. Of course, when a business owner declares Chapter 11 bankruptcy, there are many … [Read more...]

Preparing for Your Bankruptcy Consultation

January 30, 2022

If you have scheduled an initial consultation with a bankruptcy attorney, you will want to prepare by gathering documentation and other information needed to determine your eligibility for bankruptcy. You will want to provide your bankruptcy attorney with proof of income; recent tax returns; a list of debts including loans, credit cards, medical bills; and a list of household expenses that you make every month which may include rent, food, or insurance. It is also helpful to anticipate … [Read more...]

Credit Counseling Versus Bankruptcy Protection

January 26, 2022

Many have seen the commercials for credit counseling services and ask, what is the difference between credit counseling and bankruptcy protection? Credit Counseling Services With so many struggling to pay their bills, credit counseling services have popped up across the nation offering to help people consolidate their debt into one or more affordable payments. This approach involves paying a credit counselor to reach out to your creditors to reach a new repayment plan - something an … [Read more...]

Student Loan Repayment Pause Extended

December 30, 2021

The student loan repayment pause which was set to end February 1st is now been extended until May 2022. The pause on the repayment of federal student loans in response to the Covid-19 pandemic has provided many Americans with needed financial relief with the extension giving those who have fallen behind financially a few more months to come up with a plan to tackle their financial difficulties. For some, chapter 7 or 13 bankruptcy is a good strategy to recover from the economic downturn that … [Read more...]

Foreclosure and Repossession Stopped with an Automatic Stay in Bankruptcy

December 28, 2021

When an individual files a chapter 7, 11 or 13 bankruptcy, collection efforts stop under an automatic stay. Any collection activity against the debtor and the debtor's bankruptcy estate is off limits as the process moves forward. The bankruptcy estate is comprised of interests of the debtor including, but certainly not limited to, tangible property such as a home, car and cash, or in cases where a bankruptcy filer owns a business, may also include inventory, accounts receivable, unpaid … [Read more...]