Thursday, December 18, 2008

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).

Tuesday, December 16, 2008

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.

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

Friday, December 12, 2008

reaffirmations & rescissions in Chapter 7 bankruptcy

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!!!

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.

Tuesday, December 09, 2008

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
(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.

Monday, December 08, 2008

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.

Friday, December 05, 2008

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.