Thursday, September 24, 2009
You'd better list all debts in your bankruptcy case......
A recent 7th Circuit Case In re: Smith, No. 08-3358 (9/23/09). Appeal, N.D. Ill., E. Div. Affirmed ruled that is was permissible to let 2 civil action cases continue in state court (regarding sexual assault against debtor-physician) because the debtor did not list the debt on Schedule F of the bankruptcy petition. The creditors did not get notice until the debtor tried to transfer the case to the state court bankruptcy calander about 2 weeks before the objection to dischargeability deadline in the bankruptcy case. The instant request was deemed proper because the creditors lacked timely notice of the bankruptcy filing, and the motion to transfer the cases to state court bankruptcy calendar did not give the creditor sufficient notice of the deadline to file an adversary objection in the bankruptcy case.
Tuesday, September 01, 2009
Fixing those pesky problems on your credit report
Here is a frequent statement I hear from my bankruptcy clients when they review their bankruptcy petition before filing:
"That debt isn't mine."
I usually reply: "But it is on your credit report"
I have heard, that over 60% of all credit reports have errors on them.
Some may be as small as an incorrect spelling of a name, or an incorrect address, however, it could be someone else's information, such as a wrong social security number, or worse....someone may have stolen yours and is running up debt in your good name!
Who's job is it to make sure that the information is correct? You guessed it, yours. Bad credit can take years to repair, so don't take this for granted. You should check your credit report each year. The government gives everyone a free copy of their credit report each year, from all 3 of the credit bureaus. This can be found at http://www.annualcreditreport.com
Also, if you have errors on your report, you need to report them right away. At the Federal Trade Commission, they have set out guidelines and instructions to correct these mistakes. Click here to review how to correct your credit report. Here is where you can dispute the credit report errors. The 3 bureaus will investigate, and will respond to you usually within about 30 days. If they do correct errors, they will give you a copy of your cleaned report for free.
Do not wait. If you are trying to get a car loan, or buy a home, every point on your credit report can help you get a better, more affordable loan. Errors can cause your interest rates to be higher, or even disqualify you for the loan altogether!
As always, you can contact me with any questions, especially if you want to know how it will impact your bankruptcy case
"That debt isn't mine."
I usually reply: "But it is on your credit report"
I have heard, that over 60% of all credit reports have errors on them.
Some may be as small as an incorrect spelling of a name, or an incorrect address, however, it could be someone else's information, such as a wrong social security number, or worse....someone may have stolen yours and is running up debt in your good name!
Who's job is it to make sure that the information is correct? You guessed it, yours. Bad credit can take years to repair, so don't take this for granted. You should check your credit report each year. The government gives everyone a free copy of their credit report each year, from all 3 of the credit bureaus. This can be found at http://www.annualcreditreport.com
Also, if you have errors on your report, you need to report them right away. At the Federal Trade Commission, they have set out guidelines and instructions to correct these mistakes. Click here to review how to correct your credit report. Here is where you can dispute the credit report errors. The 3 bureaus will investigate, and will respond to you usually within about 30 days. If they do correct errors, they will give you a copy of your cleaned report for free.
Do not wait. If you are trying to get a car loan, or buy a home, every point on your credit report can help you get a better, more affordable loan. Errors can cause your interest rates to be higher, or even disqualify you for the loan altogether!
As always, you can contact me with any questions, especially if you want to know how it will impact your bankruptcy case
Wednesday, June 03, 2009
Schaumburg Illinois bankruptcy attorney
We are pleased to announce the opening of our new suburban office location.
Our new office is located in Schaumburg, Illinois.
1821 Walden Office Square #400, Schaumburg, Illinois 60173
Click for : Map and driving directions
This office is by appointment only, with office hours on Saturdays from 9am to 12pm.
We handle bankruptcy cases, divorce cases, real estate closings, and personal injuries.
Contact us now to schedule a free consultation.
Leeders & Associates, Ltd. 312-427-7400
Thursday, May 28, 2009
Car repossessed prior to chapter 13
Here is a recent decision involving a case where a vehicle was repossessed prior to a chapter 13 bankruptcy. With Chapter 13 filings, the creditor must return vehicle to debtor, otherwise it is a violation of the automatic stay provisions. Now, a bankruptcy must be filed within 21 days of the repossession or the vehicle is sold at auction, and then it would be too late. But here, the Court, on appeal, ordered that the debtor's motion for sanctions should be granted for failure to give the vehicle back timely.
7th Circuit Cases
Civil - Bankruptcy
Thompson v. General Motors Acceptance Corp., LLC, No. 08-2077 (5/27/09). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Ct. erred in denying debtor's motion for sanctions based on creditor's retention of debtor's vehicle, which had been seized prior to debtor's filing Chapter 13 bankruptcy petition. Debtor had equity interest in seized vehicle, and creditor's refusal to return seized vehicle prior to debtor establishing ability to provide adequate protection of creditor's interest in said vehicle violated Bankruptcy Code's stay put provisions. As such, creditor was required to immediately return seized vehicle to debtor's estate upon debtor filing Chapter 13 bankruptcy petition and then seek protection from Bankruptcy Court.
7th Circuit Cases
Civil - Bankruptcy
Thompson v. General Motors Acceptance Corp., LLC, No. 08-2077 (5/27/09). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Ct. erred in denying debtor's motion for sanctions based on creditor's retention of debtor's vehicle, which had been seized prior to debtor's filing Chapter 13 bankruptcy petition. Debtor had equity interest in seized vehicle, and creditor's refusal to return seized vehicle prior to debtor establishing ability to provide adequate protection of creditor's interest in said vehicle violated Bankruptcy Code's stay put provisions. As such, creditor was required to immediately return seized vehicle to debtor's estate upon debtor filing Chapter 13 bankruptcy petition and then seek protection from Bankruptcy Court.
Friday, April 24, 2009
7th Circuit case on the Automatic stay.
In re: Radcliffe, No. 08-2885 (4/23/09).
Appeal, N.D. Ind., Hammond Div. Affirmed.
District Court did not err in granting debtor's motion to enforce automatic stay provisions of bankruptcy code where creditor-pension fund announced to debtor that it would pay debtor his pension benefits, but would withhold said benefits and apply them to existing debt that arose when debtor failed to make required pension contributions to pension fund on behalf of his employees. Pension fund's unilateral decision to apply pension benefits to existing debt violated automatic stay provisions of section 362 of bankruptcy code. Moreover, pension fund could not apply pension benefits to existing debt due to anti-alienation provisions of ERISA.
This is important to emphasize the power of the automatic stay. It goes beyond just stopping phone calls and collection action. Here, the pension board decided the debtor lost his pension privileges and tried to pay back debt instead of pay the debtor. The court ruled that this is a violation of the automatic stay. I agree. They do not have the right to pay creditors with the debtors funds which were exempt in the bankruptcy estate.
Appeal, N.D. Ind., Hammond Div. Affirmed.
District Court did not err in granting debtor's motion to enforce automatic stay provisions of bankruptcy code where creditor-pension fund announced to debtor that it would pay debtor his pension benefits, but would withhold said benefits and apply them to existing debt that arose when debtor failed to make required pension contributions to pension fund on behalf of his employees. Pension fund's unilateral decision to apply pension benefits to existing debt violated automatic stay provisions of section 362 of bankruptcy code. Moreover, pension fund could not apply pension benefits to existing debt due to anti-alienation provisions of ERISA.
This is important to emphasize the power of the automatic stay. It goes beyond just stopping phone calls and collection action. Here, the pension board decided the debtor lost his pension privileges and tried to pay back debt instead of pay the debtor. The court ruled that this is a violation of the automatic stay. I agree. They do not have the right to pay creditors with the debtors funds which were exempt in the bankruptcy estate.
Wednesday, February 18, 2009
Obama's Mortgage relief plan
Barack Obama laid out his plan of attack to help solve or lessen the impact of the mortgage/real estate crisis that has haunted millions of homeowners. It is a $75 billion multi-pronged attack. It will help make it easier to afford their monthly mortgage payments, allowing refinancing while the interest rates are more favorable, or by easing the process to have mortgage loans modified. Obama is widening the scope of government involvement, bringing into the mix those homeowners who have struggled, but have remained current on their mortgage payments, but at risk of default. He seeks to make Federal funds available to loan providers to modify the loans of those who have stopped paying them as well, up to $1000 for each loan modification, and $1000 a year for 3 years if the homeowner stays current. For those who are current, but have riskly loans or high likelyhood of falling behind, the proposal will give $500 to servicers and $1,500 to mortgage holders if they modify at-risk loans before the borrower falls behind.
Also mentioned in this relief package is the willingness to work with Congress who is currently working to amend the bankruptcy laws, which will allow judges to modify mortgages, like all other secured debts in chapter 13. However, they are drawing criticism from the lenders, since this is a major change, and could cost these lenders billions. Stay Tuned
Also mentioned in this relief package is the willingness to work with Congress who is currently working to amend the bankruptcy laws, which will allow judges to modify mortgages, like all other secured debts in chapter 13. However, they are drawing criticism from the lenders, since this is a major change, and could cost these lenders billions. Stay Tuned
Tuesday, February 17, 2009
Obama to lay out mortgage relief plan thru Chapter 13 bankruptcy
President Obama is expected to lay out his strategy this Wednesday to help curb home foreclosures through Chapter 13 loan modifications. He is slated to address this and other factors of the housing crisis that sparked the financial sector meltdown.
Wednesday, January 28, 2009
Rent - past due and future amounts due
Subject: chicago bankruptcy attorney, law suit, future rent
Question: Hi Terry, Thank you for this service. I'll try to make my questions short. I owned a business, went out of business, and could not pay my rent on commercial lease. I signed lease as sole proprietor and was sued by landlord. I have been found guilty of breaching lease and ordered to pay past 9 months rent plus lawyer fees. The lease is for five years. The amount of time I was in business plus the 9 months out of business has been just 2 years and 5 months. I have already lost over 75,000.00 with the business and have no means at this point to come up with additional money owed. Now for 2 questions. Can I file bankruptcy and be discharged of this debt after going to court? If I can file bankruptcy, can the landlord come back and sue me again for the remaining months owed or can the bankruptcy absolve me from all relations with the landlord?
Answer: This debt can be included in a personal bankruptcy, and would discharge any past or future amounts that would be due, eliminating it completely. The landlord can not come back and sue you for rent.
Question: Hi Terry, Thank you for this service. I'll try to make my questions short. I owned a business, went out of business, and could not pay my rent on commercial lease. I signed lease as sole proprietor and was sued by landlord. I have been found guilty of breaching lease and ordered to pay past 9 months rent plus lawyer fees. The lease is for five years. The amount of time I was in business plus the 9 months out of business has been just 2 years and 5 months. I have already lost over 75,000.00 with the business and have no means at this point to come up with additional money owed. Now for 2 questions. Can I file bankruptcy and be discharged of this debt after going to court? If I can file bankruptcy, can the landlord come back and sue me again for the remaining months owed or can the bankruptcy absolve me from all relations with the landlord?
Answer: This debt can be included in a personal bankruptcy, and would discharge any past or future amounts that would be due, eliminating it completely. The landlord can not come back and sue you for rent.
cosigner and vehicle payments in bankruptcy
There is often some confusion with cosigned vehicles and a bankruptcy filing.
One questioner asked me : "my ex if filing for bankruptcy and he is the co signer on my car and he wants to add that in to the bankruptcy. will they repo my car or how can i protect myself from getting my car taken if he adds it?????"
Answer: If you are current and maintain the payments and insurance, you should be fine and can keep the vehicle when a cosigner surrenders their interest in the vehicle.
In other cases, where you would be the debtor in the bankruptcy, and are cosigned on someone else's car, you can walk away from the debt, discharging it, leaving the payments to the cosigner.
Alternatively, if the vehicle is yours, and you file bankruptcy, you can continue to make payments on the vehicle and reaffirm the debt, thereby protecting your cosigner. Remember, a cosigner is always liable for the debt, regardless of who has the asset.
One questioner asked me : "my ex if filing for bankruptcy and he is the co signer on my car and he wants to add that in to the bankruptcy. will they repo my car or how can i protect myself from getting my car taken if he adds it?????"
Answer: If you are current and maintain the payments and insurance, you should be fine and can keep the vehicle when a cosigner surrenders their interest in the vehicle.
In other cases, where you would be the debtor in the bankruptcy, and are cosigned on someone else's car, you can walk away from the debt, discharging it, leaving the payments to the cosigner.
Alternatively, if the vehicle is yours, and you file bankruptcy, you can continue to make payments on the vehicle and reaffirm the debt, thereby protecting your cosigner. Remember, a cosigner is always liable for the debt, regardless of who has the asset.
Tuesday, January 13, 2009
debt relief agencies
The first federal appeals court has struck down a provision of BAPCPA that limits what lawyers may say to their clients who are contemplating bankruptcy.
In the case of Milavetz v. U.S., the 8th U.S. Circuit Court of Appeals at St. Louis invalidated a section of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which prohibited “debt relief agencies”from advising their clients to incur more debt in anticipation of filing bankruptcy. This provision also includes lawyers.
Judge Lavenski R. Smith called that section 526(a)(4) “unconstitutionally overbroad” thus violating the the First Amendment -free speech. This conflicts with the attorneys duties to provide full and proper advice to their respective clients. For a thorough analysis of this story, please read the article, "A Debt-Defying Act" in the ABA Journal.
In the case of Milavetz v. U.S., the 8th U.S. Circuit Court of Appeals at St. Louis invalidated a section of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which prohibited “debt relief agencies”from advising their clients to incur more debt in anticipation of filing bankruptcy. This provision also includes lawyers.
Judge Lavenski R. Smith called that section 526(a)(4) “unconstitutionally overbroad” thus violating the the First Amendment -free speech. This conflicts with the attorneys duties to provide full and proper advice to their respective clients. For a thorough analysis of this story, please read the article, "A Debt-Defying Act" in the ABA Journal.
Homestead exemption caselaw
7th Circuit Case
In re: Belcher, No. 07-2174 (12/31/08). Appeal, S.D. Ill. Rev'd.
Dist. Ct. erred in finding that bankrupt debtor was eligible for homestead exemption under 735 ILCS 5/12-901 even though said debtor was not named on title of marital home shared by spouse, who was titleholder to said home and who had also filed for bankruptcy. Under Ill. caselaw, debtor must have formalized property interest to claim homestead exemption. In Illinois, the homestead exemption in bankruptcy is $15,000 per owner of the home, so $30,000 for a joint filing case if both spouses own the home.
In re: Belcher, No. 07-2174 (12/31/08). Appeal, S.D. Ill. Rev'd.
Dist. Ct. erred in finding that bankrupt debtor was eligible for homestead exemption under 735 ILCS 5/12-901 even though said debtor was not named on title of marital home shared by spouse, who was titleholder to said home and who had also filed for bankruptcy. Under Ill. caselaw, debtor must have formalized property interest to claim homestead exemption. In Illinois, the homestead exemption in bankruptcy is $15,000 per owner of the home, so $30,000 for a joint filing case if both spouses own the home.
Tuesday, January 06, 2009
Better Business Bureau Tips
As a member of the Better Business Bureau, I occasionally get tips from them.
Today, I received a list of the top ten scams from 2008.
Among them, #3 was Mortgage foreclosure scams, and right behind at #4 was Illegitimate credit repair & debt negotiation services. These both have an impact on my clients, before and after they meet with me.
Here is a link to the full article by the BBB.
The better business bureau advises:
3. Mortgage foreclosure rescue scams - Due to foreclosure information being publicly available, many scammers contact desperate home owners and promise to save their home. They will claim to know investors or a "loop-hole", or will claim to be able to bypass the involvement of attorneys or other agents, thereby leaving the consumer in a complex and vulnerable situation. Victims of foreclosure rescue scams are asked to pay upfront funds or provide sensitive personal information. On many occasions the scammer will rob unknowing consumers of their money and do nothing for them in return, while in other cases the consumer may unknowingly sign away their property deed entirely, on pretense that "they'll be able to buy it back later."
Once the scam artist has the consumer's property deed, they are in a position to raise the consumer's rent so high that the consumer will not be able to afford to make the payments, and may wind up being evicted from their own home. The BBB strongly advises anyone going through foreclosure to thoroughly research any businesses they are dealing with. It is a good idea to contact the Department of Consumer Services to get more information on whom to go to for help.
4. Illegitimate credit repair & debt negotiation services - Due to the troubling economic situation, many consumers seek out credit repair or debt settlement companies- here is what you need to know about them and how to determine their legitimacy.
These services can not ask for money in advance.
They can not automatically get legitimate negative reports off your credit report.
Be extremely cautious about a service that recommends you not pay creditors so it can negotiate. This could negatively affect your credit report.
A service should never guarantee they can cut your debt by a specific percentage.
1) It is against federal law -- the Credit Repair Organizations Act -- for any credit repair company to charge you in advance for their services. The only time they can ask for payment is after all of the services they were to do for you are completed; whether this takes 3 weeks or 10 months. 2) A credit repair company cannot tell you that they can get negative (but legitimate) items off of your credit report. The main aspect of credit repair organizations' work is writing to the credit reporting agencies to dispute the items on your report by asking for their validation. If the items on your report are real, such as liens, bankruptcies, etc, the credit reporting agencies will not have a problem validating them. Also, keep in mind that disputing items on your credit report is something you can do by yourself, for free- you can easily find the appropriate dispute letter templates on the internet. 3) Many debt settlement or negotiation companies request that you don't pay your creditors and wait until you are behind in payments so that they can contact your creditors and attempt to negotiate to have your debt reduced in exchange for making a payment on the spot. While some creditors may agree to this to get at least partial payment, your credit rating will suffer, your interest rates may go up, and you may have trouble obtaining future loans or financing. 4) Debt settlement or debt negotiation companies should not guarantee that by enrolling in their services, they can cut your debt by any specific percentage, such as "40-60%".
Today, I received a list of the top ten scams from 2008.
Among them, #3 was Mortgage foreclosure scams, and right behind at #4 was Illegitimate credit repair & debt negotiation services. These both have an impact on my clients, before and after they meet with me.
Here is a link to the full article by the BBB.
The better business bureau advises:
3. Mortgage foreclosure rescue scams - Due to foreclosure information being publicly available, many scammers contact desperate home owners and promise to save their home. They will claim to know investors or a "loop-hole", or will claim to be able to bypass the involvement of attorneys or other agents, thereby leaving the consumer in a complex and vulnerable situation. Victims of foreclosure rescue scams are asked to pay upfront funds or provide sensitive personal information. On many occasions the scammer will rob unknowing consumers of their money and do nothing for them in return, while in other cases the consumer may unknowingly sign away their property deed entirely, on pretense that "they'll be able to buy it back later."
Once the scam artist has the consumer's property deed, they are in a position to raise the consumer's rent so high that the consumer will not be able to afford to make the payments, and may wind up being evicted from their own home. The BBB strongly advises anyone going through foreclosure to thoroughly research any businesses they are dealing with. It is a good idea to contact the Department of Consumer Services to get more information on whom to go to for help.
4. Illegitimate credit repair & debt negotiation services - Due to the troubling economic situation, many consumers seek out credit repair or debt settlement companies- here is what you need to know about them and how to determine their legitimacy.
These services can not ask for money in advance.
They can not automatically get legitimate negative reports off your credit report.
Be extremely cautious about a service that recommends you not pay creditors so it can negotiate. This could negatively affect your credit report.
A service should never guarantee they can cut your debt by a specific percentage.
1) It is against federal law -- the Credit Repair Organizations Act -- for any credit repair company to charge you in advance for their services. The only time they can ask for payment is after all of the services they were to do for you are completed; whether this takes 3 weeks or 10 months. 2) A credit repair company cannot tell you that they can get negative (but legitimate) items off of your credit report. The main aspect of credit repair organizations' work is writing to the credit reporting agencies to dispute the items on your report by asking for their validation. If the items on your report are real, such as liens, bankruptcies, etc, the credit reporting agencies will not have a problem validating them. Also, keep in mind that disputing items on your credit report is something you can do by yourself, for free- you can easily find the appropriate dispute letter templates on the internet. 3) Many debt settlement or negotiation companies request that you don't pay your creditors and wait until you are behind in payments so that they can contact your creditors and attempt to negotiate to have your debt reduced in exchange for making a payment on the spot. While some creditors may agree to this to get at least partial payment, your credit rating will suffer, your interest rates may go up, and you may have trouble obtaining future loans or financing. 4) Debt settlement or debt negotiation companies should not guarantee that by enrolling in their services, they can cut your debt by any specific percentage, such as "40-60%".
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