7th Circuit bankruptcy law case

This is good news for debtors. Debtors are allowed to take the standard ownership deduction on the means test calculation for vehicles that are paid in full.

7th Circuit Cases
Civil - Bankruptcy
Ross-Tousey v. Neary, No. 07-2503 (12/17/08). Appeal, E.D. Wisc. Rev'd and rem'd.
Dist. Ct. erred in finding in Chapter 7 bankruptcy proceedings that debtors who owned cars outright could not take Local Standard transportation ownership deduction for purposes of calculating means test under sec. 707(b)(2)(A)(ii)(I) when determining under Bankruptcy Abuse Prevention and Consumer Protection Act whether debtors must repay portion of their debt or whether debtors were entitled to complete discharge of debt. Debtors are entitled to said deduction, but remand was required to determine whether under totality of circumstances, debtors' financial situation demonstrated abuse under section 707(b)(30(B).

Bankruptcy Attorney offices around Chicago, Illinois

With the coming new year, we anticipate a surge in business. After all, holiday bills will be coming due, people will make New Year's resolutions to get their finances in order, not to mention tax refund time as well.

I wanted to announce the opening of our new Joliet office location.
16 W. Van Buren, Suite 303, Joliet, IL 6043, which is just down from the Joliet Bankruptcy courtroom. We offer free consultations, so don't hesitate to contact us for a free legal evaluation.

http://www.leederslaw.com

Our other office locations:

20 E. Jackson Blvd. Suite 850 Chicago, IL

10540 S. Western Ave Suite 402 Chicago, IL

2025 S. Arlington Heights Rd. Ste. 113 Arlington Heights, IL 60005

3333 W. Warrenville, Rd. Suite 200, Naperville, IL 60532

228 N. Genesee St. Suite 205, Waukegan, IL 60085

16 W. Van Buren, Suite 303, Joliet, IL 60432

reaffirmations & rescissions in Chapter 7 bankruptcy

Question:
During my BK, I reaffirmed an auto loan. However, I was told by my lawyer that I could change my mind and surrender the vehicle as long as it was done before the discharge took place. My question is, I filed the paperwork to surrender the vehicle with the court and my Lawyer before the discharge took place. The vehicle was picked up by the bank over two months ago. Is it legal for them (USAA) to continue to report my loan as 30/60/90 days late on payment when I have surrendered the vehicle and I have not had any control of the vehicle for approx 75 days?
My credit report is already shot and now it is suffering even more due to the delinquent reporting by the bank.
Please help!!!

Answer:
Yes, you can rescind a reaffirmation within 60 days of signing it, or the date of discharge, whichever is later. The creditor would then have the right to collect the collateral, then liquidate it to recoup whatever they can out of the asset, with any remaining balance being discharged through the bankruptcy case.

The bankruptcy should trump the payment history. Occasionally, they will mis-report it on the report, because you did sign the reaffirmation originally. You can usually contact the credit bureau to do an investigation about the mistake, and they have a duty to fix any errors accordingly, giving you a copy of the 'clean' report once fixed.

Recent usage before bankruptcy

No matter what chapter you plan on filing for, do not, I repeat do not run up debt, charge on your credit cards, take loans, especially payday loans right before you file. Do not do it to pay the lawyer. Do not do it to pay the bankruptcy court filing fees. It will only cause problems with your case.

The pertinent code section is quoted here.
11 USC § 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt--
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by--
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)--
(I) consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 [$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years by section 104. Adjusted amounts effective 4-1-07 are in brackets.]
(ii) for purposes of this subparagraph--
(I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

This will only cause the creditors to object to the dischargeability of the debt through an adversary proceeding in your case.

Cubs -Tribune Bankruptcy

Here is a switch, I just covered this in my sports column, but it is relevant here too.

The Tribune Co.has filed for Chapter 11 bankruptcy protection in Delaware.

They have said in a news release, that the Chicago Cubs, including Wrigley Field, were not included in the bankruptcy filing. Efforts to sell the Chicago Cubs will continue, the company said.

Bankruptcy in the media

Recently I was interviewed by Inyoung Hwang from Northwestern University’s Medill graduate journalism school regarding the recent increases in bankruptcy filings and the economy. Here is the article.

Bankruptcy filings soar in Chicago
by Inyoung Hwang
Dec 05, 2008

Amid a severe economic crisis and a credit squeeze leaving people with fewer options, bankruptcy filings in Chicago soared in October and increased significantly for the first 10 months of 2008, reflecting a broad national trend.

Total personal and business bankruptcy filings at the U.S. Bankruptcy Court for the Northern District of Illinois surged 39.6 percent in October to 3,483 from 2,495 a year ago. Filings jumped 65.7 percent in September to 3,121 from 1,884 a year ago. The figures were reported in the bankruptcy court’s most recent statistical release.

In all of 2007 the Northern District filings totaled 24,619, a figure already surpassed in 2008 with the 10-month count at 29,771.

“In a large metropolis like Chicago, people normally come in because of consumer debt, but with the layoffs and pay cuts this year, it’s been the bottom line for people for many reasons,” said Terrance Leeders, a bankruptcy attorney with Leeders & Associates Ltd., in Chicago. “The mortgage market is another cause, because people got in over their heads with properties that they can’t afford now.”

According to national statistics compiled by Automated Access to Court Electronic Records, a bankruptcy data company based in Oklahoma City, the number of personal bankruptcy filings in the U.S. totaled 108,813 in October, a figure greater than 100,000 for the first time since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act, signed by President George W. Bush in 2005, which made the filing process more difficult and expensive.

In November, the national figure dipped slightly to 91,355 filings, but Mike Bickford, president of AACER, noted that November was the shortest month of the year, with only 18 official filing dates but just 17 in most districts, since many courts were closed the Friday after Thanksgiving.

Nationwide, the average number of filings per filing day increased to 5,075 for the 18 filing days in November, compared with 4,946 daily filings in the 22 filings days in October. The Bankruptcy Court for the Northern District of Illinois has not yet released the November figures for Chicago.

“Since the changes in the bankruptcy laws in 2005, the numbers have been ramping up each year,” Leeders noted. The distressed housing market and the huge layoffs seen on the national level have hit Chicago’s economy as well, bringing an influx of clients to Leeders’ office, he said.

Chapter 7 filings, or filings by individuals and companies liquidating their assets in order to get a fresh start, increased to 2,360 in October, compared with 2,101 filings in September and 1,472 filings in the year-ago period.

Leeders said the number of bankruptcy filings tends to rise at the end of the year, as people’s expenses hike up, holiday bills trickle in and tax returns loom.

Chapter 11 filings, or filings by companies trying to reorganize their businesses to stay afloat, remained flat in October compared with the same period last year. But the total number of filings in 2008 so far is at 138, already on the verge of surpassing last year’s total of 142 filings.

Read full article here.

Preferential payments while insolvent - must prove insolvent at time of payment

Civil - Bankruptcy
Baldi v. Samuel Son & Company, Ltd., Nos. 08-1022 & 08-1136 Cons. (11/24/08). Appeal, N.D. Ill. E. Div. Aff'd.
Dist. Ct. did not err in denying Trustee's request to recover several payments that debtor had made within four years prior to declaring bankruptcy. While Trustee attempted to establish dates of debtor's insolvency as time between beginning and end of start-up entity, Trustee failed to show that debtor was insolvent at time start-up was formed. Moreover, Trustee improperly failed to discount certain contingent liabilities when valuing start-up company.

new bill updates

Mortgage Foreclosure Act
Senate Bill 2725 (Haine, D-Alton; Harris, D-Chicago) creates a 90-day stay in Illinois courts of action in any pending mortgage foreclosure. It also prohibits the filing of any new mortgage foreclosure action during those 90 days. The 90 days begins on the Governor's signature. It is on second reading in the House. It must pass the House and go back to the Senate for concurrence with House Amendment No. 1 before it is sent to the Governor. The House meets today and for two days in January before adjourning for a new General Assembly.

Obama - McCain tax savings Calculator

New Illinois Bankruptcy caselaw

In re: Kreisler, No. 06-3881 (10/20/08). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Court erred in invoking doctrine of equitable subordination to essentially reduce priority of claim that debtors had purchased at discount from secured creditor. Bankruptcy rules allow creditors to sell their claims in bankruptcy estate, and said doctrine should not have been invoked since there was no evidence that debtors' purchase of secured claim harmed any other creditor. Moreover, debtors do not otherwise owe fiduciary duties to their creditors.

Rapid Fire Q&A Bankruptcy Style

MORE BANKRUPTCY Q&A
Get your own lawyer. This is not legal advice for you!
State laws and case law vary.

Here we go.

Subject: Will I be able to Keep my vehicle?
Question: I filed for chapter 7 bankruptcy relief on Sep. 9, 2008. At the time that I filed, I was behind on a few payments to the finance company for my vehicle and requested reaffirmation. The finance company has filed to lift the stay. Will I be able to keep my vehicle?

Answer: Maybe. You need to bring the loan current, or have the loan re-written with the reaffirmation agreement. Otherwise, once the stay is lifted, they can repossess the car if they choose.

Subject: Release of stay
Question: Good evening, After filing Ch 7, I have received a relief of stay from the bank stating they want the house, which we had planned on reaffirming (we are up to date). Now, I'm not sure I should pay this months (Oct) mortgage before we go to the hearing about the release of stay (Oct 22) as then I'll have no money to move if the bank chooses to keep the house regardless of us being caught up. If the bank does choose to take my home, do you know approximately how long before we will be required to move out? Will I have time to find another place to live or will they just show up and shoo us out the door?
Thanks so much in advance for your kind help.

Answer: The stay modification just allows the creditor to collect from you. If you are current, then you shouldn't have anything to worry about. You may want to sign a reaffirmation agreement. Please speak with your lawyer to get specific advice though.

Subject: 7 or 13
Question: I have 5 rental homes that are starting the foreclosure process. I currently have 100k in equity in my primary home, and 15k in cars. all rental homes are 80/20 alt a loans. I was told the second lender can and sometimes come after you for the defiency, which all the houses have. Can I file bankruptcy, and still save my primary homes equity and cars?
Thank you

Answer: You may.
Now, it will come down to if your equity will be protected with your state exemptions, and if you are above the chapter 13 threshold to file, which is just over 1M in secured debt. Speak to a local bankruptcy lawyer for specific advice.

Subject: law suit
Question: I was serve yesterday for a credit debt from 2000. My credit report says it was a charge off. I have 18 more days before the judgment. Is there anyway to stop them from a default judgment. I do not have the money plus they are asking the $1895 plus 8% interest compounded since 2000. The company on the court document is a company that bought the debt. Please help soon. today if the 1st of Oct. and I must know before the 20th.

Answer: Bankruptcy will discharge this debt. The bankruptcy could clear any judgments once you file. In the meantime, though, they can freeze your bank account, garnish wages, or put a lien on your home.

Subject: chap 13
Question: I live in Indiana, and am married for 30 yrs, our house is in my name alone, if my wife files chapter 13 does that cause a stay on foreclosure of our house?

Answer: If your wife is not on the mortgage, her case would not stop any pending foreclosure on your home if it is just in your name.

Subject: Equity line
Question: Hello, filing Ch 7..I forgot to include that in the attorney's note (representing the mortgage company) requesting the relief from stay, that between our first and second mortgage we currently owe 425,000, it states that the house is only worth 310,000 at this point. Does that mean they can take the house even though our payments on the first and second mortgage are current?


Answer: NO, that just informs the court that there is no equity for the trustee to liquidate. The lender won't foreclose if you are current.

Subject: Chapter 13 bankruptcy
Question: I filed bankruptcy 3 years ago. I finished in July 1,2008. But i didn't give my income tax for 2 years,but i gave for one year. Are they still suppose to be garnishing my wages. They mailed me a payoff quote for 3,472.19 I send 1,750.00. After I pay the rest how long will it take me to get my discharge papers. Last week the garnish my wages. Will they continue taking money until the debt is paid.

Answer: Once your balance is paid, the Trustee will audit the file to make sure everyone was paid properly. There are several documents that you may have to file with the court, including your post filing counseling certificate if you haven't done so. The trustee will send payroll notification to stop deductions once they are paid, any amounts overpaid would be returned to you.

Subject: Chapter 7 and foreclosure
Question: My husband and I are currently in Chapter 7 Bankruptcy. Our meeting of the creditors is next week. I have requested a reaffirmation form from my mortgage company. I was 2 months in arrears, but am now current on my mortgage payments. Today, my attorney and I received a letter from an attorney representing the lender, stating that they have a court day for release of stay. I called the lender and asked them if I am okay with keeping the house since I am up to date, they replied that they will not be taking the house as I am current on my mortgage. Though this attorney has a court date for an appearance in 2 weeks for the release of stay. Will they stop this from happening once the lender notifies the attorney that I am now current on my payments? Now, I'm terrified that I'm going to lose my home....Please advise. Thank you so much!

Answer: It is common to get this motion. if you sign a reaffirmation, you will stay liable for the payments. if you stay current, you should be fine. The motion is just to remove the court protection, you can deal with them directly from that point on.

Subject: Bankruptcy and Marriage
Question: My girlfriend filed for bankruptcy (chapter 13 in Florida) one year ago and now we want to get married in the next year. Will her bankruptcy impact my financial status and will her payments change due to her change in marital status? Thanks for your assistance.

Answer: Everything should stay the same, but she should check with her lawyer in case there are local rules that may say otherwise (I'm in IL)

Subject: disbarment
Question: I know the state laws vary, but in general, is an attorney disbarred if he/she files for personal bankruptcy? Thanks -

Answer: Nope.

Subject: Taxes and Bankruptcy
Question: If someone owe tax money (state and federal, student loans) and get into chapter 13 to force a payment plan. How can the person calculate how much is going to pay? What determine the amount to pay? Do all the debt have to be paid on the years of the bankruptcy?
Thank you

Answer: taxes that are less than 3 years old are paid 100% thru a chapter 13. If older, you might be able to pay them at a discounted rate with your other unsecured creditors. this can be as low as 10% and up to 100% based on your assets and your income.
Student loans are non-dischargeable, so they would also be paid 10%-100% based on the same issues above, but the balance that doesn't get paid, you will still owe after the case is done.
Speak to a local bankruptcy attorney (I'm in Illinois) to discuss your case and repayment plan.

Subject: Motion to dismiss Chapter 13
Question: I filed for Chapter 13 almost one year ago, and in the past few months have been unable to make my monthly payments to my trustee. I just received the motion to dismiss my bankruptcy, and I don't have the money to bring my case current. I am making less money than when I filed (about $3,500 less per year). Does this affect anything? Should I just call my trustee and try to work something out (paying as much as I can today?) Or am I out of luck if I can't pay the $2,100 I owe right now? I have no one I can ask for help. What happens if my case is dismissed? I have no property and no car loans, etc.

Answer: You would need to discuss with your lawyer about bringing a motion to modify plan/defer default. Otherwise, you can possibly convert, depending on the reasons you were in chapter13. If dismissed, you might be able to refile again.

Subject: civil suit
Question "My situation is this: Filed bankruptcy rel, 01-07. Tried to save the home and didn't include it in the bankruptcy. Spouse left, Divorced 05-07, With three children and two mortgages, one income, I could not maintain payments, tried to re-finance, no one would. Let the home foreclose, 1st mortgage co. took possession of the property, 2nd company is suing me for the entire amount plus costs, etc. I have no assets left, no disposable income and if they win judgment and garnish my wages I will be forced to quit my job and move. Or something drastic. I answered the complaint, but with no defense, they filed a motion for Summary disposition in their favor. What can I do?"


Answer: You indicated you 'did not list' the home in bankruptcy.
1. You were supposed to list all assets and all debts.
2. if you listed both mortgages and did not reaffirm, then the debt is discharged in the case.
3. if you reaffirmed the debt, then you are on the hook.
Talk to your bankruptcy lawyer to see how the debts were listed, if they were at all. If they were not listed, then they were not discharged.
4. Perhaps, if the court will allow, you can file a motion to reopen the case, to file the amended schedules to list the home. This is up to the judge, and there are reopen and amendment fees.

Subject: CHAPTER 7
Question: I FILED 2.5 YEARS AGO I SIGNED A LETTER OF Re-Affirmation. I'VE DISCHARGED LATER FINDING OUT THAT MORTGAGE COMPANY NEVER FILED IT IT WITH THE COURTS AFTER CALLING THE BANK THEY TOLD ME THAT I WAS JUST PAYING RENT I HAVE NOT MISS A PAYMENT UNTIL I QUIT PAYING ON THE HOUSE THAT WAS NOT MINE I HAVE INVESTED A LOT OF MONEY IN TO THE HOUSE ROOF WINDOWS AND LOT MORE DO I HAVE ANT LEGAL ACTION IN THIS MATTER

Answer: if you want to keep the property, you need to keep making the regular payments and stay current. You can also refinance it with another lender, which you would then be 'on the hook' for the loan.

Subject: small claims and bankruptcy
Question: I has two small claim judgments that stemmed from 2 credit card accounts. These judgments and credit cards were discharged on my chapter 7 bankruptcy.
The small claims judgments are still open and the courts wont close them. what do I do to get them closed? and also one of the attorneys on one of the suits cannot be found anywhere.? any way to fix this..?

Answer: You can contact the court clerk to properly report the debt as discharged. Also you can contact the credit bureau's to fix any errors.

Subject: Bankruptcy and Divorce
Question: I recently filed for Chapter 7 (September 17, 2008). I am currently separated and legally married. I filed as an individual for the bankruptcy.

My wife called me yesterday and wants to file for divorce (Uncontested without minor children). She might of overreacted due to receiving a letter from the BK court stating that she is listed as a creditor.

Will this effect my bankruptcy. I have my creditors meeting on October 31.
Can you have to cases at the same time?

Should I see if she can stall filing until after my discharge in January or does it matter?

Thank you so much for your time and attention to my question.



Answer: It should not effect your case.
You can start the divorce proceeding at any time.
The divorce decree will allocate joint debts, so be sure that you understand which debts you will be responsible for after the divorce (the bankruptcy won't remove her responsibility for the debts)

Subject: Bankruptcy
Question: A relative died several months before I filed bankruptcy. I found out later that I may receive an inheritance. At the time filing and at the time of my hearing it was unknown if there would be any money to be received. If there is, do I have to turn this over to my creditors?

Answer: Inheritances have to be disclosed to the trustee and court for 6 months after you file the case. Provide this information, and the trustee will decide (based on your allowable state/federal exemptions) if they want to liquidate the inheritance to pay to your unsecured creditors. Failure to report this can result in your discharge being revoked

Subject: Realize debts not listed on schedule after hearing
Question: My wife and I filed CH. 7 on 8/27/08, and had our hearing on 9/23/08. A day or two after the hearing we had calls from collection agency and noticed that this specific debt was not listed on our schedule of debts. After closer examination we realized there were other debts not listed. How can we go about getting these debts listed and still be able to get the bk discharged??

Answer: You can amend the schedules with the bankruptcy clerk. Send notice to the trustee and to the creditors. That should do it. Talk to your lawyer, as this is a really simple process that they can handle for you.

Bankruptcy Q&A rapid fire

Time for rapid fire Bankruptcy Q&A again.
PLEASE REMEMBER STATE LAWS DIFFER. SPEAK TO YOUR OWN ATTORNEY. THIS IS NOT LEGAL ADVICE BASED ON YOUR CASE.

Subject: Chapter 7 waiting 8 years
Question: QUESTION: I filed a Chapter 7 for just myself in 03/01, discharged in 07/01. I just filed today for a Joint Chapter 7 and found out I have to wait 8 years in between filing. Any exceptions or way to get around the waiting period? Thanks...

ANSWER: Nope, your case will be dismissed, or else you can move to convert your case to Chapter 13 which is allowed. That is a repayment plan.

---------- FOLLOW-UP ----------

QUESTION: Thanks, that's what I've found I could do. Too much past consumer debts to do Chapter 13. With my wife on the petition can it proceed and I withdraw my name from it? Thanks...

Answer: Ah, good point. You can bring a motion to dismiss yourself as a party and keep her in the chapter 7. That should be approved.


Subject: amendment to bankrupcty
Question: Hi: I just went before the court yesterday, regarding my case. I need to amend it. How long do I have before it's too late to file this amendment?

Answer: Normally, for chapter 7 you can amend up until the discharge, which will be approx. 60 days if you just had your hearing, but it is best to file them right away.

Subject: Mortgage Forbearance and Chapter 7
Question: My husband and I are filing Chapter 7 but are going to keep our house. We are not behind on our payments but I am thinking of contacting our mortgage servicer to ask for a temporary forbearance. We have not filed ch 7 yet but will in the next month. If I make a temporary forbearance what effect does it have when we go to court?

Answer: Be careful, many times, the forbearance is accelerated once a bankruptcy case is filed. Otherwise, you need to stay current if there is no such provision. Be sure to advise the lender of your upcoming BK.

Subject: Chap 7 vs 13
Question: I filed a chapter 7 in 05 did not include all my credit cards. Since then I have lost my job My husband did not file with me at the time. We have bills together now and can not make it .He lost his job also. Can we go back and file since I did indivisual in 05

Answer: You can only do chapter 7 every 8 years, so if you want to file, then Chapter 13 is your only available option. your husband can do chapter 7 if he has not filed in the last 8 years.

Subject: Bankruptcy 13-kicked out or quit
Question: I have been in ch. 13 for 2yrs.What will happen if i let them dismiss my case?All my debt is unsecured..Thanks.

Answer: The creditors can start to collect on the unpaid balances again.

Subject: 2nd mortgage
Question: QUESTION: My second mortgage is my concern in bankruptcy.
The second mortgage has already been written off according all three credit bureaus. My house is barely worth the second mortgage much less the second second mortgage. How can I or what steps in my hearing Sept 30 2008 for chapter 7 can i take to be rid of this second mortgage?

ANSWER: The 2nd mortgage is a lien on your home, so it must be paid if you wish to keep your home. if you are surrendering the home in bankruptcy, they will be discharged, and would be paid out of any of the proceeds of the sale (if any).

---------- FOLLOW-UP ----------

QUESTION: My first mtg is ok and i want to keep the house. The second Mortgage has been written off prior to the bankruptcy by the other mortgage company. It still shows up on the credit bureaus as written off. What happens to the second Mortgage. Value of the house is $109000...owe $107000 or first mortgage and $46000 on the second mortgage
that was written off.

Answer: It is still a lien on your home, that clouds title in the event of transfer or sale.

Subject: income received after bankruptcy closed
Question: if i file a chapter 7 bankruptcy, is it possible for any of the creditors included in that bankruptcy to reach income that i earn, inherit, or otherwise acquire after the bankruptcy closes? once my bankruptcy is final, i'd like to sell my long term disability policy and convert my monthly payments to a lump sum. thanks.

Answer: You have to disclose inheritances to the court for liquidation for 6 months after your case.
You can liquidate your assets after you are discharged to do what you want with them.

Subject: Tuition in Collections
Question: Hello,

I have an unpaid tuition bill that has been presented to collections for a semester in which I dropped out of school in 2005. The entire bill is $3538 - which includes $1974 in tuition fees $205 in tickets $474.50 in fees and $884.50 in collection cost - as of this point $116 has been collected from my state taxes leaving a balance of $3421.15 - My issue is - since my original balance of tuition and tickets cost is only $2180 - Question #1: Can I attempt to settle on the remaining fees/collection cost of $1360 - Question 2: Is there not a percentage in which I can only be charged up to on the fees/collection costs as they have charged me up to 62% of the original balance - Question 3: At this point is it best if I attempt to hire an lawyer to assist me in settling this debt and since the cost is so low is it feasible for me to believe a lawyer will attempt to assist me with this issue?


Answer: It would be best to negotiate with the lenders as Tuition and tickets are non-dischargeable in bankruptcy.
All interest and collection costs are also not discharged.
1. You can settle anything if you can get the lender to agree to it.
2. state and federal law may govern. I practice bankruptcy only and do not know.
3. your call. You can pay an attorney to negotiate for you, or you can try it your self. I've seen results both ways.
4. You shouldn't give poor scores when you ask a bankruptcy attorney a non-bankruptcy set of questions. Please revise.

Subject: Withdrawl-401 K- while in Chapter 13
Question: Hello,

I was wondering if it would be possible to withdrawal my 401 K of $5,000 while I'm in Chapter 13..Just went to court on Thursday and already started making the chapter 13 payments? I qualify through the 401 K to withdrawal since I got laid off from my job. I'm going to open a home daycare and need the money to get it prepared...Do I need to ask the Trustee prior to doing so? Do they need to be informed? Will they take it if I withdraw it.

Answer: You don't need to get permission in most cases, however, you may need permission if you need to modify your plan to afford payments, etc. So talk with your lawyer about the best plan of attack.

Subject: Ex husband had lien on house filed bankruptcy
Question: My fiancées ex husband had a lien placed on the house from a creditor for a car payment that he didn’t pay it went on for years and ended up being a $27,000 lien placed on the property after she filed for divorce. In the divorce settlement he said that he would take care of the debt since it was his. After the divorce he filed bankruptcy and had the amount included in his bankruptcy but he got to keep the car that caused the lien, his attorney filed a stipulated order to redeem vehicle. He told his ex wife that he had the lien taken care of since the company settled with him. Recently she tried to refinance the house and found out that the lien was still on the property and would have to be paid from the refinance. Is there any recourse for her? Does she have to pay the lien?

Answer: She can enforce the divorce decree to have him pay it. She'll have to do that thru the divorce court.

Subject: Will I be able to Keep my vehicle?
Question: I filed for chapter 7 bankruptcy relief on Sep. 9, 2008. At the time that I filed, I was behind on a few payments to the finance company for my vehicle and requested reaffirmation. The finance company has filed to lift the stay. Will I be able to keep my vehicle?

Answer: Maybe. You need to bring the loan current, or have the loan re-written with the reaffirmation agreement. Otherwise, once the stay is lifted, they can repossess the car if they choose.

October 1, 2008 Median Income Level Illinois

State 1 earner 2 People 3 People 4 People *

Alabama $35,507 $44,922 $51,130 $61,586
Alaska $47,501 $68,904 $69,414 $88,361
Arizona $41,792 $55,489 $59,709 $69,210
Arkansas $32,380 $43,755 $47,101 $54,721
California $47,363 $62,690 $68,070 $77,014
Colorado $45,036 $63,240 $68,219 $75,987
Connecticut $55,379 $68,208 $82,160 $99,584
Delaware $44,479 $58,501 $74,320 $76,085
DC $40,774 $70,035 $70,035 $70,035
Florida $40,898 $51,945 $57,937 $68,494
Georgia $39,253 $52,055 $59,668 $68,908
Hawaii $50,832 $63,778 $70,481 $85,577
Idaho $39,397 $50,025 $52,613 $64,464
Illinois $45,604 $57,829 $66,189 $78,182
Indiana $40,155 $51,203 $58,902 $67,911
Iowa $39,851 $52,608 $61,526 $71,309
Kansas $39,488 $54,070 $60,906 $71,867
Kentucky $35,274 $43,793 $53,343 $63,097
Louisiana $35,579 $45,013 $50,682 $64,170
Maine $39,116 $50,140 $61,963 $67,136
Maryland $53,489 $71,213 $81,811 $99,884
Massachusetts $52,814 $63,980 $80,031 $96,572
Michigan $43,050 $51,594 $60,997 $73,490
Minnesota $45,832 $59,778 $72,808 $84,394
Mississippi $31,152 $40,383 $44,752 $53,697
Missouri $38,100 $49,704 $56,311 $67,761
Montana $38,024 $50,844 $50,844 $62,765
Nebraska $36,405 $51,477 $60,491 $69,510
Nevada $46,412 $58,318 $63,351 $71,972
New Hampshire $53,704 $63,320 $74,161 $89,740
New Jersey $55,008 $67,270 $82,239 $99,224
New Mexico $34,585 $46,907 $51,058 $53,938
New York $44,803 $54,898 $65,477 $79,966
North Carolina $37,055 $50,419 $55,182 $67,541
North Dakota $36,813 $51,415 $65,143 $69,098
Ohio $40,888 $50,965 $59,949 $71,489
Oklahoma $36,830 $49,424 $52,479 $59,755
Oregon $43,506 $54,235 $58,789 $70,046
Pennsylvania $43,036 $51,051 $64,775 $75,867
Rhode Island $44,748 $57,121 $70,117 $88,035
South Carolina $37,296 $48,944 $52,806 $63,535
South Dakota $34,219 $49,180 $55,985 $66,451
Tennessee $36,308 $46,927 $53,149 $62,226
Texas $37,120 $52,878 $54,943 $63,945
Utah $47,026 $54,715 $61,437 $69,260
Vermont $39,365 $56,318 $61,934 $73,130
Virginia $47,852 $62,926 $70,485 $82,598
Washington $48,783 $61,172 $67,004 $79,397
West Virginia $37,275 $41,280 $49,111 $57,552
Wisconsin $41,233 $55,525 $64,622 $74,885
Wyoming $44,554 $58,207 $66,033 $77,432


For cases filed on or after April 1, 2007, add $6,900 for each individual in excess of 4.

Refiling Chapter 13 in IL

A client just asked me today about the chances of refiling another chapter 13 once their current case gets dismissed for lack of payments to the trustee toward their plan.


A debtor can refile at any time once the first case is dismissed if the debtor did not voluntarily dismiss the case (assuming the judge didn't bar them for 6 months).
There are only 2 trustee's in cook county, 1 in rockford, and 1 in the collar counties, so the chances are good that the debtor would get the same trustee. Cook county has a handful of judges, but the surrounding counties you'll have the same judge in the 2nd case.

Speak to a lawyer as you lose protection against your creditors after 30 days with a 2nd chapter 13 in a years time. If this would be case #3, you get no protection upon filing. This protection can be extended by motion though however. As long as you can show the court a positive change in circumstances, then you will have a great chance at getting the 2nd case confirmed with the court.

Cosigner responsibility

I was recently asked how a bankruptcy affects a cosigner.

Question: Hello. I filed for bankruptcy and was discharged a year and a half ago. At the time I had a car lease that was paid to date, but was still a part of my bankruptcy. (My lawyer advised me to turn in the vehicle so that I would not be responsible for extra fees and/or other things) My mother co-signed on this loan for me. My mother received a letter from the lender stating she owed them money for the return of the vehicle and for them to resell the vehicle. I have also received letters recently stating that money is owed. Is there a certain amount of time that these creditors can come after co-signers for the payment of things like this? I do not want my mom's credit to be affected by something like this and hope to resolve this situation as soon as possible. I look forward to hearing your answer.

Answer: Regardless of what you did in your case, your mom, as a cosigner can be held to the contract that she signed with the lender. If you turned in the vehicle early, then she would be responsible for the balance of the lease, minus what the creditor recouped in the resale. Mom would need to read the car loan contract for her responsibilities,as the creditor can always go after her to collect on what is still owed. Unfortunately, that is why creditors get cosigners, so that when one party doesn't pay, they can collect from the other. Unfortunately, the only thing that the bankruptcy did, is discharged your obligation, it doesn't discharge a cosigner's obligation.

Mortgage Fraud

Here is an article I saw today at Chicagotribune.com that tells of the recent charges filed in a huge mortgage fraud scheme. I touched on it in my earlier post here when I talked about the mortgage fraud seminar I attended a few months ago.

67 from Chicago area charged in U.S. mortgage fraud probe

By Jeff Coen and Todd Lighty | Tribune reporters
1:37 PM CDT, June 19, 2008

Federal authorities in Chicago this afternoon announced charges against 67 people in a sweeping investigation of mortgage fraud with national reach.

The U.S. attorney's office in Chicago said the dozens arrested here as part of Operation Malicious Mortgage include local mortgage brokers, loan officers, Realtors, home builders and lawyers.

A press conference was scheduled for 1 p.m. to discuss the charges, which include mortgage fraud, identity theft and bankruptcy fraud.

Federal prosecutors said the cases involve more than $170 million in fraudulently obtained home mortgages.

Across the country, prosecutors said 406 people have been charged in 144 prosecutions as part of the national effort. The FBI estimated losses at $1 billion.

"Mortgage fraud inflicts serious damage upon financial institutions but, more importantly, makes life more difficult for ordinary citizens," U.S. Atty. Patrick Fitzgerald said in a statement. "These crimes, on the scale being addressed today, cause banks and lending companies, which have been saddled with huge numbers of fraudulent mortgages, to tighten their lending practices and adjust the cost of doing business."
Read full article here.

Barack Obama discusses bankruptcy and debt

Here is an article from suntimes.com that follows up on yesterday's post about the candidates' views on debt, the economy, and bankruptcy.

Obama has round-table talk on South Side

June 12, 2008
BY ABDON M. PALLASCH

Democratic White House hopeful Barack Obama held a round-table talk today on the South Side with three consumers gouged by credit card companies.

“For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford,” Obama said.

The credit card companies start with teaser rates of four percent, then jack them up to 30 percent, lower customers’ credit limits so they can then charge interest, late fees and over-the-limit fees on them, said Obama and Elizabeth Warren, a Harvard Law School professor who participated in the event.

Obama said he knew only too well how easy it was to get caught by deceptive credit card deals: In the interest of full disclosure, I've gone through this. I've had credit cards, Obama said.


Obama's Republican rival, Arizona Sen. John McCain, has been on the other side of bills on which Obama fought for consumer rights, such as the bankruptcy bill, Obama said. The bill made it harder for consumers drowning in credit card debt to seek refuge in bankruptcy, Obama said.

I fought this bill hard, as many of my colleagues did as well, Obama said. Ultimately it passed. It was jammed through. John McCain was strongly supportive of this bill.

Obama acknowledged that, Part of why our debt crisis is so bad is that some folks are making reckless decisions -- racking up big credit card bills by purchasing flat-screen TVs and other luxury goods that they know they can't afford. But he said the credit card companies are pushing many responsible consumers into inescapable debt.

He proposes a Credit Card Bill of Rights that bans the companies from unilaterally changing rates, especially on past debt; and a ban on charging interest on late fees.



We've heard three examples of what I think most people would say is grossly unfair, but this is not atypical, Obama said after the three told their stories at the Illinois Institute of Technology.

Ironically, Obama's national finance chair, Penny Pritzker, headed up a Chicago-area bank that critics said was a pioneer in predatory lending: Superior. The campaign said Pritzker and her family voluntarily paid $460 million to clear up the banks debts, though that still left 1,400 customers without some of their savings.

McCain's campaign charged that the man who, until today, headed up Obama’s vice-presidential search team, James Johnson, got special mortgage rates from his friend’s bank, Countryside, another sub-prime lender.

“On the same day Barack Obama is staring down headlines about the head of his VP selection committee’s inappropriate ties to a predatory lender, Obama launches blind political attacks against John McCain for voting for the bipartisan Senate Bankruptcy Bill that was actually supported by 18 Democrats,” said McCain spokesman Tucker Bounds.
See rest of article here.

Presidential Candidates views on Bankruptcy

Here is an excerpt from Barack Obama's webpage, detailing bankruptcy.

Reform Bankruptcy Laws

Obama will reform our bankruptcy laws to protect working people, ban executive bonuses for bankrupt companies, and require disclosure of all pension investments.

* Cap Outlandish Interest Rates on Payday Loans and Improve Disclosure: Obama supports extending a 36 percent interest cap to all Americans. Obama will require lenders to provide clear and simplified information about loan fees, payments and penalties, which is why he'll require lenders to provide this information during the application process.
* Encourage Responsible Lending Institutions to Make Small Consumer Loans: Obama will encourage banks, credit unions and Community Development Financial Institutions to provide affordable short-term and small-dollar loans and to drive unscrupulous lenders out of business.
* Reform Bankruptcy Laws to Protect Families Facing a Medical Crisis: Obama will create an exemption in bankruptcy law for individuals who can prove they filed for bankruptcy because of medical expenses. This exemption will create a process that forgives the debt and lets the individuals get back on their feet.


John McCain does not directly address bankruptcy on his John McCain website.

Helping Americans Confront Higher Living Costs:

John McCain Will Help Americans Hurting From High Gasoline And Food Costs. Americans need relief right now from high gas prices. John McCain will act immediately to reduce the pain of high gas prices.

John McCain Believes We Should Institute A Summer Gas Tax Holiday. Hard-working American families are suffering from higher gasoline prices. John McCain calls on Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.

John McCain Is Proposing A New "HOME Plan" To Provide Robust, Timely And Targeted Help To Those Hurt By The Housing Crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.

Eligibility: Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.

How It Works: An individual picks up a form at any Post Office and apply for a HOME loan. The FHA HOME Office certifies that the individual is qualified and contacts the individual's mortgage servicer. The mortgage servicer writes down and retires the existing loan, which is replaced by an FHA guaranteed HOME loan from a lender.

John McCain Calls For The Immediate Formation Of A Justice Department Mortgage Abuse Task Force. The Task Force will aggressively investigate potential criminal wrongdoing in the mortgage industry and bring to justice any who violated the law. The DOJ Task Force will offer assistance to State Attorneys General who are investigating abusive lending practices.

Keeping The Credit Crunch From Hurting College Students:

John McCain Is Proposing A Student Loan Continuity Plan. Students face the possibility that the credit crunch will disrupt loans for the fall semester. John McCain calls on the federal government and the 50 governors to anticipate loan problems and expand the lender-of-last resort capabilities for each state's guarantee agency.

Let it be known that Obama voted against the bankruptcy reform in 2005, while McCain voted for the reform.

Most bankruptcy cases per capita

Here are the leading (perhaps not the best term to use) states based on bankruptcy filings per 1000 people.


1. Tennessee 6.70
2. Georgia 5.45
3. Alabama 5.29
4. Illinois 5.16 (total residents 12,831,970 - est. filers 66,213)
5. Michigan 4.82

Can Student loans be discharged in bankruptcy?

Generally, the answer is NO. Student loans and any debt for educational purposes are not discharged in bankruptcy. There was an exception, where you could ask the court to determine that the student loan was an undue hardship, but this was a very narrow exception. I have only seen 2 or 3 instances where a debtor was successful in this argument. The prevailing case law in this matter, is In RE Brunner.
831 F.2d 395 42 Ed. Law Rep. 535, Bankr. L. Rep. P 72,025 (Cite as: 831 F.2d 395)

The 3 prong test states:
Based on legislative history and the decisions of other district and bankruptcy courts, the district court adopted a standard for "undue hardship" requiring a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans. For the reasons set forth in the district court's order, we adopt this analysis. The first part of this test has been applied frequently as the minimum necessary to establish "undue hardship." See, e.g., Bryant v. Pennsylvania Higher Educ. Assistance Agency (In re Bryant), 72 B.R. 913, 915 (Bankr.E.D.Pa.1987); North Dakota State Bd. of Higher Educ. v. Frech (In re Frech), 62 B.R. 235 (Bankr.D.Minn.1986); Marion v. Pennsylvania Higher Educ. Assistance Agency (In re Marion), 61 B.R. 815 (Bankr.W.D.Pa.1986). Requiring such a showing comports with common sense as well.

The further showing required by part two of the test is also reasonable in light of the clear congressional intent exhibited in section 523(a)(8) to make the discharge of student loans more difficult than that of other nonexcepted debt. Predicting future income is, as the district court noted, problematic. Requiring evidence not only of current inability to pay but also of additional, exceptional circumstances, strongly suggestive of continuing inability to repay over an extended period of time, more reliably guarantees that the hardship presented is "undue."

US Trustee to get pay advices in all cases

Get your scanners and copiers warmed up folks....

As noted in emails from the court and on the Northern District of Illinois Bankruptcy Court homepage:

GENERAL ORDER No. 08-01

IMPORTANT NOTICE REGARDING PAY ADVICES
The Court’s Standing Order Regarding Filing of Payment Advices effective October 17, 2005 has been replaced effective June 23, 2008 by General Order No. 08-01 Regarding Pay Advices. For all Chapter 7 cases filed on or after June 23, 2008, pay advices must be provided to the United States Trustee, in addition to the case trustee and any creditor who timely requests copies. The current Standing Order Regarding Filing of Payment Advices applies to all cases filed on or before June 22, 2008.

With all of the record keeping and piles of paper that this will generate...I can only assume that the court filing fee will increase shortly.....

Celebrities who have filed bankruptcy

Here is a list of celebrities that have filed bankruptcy in the past

Abraham Lincoln

Benedict Arnold

John James Audubon

P.T. Barnum

John Barrymore

Kim Basinger

Frank Baum

John Wayne Bobbitt

Bjorn Borg

Lorraine Bracco

Toni Braxton

Lenny Bruce

Buffalo Bill

Gary Burghoff

Tia Carrere

Nell Carter

George Clinton

Samuel L. Clemens ("Mark Twain")

Natalie Cole

Gary Coleman

Francis Ford Coppola

David Crosby

Aleister Crowley

Vic Damone

Dorothy Dandridge

Daniel Defoe

Lee De Forest

John DeLorean

Walt Disney

Eddie Fisher

Mick Fleetwood

Heidi Fleiss

Henry Ford

Red Foxx

Zsa Zsa Gabor

Marvin Gaye

Andy Gibb

Gary Glitter

Charles Goodyear

Ulysses S. Grant

Bob Guccione

Johannes Gutenberg

Tony Gwynn

Merle Haggard

Corey Haim

Dorothy Hamill

M.C. Hammer

Isaac Hayes

Margaux Hemingway

Sherman Hemsley

Milton Snavely Hershey

Steve Howe

La Toya Jackson

Don Johnson

Chaka Kahn

Buster Keaton

Margot Kidder

Larry King

Marion "Suge" Knight

Lorenzo Lamas

Cyndi Lauper

Stan Lee

Jerry Lewis

Jerry Lee Lewis

Meat Loaf

Jackie Mason

Mindy McCready

William McKinley

Willie Nelson

Wayne Newton

Ted Nugent

Thomas Paine

Tom Petty

Gaylord Perry

Susan Powter

Randy Quaid

Lynn Redgrave

Burt Reynolds

Debbie Reynolds

Mickey Rooney

Billy Sims

Tom Sizemore

Anna Nicole Smith

Dee Snider

Lynne Spears

Leon Spinks

Sheryl Swoopes

Lawrence Taylor

Donald Trump

Mike Tyson

Johnny Unitas

Oscar Wilde

Tammy Wynette

Bankruptcy FAQ

BANKRUPTCY FAQ

1. WHAT EXACTLY IS A BANKRUPTCY? Bankruptcy is a federal created program designed to help consumers eliminate their debts or repay them under the protection of the bankruptcy court. 2. WHAT ARE THE MOST COMMON REASONS FOR FILING A CHAPTER 7 BANKRUPTCY? The most common reasons for consumer bankruptcy are: unemployment, high medical expenses, over-extended credit, marital problems and other large unexpected expenses. 3. CAN I KEEP MY HOUSE, CAR & PERSONAL BELONGINGS IF I FILE A CHAPTER 7? You can keep your house and your car as long as there is no equity in the house or vehicle and you are current on your loan payments, if any. In most cases you are able to keep all of your personal belongings. Illinois law allows you exemptions to protect most property from creditors. Consult an attorney at Leeders & Associates, Ltd. to discuss how the Illinois bankruptcy exemptions can protect your belongings. 4. CAN I KEEP ANY CREDIT CARDS OR FINANCED ITEMS? Generally you cannot keep your credit cards. However, some creditors will let you keep your credit cards or financed items if you reaffirm the debt and make payments to that creditor after your bankruptcy is discharged. 5. DO YOU HAVE TO HAVE A CERTAIN AMOUNT OF DEBT TO FILE? There is no statutory amount of debt that is needed to file a bankruptcy. 6. WHAT TYPES OF DEBT ARE NOT ELIMINATED IN A CHAPTER 7? Non-dischargeable debts such as student loans, parking tickets, government debts, child support and alimony, some IRS debts and fraudulent debts. Some exceptions do apply. Consult with a Leeders & Associates, Ltd. attorney to find out your legal rights. 7. WHAT ARE THE MOST COMMON REASONS FOR A CHAPTER 13 BANKRUPTCY? The most common reasons to file a Chapter 13 bankruptcy are: stop foreclosure, save your car, save your business, debt consolidation, repay student loans, IRS debt and other non-dischargeable debts and for those who have filed a Chapter 7 Bankruptcy in the last 8 years. 8. WHAT IS THE DIFFERENCE BETWEEN CHAPTER 7 & CHAPTER 13? Chapter 7 is designed to eliminate unsecured debts. Chapter 13 is designed to repay your creditors and keep your assets such as your car or home based on your ability to repay your debts. A Chicago bankruptcy attorney from Leeders & Associates, Ltd. can help you choose which chapter is best for you. 9. WILL I EVER GET CREDIT AGAIN? After your bankruptcy is discharged you will be able to get credit again. Often you are able to finance a vehicle as soon as your bankruptcy case is discharged. You are able to apply for and get credit cards and personal loans once you receive your discharge. Qualified applicants are able to buy homes within 1-2 years of receiving their bankruptcy discharge. 10. HOW LONG DOES A BANKRUPTCY STAY ON MY CREDIT REPORT? A Bankruptcy may remain on your credit report for 10 years after your bankruptcy case is discharged. However, you may be able to get credit during that time.

When can I file Bankruptcy again?

Bankruptcy Law Question:

Subject: Filed as individual 3 years ago

Question:
Hi. About 3 years ago I filed chapter 7 as an individual because I wasn't married. Now i'm married and unfortunately got myself into some more debt. Can I file again because my status has changed or do I still have to wait the 8 years?

Answer:
Hi. Unfortunately, you cannot file chapter 7 bankruptcy again until 8 years from the date you filed previously. Your option at this point is to file chapter 13 bankruptcy, where you can pay back at least a portion of the debt. However, if your previous bankruptcy was filed less than 4 years ago, you would not get a discharge at the end of the chapter 13. You should consider waiting until at least 4 years from the date you filed your chapter 7 bankruptcy, that way, you will get a discharge under the chapter 13 bankruptcy when you complete the debt repayment plan.

Save some money, free entertainment

With the ever increasing gasoline and food expenses, my clients and consumers both should take advantage of the many free (or relatively cheap) things to do this Summer.

Here is a quick list of ideas.

1. The beach. Chicago has many beaches to choose from in the city and suburbs. This article from the Red Eye Chicago Paper has a listing of the best features for the top beaches in Chicago.

2. The Art Institute of Chicago. 111 S Michigan Ave, Chicago, IL
Free to the public on Thursday evenings from 5pm to 8pm.

3. Lincoln Park Zoo. 2200 N Cannon Dr Chicago, IL 60614. Free admission.

4. Movies in the park. various locations. free. See Spiderman 3, Bee Movie, ET, Jaws, The Great Debaters, Hairspray and more. Bring your popcorn!

5. Free concerts at the Taste of Chicago Enjoy free concerts by Stevie Wonder, Plain White T's, Joss Stone, Fantasia, Bonnie Raitt, Chaka Khan and more.

Financial advice and tips

I recently stumbled upon a very useful and insightful Blog Managing Personal Finance
run by Devray. By profession, she is a consultant in Personal Banking for several years. She works for Debt Consolidation. She does a lot of reading and research on these subjects. The materials that you read are the result of interactions with finance experts, customer feedbacks, experiences and a lot of exploration of the subjects. So feel free to dig in and explore the vast wealth of information provided here.

They're Back.....Audits That is....

May 9, 2008
As mandated in Section 603(a) of Public Law 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the United States Trustee Program (USTP) established procedures to audit petitions, schedules, and other information in consumer bankruptcy cases filed on or after October 20, 2006. Pursuant to 28 U.S.C. § 586(f), the USTP contracted with independent accounting firms to perform audits in cases designated by the USTP.

In January 2008, the USTP temporarily suspended its designation of cases subject to audit for budgetary reasons. The USTP is preparing to resume its designation of cases, although random audits will now be conducted in 1 out of 1,000 cases (as opposed to 1:250 cases) filed in a judicial district. The USTP will resume its designation of cases subject to audit effective May 12, 2008.

Bankruptcy Exemptions for retirement accounts in IL, reaffirming car lease and home

Subject:	assets in bk
Question:	are both 401K's and IRA's exempt from chpt 7 in IL? Also, while credit is still in good standing can I lease a new vehicle getting a good interest rate and not have to list them a debtor? What happens to my house if it has no equity but I continue making the payments on time.
Answer:	Yes, there are exemptions for IRA's and 401k in IL to protect them 100% in IL. All debts, including leases must be listed in the case, but you can choose to assume the lease, keep making payments, and keep the vehicle in chapter 7. If you have no equity in the home, are current on the payments, you can reaffirm the debt to allow you to keep the property after bankruptcy. If you would like a free consultation to meet with me, I'd be happy to set that up. Please contact me at the phone/email in my profile. Thanks. Terry Leeders

northern district of Illinois bankruptcy statistics

2008	Jan	Feb	Mar	Apr	Total
Ch7	1602	1951	2296	2502	8351
Ch11	10	10	11	47	78
Ch13	964	962	961	1124	4011
Total	2576	2923	3268	3673	12440
increase	35%	37%	29%	54%
from 2007

Here are recently published figures for bankruptcy filings for Chapter 7, Chapter 11, Chapter 13 in the Northern District of Illinois. (no chapter 12 cases were filed)
As you can see, the numbers have bounced back and increased significantly over last years figures. This can be associated with increased foreclosures, downturn in the economy, and the increasing unemployment rate.

bankruptcy motion to compel trustee to assume 3rd party contract

Recent court of appeals bankruptcy decision:

7th Circuit Cases
Civil - Bankruptcy
Chiplease, Inc. v. Steinberg, No. 07-1879 (5/15/08). Appeal, N.D. Ill., E. Div. Aff?d.
Dist. Ct. did not err in affirming Bankruptcy Ct. order that denied plaintiff's motion to compel Trustee to assume debtor's contract with third-party and to assign debtor's rights in contract to plaintiff. Record showed that debtor's right to renew terms of contract had expired, and thus Trustee's assumption of contract would have subjected Trustee to sanctions under Fed. R. Bankr. P. 9011.

Keeping a corporate credit card after bankruptcy?

Subject:	Chapter 7 & Corporate Credit Card
Question:	My husband and I are reviewing our options but need to find out if his corporate American Express card (which is paid in full each month) would be included in a discharge. The card is tied to his SS number, but is tied to his job. If this card were to be included, he would be unable to keep his job because he travels alot. How can we find out with 200% certainty that he could keep his card?
Answer:	If there is a balance, then it would need to be included if he was the signer on the original application. If he is just an 'authorized user' on a corporate account, or if there is a zero balance, then it would not need to be listed. (if they send the bill to him, then it is his debt, and not an authorized user) Then, after bankruptcy, it will be up to the lender if they wish to let him keep the account, unfortunately, most do not, even with a zero balance, but check with AMEX to be sure.

Active Duty -Bankruptcy reform bill

House Panel Markups Focus on Bankruptcy Relief for Active Duty Military
The House Judiciary Committee today will mark up H.R. 4044, a bill that would exempt military reservists called to active duty and certain others from application of the means test in chapter 7.

Stay tuned for further details.....

filing multiple bankruptcy cases

Subject: filing chapter 7 again
Question: Hello,

I want to know if I was discharged from a chapter 7 in 2003 or 2004, can I in 08 file again for a chapter 7 due to a hardship, it would be for a car for 20,500 i also have a credit card that i probably would keep with limit at 1,000 and payments are only 30 a month. I'm also a authorized user for my mom's AMEX and the is on my credit-what will happen to that? I just can't afford paying the vehicle it anymore. I have tried to trade and sell and because of the neg equity and economy no wants to buy. I live in Georgia, is this possible? What is my next step? Please help! Thanks in advance

Answer:
Chapter 7 is only available again 8 years from the date you filed your last chapter 7. So, here, you would be able to file Chapter 13. With a chapter 13, you can pay back anywhere from 10% and up based on your income and your assets. Speak to a local attorney to help calculate your monthly payment.

Bankruptcy and Divorce

Subject: Divorce Decree Judgment and Bankruptcy
Question: My husband ex wife has done everything in her power to make our life miserable. I have a couple questions. Fist.. can you amend a bankruptcy 3.5 years after it has taken place if you forgot a judgment?

My husband got mailed papers yesterday saying that his ex wife is suing him for a judgment that was in their divorce decree. Two years after the divorce was final, my husband filled bankruptcy. I have gone through the entire bankruptcy document and can't find this judgment at all included in the bankruptcy. Does this mean he has to pay it or can a bank. document include items that were forgotten since it was before the actually bank. took place?

Answer:
Couple issues here:
1. you can bring a motion to reopen a case, there is a court fee to do so. Then it will be up to the judge to decide, based on reasonable and necessity. I have seen most of them granted here in Illinois.

2. Divorce debts: 1. Generally, divorce debts are not dischargeable in bankruptcy.
3. Divorce decree: the divorce decree will control, say there was a joint debt, that the decree said your husband was to be responsible for. Even if he files bankruptcy, the lender can then go after the cosigner, here, his ex. She then can enforce the divorce decree to still get your husband to pay the debt.

Hope that helps clear up the situation.

Selling home after bankruptcy

Subject:
selling home Question: How long after I have been discharged can I sell my home
Answer:
Once you receive your discharge, you can sell at any time.
If you need to sell during your case, you can, if you get approval from the judge.

Discharging income taxes in bankruptcy

Subject: back taxes
Question: Unfortunately I had to draw out from my retirement money due to my ill mother, whom has since deceased. I owe from 1999 thru this current year. I tried to do offer in compromise but could not come up with the money needed to get started.
I'm just strapped for money and am scared that the IRS will garnish my wages. Can you give me some insight please

Answer:
There are loopholes to discharge taxes. The tax must be 3 years old, filed on time and accurate, and you just owe. If they were inaccurate and corrected more than 2 years before your bankruptcy case, then they will be dischargeable as well. Anything less than 3 years old will not be discharged.
This is a narrow loophole, so speak with a bankruptcy lawyer to make sure bankruptcy would help your situation.

Reaffirming a mortgage

A popular question I get is regarding being on the hook for a mortgage after bankruptcy.

Here is a recent question I received:

Question:
I filed Chapter 7 Bankruptcy last year and managed to hold on to my home. I checked a box in the bankruptcy paperwork stating that I wanted to hold on to my residency. I am falling behind on my payments and want this debt to be included on my bankruptcy. Is this a reaffirmation agreement by the Court. Or is there more to it?

Answer:
A reaffirmation is a document signed by the creditor, the debtor, and usually the debtor's attorney. This states that the debtor will continue payments on the debt after bankruptcy. It keeps the debtor on the hook, thus allowing the debtor to keep the asset. This document is filed with the court, and is usually reviewed by the court to verify that there is no undue hardship on the debtor. It sounds like you are referring to your Statement of Intention, that you intend to sign a reaffirmation agreement to keep the home. If you do not sign a reaffirmation, you are not liable for the debt, and the creditor can take the steps necessary to collect the collateral back (here, foreclose.) Check with your lawyer to confirm if you have signed a reaffirmation agreement with the lender.

Illinois Attorney General Sues

Below is an article I saw on Crains Chicago business.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=28897&seenIt=1

Madigan sues citing mortgage scam

By: Lorene Yue April 08, 2008

(Crain’s) — Attorney General Lisa Madigan filed a lawsuit against a Chicago company for allegedly scamming financially troubled homeowners by posing as a mortgage rescue firm.

Victory Consulting & Investments Inc. is accused of violating the state’s Consumer Fraud and Deceptive Business Practices Act. Walter C. Armstrong, the company’s general manager, was also named as a defendant in Ms. Madigan’s suit.

The suit claims that at least five homeowners lost their homes through Victory Consulting’s alleged deceptive practices.

“The last thing desperate homeowners on the verge of losing their homes need is a so-called mortgage rescue firm that does little more than separate homeowners from their money,” Ms. Madigan said in a statement.

Neither Mr. Armstrong nor a Victory Consulting representative could be reached for comment.

The suit, filed in Cook County Circuit Court, marks the 12th time Ms. Madigan has pursued legal action against a firm claiming to offer mortgage assistance.

The suit claims Mr. Armstrong and Victory Consulting employees posed as clergy members to gain the trust of homeowners struggling to make mortgage payments. Customers were solicited through advertisements or found through foreclosure notifications filed with Cook County, the suit said. ........

This is good news. My clients have had some crazy dealings with people claiming to help them with their mortgage problems, only to have to resort to filing bankruptcy to resolve their problems. Some waste hundreds and thousands of dollars with these companies. I recently attended a meeting with the US department of Justice and they laid out a strong stance on mortgage fraud. They are investigating all sorts of angles and are cracking down on real estate fraud heavily.

As always, check with the Better Business Bureau to investigate if these are legit companies, and read up on the number of complaints filed.

Fresh Start Forms Debt repayment plan

A colleague of mine, has developed a useful way to pay down debt without filing bankruptcy.
Check out his info here.

I'd like to share this video with you. It's called "10 Minutes to financial freedom"

I guarantee, it will change the way you look at debt forever.

Feel free to share this with co-workers, friends and family.

Check out this video

Fresh Start Forms - Debt Reduction Program http://www.freshstartforms.com/Video101.aspx

For more information on our upcomming events, visit their events calendar at: http://www.freshstartforms.com/Events.aspx

US Trustee moved

The US Trustee has moved their office in Chicago.

The new address will be:
Office of the United States Trustee
Dirksen Federal Court House
219 South Dearborn Street
Room 873
Chicago, IL 60604

The main telephone number (312) 886-5785 and fax number (312) 886-5794 will
remain the same as will all individual employees’ numbers.

Cook County Chapter 7 341 hearings will now be held at 219 S. Dearborn St. Room 800 in the Dirksen Federal Building as well.

Mortgage Relief

Good News.

I recently attended a meeting presented by several prominent bankruptcy Judges in Chicago, IL. They discussed numerous topics on the current laws, rules etc. They all seemed to be in agreement that the proposed changes to the bankruptcy code that are pending in Congress currently, namely -reduction of mortgage interest rates and reduction of over financed mortgages - would be beneficial to the economy. They feel that the bankruptcy code is the correct place, since the tools are in place to enforce it and implement these changes...aka....ME!

What is being considered is allowing a debtor who has an extremely high Mortgage ARM, be able to modify that term to a fixed rate loan. They also may allow us to cram down and strip off mortgage amounts above the property's fair market value.

The judges indicate that there will be strict guidelines - such as how low we can reduce the rate, how long we can reduce the rate, and having a window in which the loan had to have been incurred or refinanced. So, now, the task is yours to write your senators and congressmen and women to say that you support this legislation.

Recent Bankruptcy Statistics...Bankruptcy is alive and well in the US

Spurred by the down cycle in the mortgage business, a downturn in the economy (Recession? what recession? ) or else just credit providers providing more credit than should be given, we have seen a recent rise in bankruptcy filings both in Illinois and throughout the country. I came across this article from the AP which spells out the numbers for you.

March 3, 2008, 4:08PM
Bankruptcy Filings Up 15 Percent in Feb.

© 2008 The Associated Press

WASHINGTON — U.S. personal bankruptcy filings rose last month to the highest monthly level since Congress passed a sweeping bankruptcy overhaul that made filing more difficult.

Consumers made more than 76,000 personal bankruptcy filings in February.

That was up more than 10,000, or 15.2 percent, from 66,000 a month earlier and up from more than 55,000 in February 2007, according to data collected by the National Bankruptcy Research Center and published by the American Bankruptcy Institute, a research group in Alexandria, Va.

It was the highest monthly figure since October 2005, when bankruptcy filings surged to nearly 620,000 before a new law made it more difficult for consumers to seek bankruptcy-court protection from creditors.

Last year, personal bankruptcy filings jumped 40 percent to more than 800,000 due to rising mortgage payments, job losses and other financial pressures, after a sharp decline a year earlier.

The trend may worsen this year as consumers' high debt loads are made worse by mortgages resetting at higher rates. The spike "forecasts the start of more to come," Samuel J. Gerdano, executive director of the bankruptcy institute, said in a statement.

Reopening a chapter 7 case

I receive several inquiries about reopening a chapter 7 case once the case is closed.

This is possible to do, however it is subject to court approval.
1. The debt must have been incurred before the date your case was originally filed.
2. The court charges an amendment fee of $26 to add on debt to a case.
3. There is also a reopen fee to reopen a case once it is closed, $260 for Chapter 7.
4. Your attorney may charge an additional fee to do the work for you.
5. This must be done by motion to the court, then the judge will rule on letting the case reopen.

New updated median income figures for bankruptcy filers

Median income level for Illinois based on family size
Effective: 2/1/08

	1 Earner	2 in Household	3 in Household	4 in Household
Illinois	$44,673	$56,545	$66,607	$77,634

Each additional household member add $6900.
These figures are used in the means testing analysis for Chapter 7 and Chapter 13

Bankruptcy Audit's suspended

This is a bit of interesting news about the random audits performed by the Department of Justice. Previously 1 in 200 cases was audited for accuracy. These audits consisted of independent review of paystubs, tax returns, bank statements, real estate documents and other related items associated with a debtor's bankruptcy case.

From the UST website:


NOTICE REGARDING DEBTOR AUDITS

January 14, 2008
As mandated in Section 603(a) of Public Law 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the United States Trustee Program (USTP) established procedures for independent audit firms to audit petitions, schedules, and other information in consumer bankruptcy cases filed on or after October 20, 2006. Pursuant to 28 U.S.C. § 586(f), the USTP contracted with independent accounting firms to perform audits in cases designated by the USTP.

The FY 2008 Consolidated Appropriations Act, Public Law 110-161, provided no funding for debtor audits. As a result, the USTP has suspended its designation of cases subject to audit and has notified the independent accounting firms performing the audits. The Program is pursuing alternative sources of funding to permit it to resume the designation of cases subject to audit and, if successful, intends to reinstate the audits.

Pursuant to Section 603(a) of BAPCPA and 28 U.S.C. § 586(a)(6), in the spring, the USTP will make public information concerning the aggregate results of the debtor audits performed during fiscal year 2007.

More Bankruptcy Q&A

Here is another rapid fire list of Q & A from bankruptcy questions I have received recently.
If you have a specific question, feel free to contact me and I'll be happy to review your situation with you. Thanks


Subject: What does reach back mean?

Question: I was doing fine financially until I went to commission sales. I kept thinking I was going to make a lot more money than I did. In June 07 I took a cash transfer from my bank credit card to my checking (they offered to me) of 15,000.00. A week later I transfered 14,000.00 to my daughter for lapband surgery. That credit crd is now up to 22K and part of about 40K I am in debt and thinking about filing Chapter 7 on. Do I need to wait one or two years before filing so they wont go after her. I did not know I was going to be in such a financial pit and dont want my bad decissions to effect her.

Answer: Transfers/payments/gifts to insiders must be disclosed for a year in your bankruptcy paperwork.

Subject: repo
Question: Is there a law that clears you from being sued after a certain amount of years. I co-signed 8 years ago for someone on a car and now the bank is just trying to sue me for the difference.

Answer: Bankruptcy will discharge your responsibility for the debt.

Subject: chapter 7
Question: Hello. Thank you for your time. I filed a chapter 7 in October of 2005, discharged in February of 2006. I have a residence and a rental home (has already gone to sheriff's sale) which both were listed assets on the bankruptcy filing. Both mortgages had ARM's which adjusted after the discharge, and the loans were never reaffirmed. Although I kept the payments current until July/August 2007, the values dropped, I could not rewrite the mortgages and have decided to "walk-away." Is my understanding correct that, since these assets were discharged in my bankruptcy and not reaffirmed, I cannot be held responsible for any deficiencies? Thank you

Answer: True. If you did not reaffirm, you are not responsible for the mortgage balance and can walk away from the home.

Subject: Getting out of Bankruptcy
Question: I need to know how can refinance my home loan andget out of bankruptcy.

Answer: I assume you are in chapter 13 bankruptcy. You will need to seek out a lender and get a proposed refinance contract. Then get that to your attorney to draft a motion to permit you to refinance. You should also order a payoff statement from the trustee. Once the motion is granted, (court will look to see if it is reasonable and necessary, comparing costs before and after etc.) then you can close on the loan and turn the proceeds over to the trustee to distribute to your creditors. You should allow about 30 days for the motion to be heard and granted.

Subject: Filing taxes post bankruputcy discharge
Question: I have completed a Chapter 7 bankruptcy during 2007. I am unsure how, or if, I am required to report that to the IRS. I owe no back taxes, and taxes were not apart of my bankruptcy. All of the debt that was discharged was consumer credit debt. I maintained my home,car and personal belongings.

Answer: As far as I know, there are no special deductions or exemptions to list when filing your taxes in regards to your bankruptcy. You should mention it to your tax preparer just in case, since I am not a tax expert, and the tax code is as big as the bankruptcy code!

Subject: Can debt be discharged?
Question: I am a primary card holder on a credit card.My wife was put on as a authorized user only.She rang up 10,000 in debt on this card.She admits its all her debt.She plans on filing Bankruptcy alone{i am not filing}. Can this debt be disharged?

Answer: This would still be your debt, since you 'authorized' her to use your account. So, they could still collect on this, despite her bankruptcy.

Subject: Chapter 7
Question: I live in vancouver wa but work in oregon. I file for chapter 7 bankruptcy in Nov 2007 but the trustee is waitng to close /discharge the debt until I file taxes so he can garnish them. My question is can he garnish my child tax credit and/or my earned incom credit?

Answer: Each jurisdiction may be different, but in Illinois, we use one of the Illinois exemptions to protect Earned Income Credit. Talk to your attorney about the available exemptions for your refund.

Bankruptcy Questions and answers

Here is an updated bankruptcy question and answer session. As you can see there are many bankruptcy issues that can sway a case one way or another. Hold tight, here we go.

Chapter 7 and Lump sum SSDI payment

Question
My daughter applied for SSDI over 2 1/2 years ago. Her husband left her 2 years ago. Their divorce comes up in March. She just received a lump sum payment from Social Security for her disability. She has not paid any of her credit cards, etc. for the past two years however I have been paying her car payment; titled jointly. I have been paying all her expenses the past two years with the agreement she pay me back when she got her settlement. She is planning on filing Chapter 7. Does she have to disclose the lump sum payment of social security disability? She owes me $8k of the $15k she received. What effect will that have on her filing? Also what happens to the car since it is in her husband's name also? She would like to keep it. Thank you.

Answer
Yes, she would disclose it. Her attorney will use state exemptions to protect it. She should not pay you, as the trustee in the case can then come after you for the funds.
For a cosigned debt, she can choose to reaffirm the debt so she can keep the car, and should continue to make the regular payments on it.
She should talk to a local bankruptcy attorney to get state specific advice.

Subject: Motion for Deficiency

Question
I live in Ohio. Filed Ch.7. Surrendered our condo to the trustee, he abandoned the property,it went into foreclose and sold at auction. I recently received a notice for motion of deficiency filed by the condo association, which by the way was listed in the original filing. Do I owe this money? What happens if I don't go to the hearing?
Thank you
Answer
If you listed the debt in bankruptcy, then the bankruptcy discharged your obligation for this debt. I assume this is a state court motion, where they may be asking for $ from the lender, as they usually have a condo association lien on the property.
IF it is a bankruptcy motion, you should speak to your attorney.

Subject: chapter 7 and tax refund

Question
i live in wisconsin a few years back i was involved in a car accident. the womens attorneys sued for 85,000 and it was granted. i want to file chapter 7 since i really have no assets at all to get rid of this judgement.i still desperately need my tax refund which should be significant w/2 children.is it better for me to file my taxes before or after i file for bankruptcy?should i anticipate them taking a portion or all?i am extremely stressed about this due to having to pay for child care. thank you very much.
Answer
Each state has exemptions to protect assets. You should meet with a local bankruptcy attorney to advise you how to protect your assets and when is the best time to file a case. Car accident debts are normally dischargeable, unless there was DUI/DWI or intentional injury.

Subject: Filing taxes post bankruputcy discharge

Question
I have completed a Chapter 7 bankruptcy during 2007. I am unsure how, or if, I am required to report that to the IRS. I owe no back taxes, and taxes were not apart of my bankruptcy. All of the debt that was discharged was consumer credit debt. I maintained my home,car and personal belongings.
Answer
As far as I know, there are no special deductions or exemptions to list when filing your taxes in regards to your bankruptcy. You should mention it to your tax preparer just in case, since I am not a tax expert, and the tax code is as big as the bankruptcy code!

Subject: Getting out of Bankruptcy

Question
I need to know how can refinance my home loan and get out of bankruptcy.
Answer
I assume you are in chapter 13 bankruptcy. You will need to seek out a lender and get a proposed refinance contract. Then get that to your attorney to draft a motion to permit you to refinance. You should also order a payoff statement from the trustee. Once the motion is granted, (court will look to see if it is reasonable and necessary, comparing costs before and after etc.) then you can close on the loan and turn the proceeds over to the trustee to distribute to your creditors. You should allow about 30 days for the motion to be heard and granted.

Subject: chapter 7 questions

Question
My wife and I recently filed chapter 7(with an atty).I would like to know if I can talk to a lender about the terms of my loan.To be more specific,We own an RV and wish to keep it.However,I/we are not going to "reaffirm".The main reason is I know that the bank doesn't want it and I don't want to be responsible in the future if I cant continue to pay.At the present time we are current on our payments and are continuing to pay.Is it reasonable to ask them to reduce the loan amount or interest rate to help us as long as we continue to pay?.............more important,........Is it legal?

Thank you in advance for your time and help.Please be advised that your answer may generate more questions.I/we ahve talked with our attorney about alot,however he is on his honeymoon at this time and unavailable.
Answer
If you do not reaffirm, then there is no negotiation with the lender. The reaf may have better terms for you. if not reaffirmed, the lender has the right to the items back. IF you pay for them, it would be up to the lender if they will agree to let you keep the items if you are current. Since the RV may have some resale value, you need to speak to them directly about the options available if you do not want to reaffirm. They are under no obligation to let you keep the RV, even if you are current, if you don't sign the reaffirmation.

Subject: Chapter 7

Question
Went in for a consultation for chapter 7 but new questions arise after the consultation.
1. Been in SC for a year now planning on moving back to GA in a couple of months. Should I go ahead and file it now in SC or wait?
2. The lawyer told me to list my assets. Do I have to list my furniture/TV(I do not want to lose it)?
3. The lawyer also told me something about Chapter 722(something about car loan) do you know what kind of car I can get?
4. Should I file taxes before or after I file?
5. If I do list assets will a trustee actually come out to see it?
Answer
1. You would need to still file in SC for 90 days after you move.
2. List all assets, and your attorney will use the state exemptions to protect your assets so that you can keep them.
3. 722 is where you can buy your car for fair market value as opposed to paying off the balance of the loan. They can help you finance something after bankruptcy too.
4. Check with your attorney to see what portion of the refund may be protected.
5. Rarely does a trustee investigate assets. You sign the papers under oath, so be sure to list all of your assets.

Subject: chapter 13

Question
I have about 22,000 in unsecured debt. All very high interest rates (cc's and 3 personal loans). I tried consolidating part of my debt into a personal loan of 10,000 6 months ago. The consolidated loan is 24% revolving and in 6 months i only managed to bring down the total 100.00 dollars, and now I am even farther in debt and can't make ends meet. My minimum payments are 700 dollars monthly. I make 37,000 a year and own my home and don't want to lose it. I will need a care within 3-5 years. If I take the chapter 13 route, what would I expect to lower my payments too monthly and will the recent 10,000 unsecured loan (it was deposited in my account, however no luxuries were purchased with it, it was used for repayment of personal debt), affect my filing. I can't go on like this, I can not even barely make these payments of 700.00. I live in PA.
Answer
With Chapter 13, you would pay back anywhere from 10-100% depending on your income, and depending on your assets. You would pay this debt back with little to no interest. Speak with a local PA bankruptcy attorney to find out the exact percentage of repayment based on your individual situation.

Subject: Chapter 7

Question
Hello,

I have filed Chapter 7 and included my home (in Georgia). The mortgage attorney has a court date of January 31, 2008 for a motion of relief from stay. Will I be notified as to how soon I need to vacate the property or approximately how long will I have left to remain on property? I asked my attorney and was told 2-3 months after filing date. I just wanted to see if I could get a more definite time frame. Thank you in advance.
Answer
Once the stay is modified, the lender will start the foreclosure process. Foreclosures can be up to 9 months, depending on the case and the jurisdiction you live in. You would have a bit of time to stay in the property and to find alternate living arrangements. The bankruptcy will eliminate the balance owed on the mortgage.