There are both pros and cons to reaffirming a debt. Some of the pros include:

• You will keep the asset that is collateral for the debt. For example, if you reaffirm your car loan, you will keep your car.
• You may be able to negotiate more favorable terms for the debt. For example, you may be able to get a lower interest rate or a longer repayment term.
• Reaffirming a debt can help you rebuild your credit after bankruptcy. Timely payments will be reported on your credit report.

Some of the cons of reaffirming a debt include:

• You will be liable for the full amount of the debt, even if the value of the asset that is collateral for the debt has decreased. For example, if you reaffirm your car loan and the value of your car has decreased, you will still be liable for the full amount of the loan, even if you cannot sell your car for enough money to cover the loan.
• You may lose the asset that is collateral for the debt if you cannot make the payments. For example, if you reaffirm your car loan and you cannot make the payments, the lender may repossess your car.
• Reaffirming a debt can make it more difficult to get approved for new loans in the future.
• Even if the lender allows you to keep paying on the debt after bankruptcy, your payments will not be reported on your credit report, since the debt was discharged in the case.

Overall, whether or not to reaffirm a debt is a decision that should be made on a case-by-case basis. Generally, you would only reaffirm a secured debt, such as a car or a home. Absent very unique circumstances, it is generally not permissible to reaffirm an unsecured debt. You should carefully consider the pros and cons of reaffirming a debt before making a decision. Keep in mind, reaffirmation agreements are only available in Chapter 7 bankruptcy cases. Also, there is a limited time to change your mind, called a rescission, so talk to your lawyer if you have changed your mind.

Can you reaffirm a debt after discharge? Not in the Northern District of Illinois. Don’t let a creditor tell you that you need to reopen your case and file a reaffirmation. It can’t be done.

Finally, in the Northern District of Illinois, the court must approve a reaffirmation. They want to see that it is reasonable, necessary, and affordable. Always, talk to your lawyer for specific advice about a reaffirmation.

The post Should I reaffirm a debt in bankruptcy? Warning! appeared first on Chicago Bankruptcy Lawyer.

Free Bankruptcy Consultation

Steps to file bankruptcy

1. Get a credit counseling certificate: Before you file for bankruptcy, you’ll need to complete credit counseling with an approved agency. You’ll receive a certificate once you’ve completed the counseling.

2. File bankruptcy paperwork: You’ll need to file a bankruptcy petition, schedules of your assets and debts, and other required forms with the court.

3. Attend a meeting of creditors: You’ll be required to attend a meeting of creditors, where a bankruptcy trustee will ask you questions about your finances.

4. Complete a debtor education course: After you file for bankruptcy, you’ll need to complete a debtor education course.

5. Receive a discharge: If your bankruptcy is successful, you’ll receive a discharge, which releases you from personal liability for certain debts.

Keep in mind that bankruptcy can have long-term consequences for your credit score and your ability to borrow money in the future. It’s important to consider all of your options before filing. If you’re considering bankruptcy, it’s a good idea to speak with a qualified bankruptcy attorney who can help guide you through the process.

I hope this information is helpful for anyone who might be considering filing for bankruptcy. If you have any questions about the steps to file bankruptcy or have thoughts to share, feel free to leave a comment below. Contact us to help you with this process, free consultations by phone and zoom.

Free Bankruptcy Consultation

The post Steps to file bankruptcy appeared first on Chicago Bankruptcy Lawyer.

So many individuals and families are living paycheck to paycheck.  Thousands have lost their jobs do to Covid-19 closures.  Small businesses have had to close, with many having invested their life savings.    Landlords,  lenders and credit card companies who allowed for consumers to skip a few payments are now collecting on their balances, moving for evictions and are suing to collect the debt owed.  

Chapter 7 bankruptcy can help eliminate these debts allowing the stress of unpaid bills to be relieved.   Chapter 13 can restructure car loans, help consumers get current on their rent obligations and stop foreclosure as well.    The time to act is now, since there is an anticipated increase in bankruptcy cases coming this fall and winter.   I offer free phone and Zoom consultations to help provide a safe filing process for consumers.   If you know of anyone who is struggling, have them call me for a free consultation so I can show how I can make things a little easier during these troubling times.   Stay healthy, stay safe.   Terry

The post Bankruptcy filings expected to increase – FALL 2020 appeared first on Chicago Bankruptcy Lawyer.

Do your credit card balances seem to stay the same?   

Are you missing payments and getting collection calls? 

Now is a good time to draw the line in the sand, take action, and get a fresh start for 2020 with a chapter 7 bankruptcy case.  

The process will take about 90 days, with most of the steps done over the phone or by email.   Schedule a free consultation with me, Terry Leeders, a prominent Chicago bankruptcy lawyer with over 20 years of bankruptcy experience. 

I will go over your filing options, show you how you can be out of debt in 90 days, and will walk you through the filing process.   I try to make things as easy as possible.  I’ll give you a client folder with case instructions, a document checklist of needed items, and other useful information.  Our secure client portal will make paying fees and uploading documents simple.  

Stop the collection calls, stop the harassment, and take the upper hand when dealing with your credit.  A fresh start is just 90 days away, and I’ll be there by your side guiding you to get the results you deserve. 

The post 2020 New Years Resolution – GET OUT OF DEBT appeared first on Chicago Bankruptcy Lawyer.

http://Twitter.com/leederslaw

https://www.instagram.com/leederslaw/

https://YouTube.com

be sure to Like & Subscribe to them all!

The post Be sure to follow my social media posts for Leeders Law – Chicago Bankruptcy Lawyer appeared first on Chicago Bankruptcy Lawyer.

Chapter 7

Chapter 7 bankruptcy is the most common bankruptcy that people file.  This is the chapter that gets rid of most consumer debts in about 90 days.    Most credit cards, medical bills, repossessions, personal loans are dischargeable in a chapter 7 bankruptcy.  Some debts, like parking tickets, some taxes, student loans, and child support do not discharge in a chapter 7.

Further, mortgages and car loans are either surrendered, reaffirmed, or redeemed in a chapter 7 case.  Finally, the chapter 7 trustee can sell any un-exempt assets to pay to the unsecured creditors, but in a majority of chapter 7 cases, assets are exempt and there is no liquidation.

Chapter 11

Chapter 11 bankruptcy is for corporations, or for individuals who don’t qualify for another chapter.  These are major restructurings, and these are the ones you hear in the news, chain stores, department stores, airlines and such.    I don’t do chapter 11 cases, but I can get you a referral as needed.

Chapter 12

Chapter 12 Bankruptcy is for family farmers.   I do not practice chapter 12 bankruptcy law, so you should contact a chapter 12 bankruptcy attorney.  The Chicago Bar Association has referrals.

Chapter 13

Last, is chapter 13 bankruptcy, or wage earners bankruptcy. People who don’t qualify for chapter 7 file chapter 13.  In Chapter 13, a debtor repays a portion of their debts, based on their ability to pay and based on their assets.   Furthermore, a chapter 13 plan can pay back as little as 0% to the unsecured creditors, and up to 100% of the debt back.  This is based on any un-exempt equity in the debtor’s assets, and based on the debtor’s monthly income and means test calculations.

Consequently, a debtor’s repayment plan pays back enough of the debt to protect the un-exempt assets, and a percentage of the debt back, based on the disposable monthly income on the means test, whichever is higher.   Any remaining  unpaid debts get discharged at the completion of a confirmed chapter 13 case. Lastly, chapter 13 can help with tickets, taxes, child support too.

Free consultation

Contact us today for a free consultation about chapter 7 or chapter 13 bankruptcy.  We’ll be happy to discuss the differences with you and help show you which chapter would be best based on your specific situation.

The post Bankruptcy – C is for Chapter appeared first on Chicago Bankruptcy Lawyer.

SCHEDULES

A debtor fills out the bankruptcy paperwork and forms when filing a bankruptcy case.  These forms are the Bankruptcy Schedules.   Bankruptcy schedules list all of the assets a debtor owns.  These schedules also list all of the debts that the filer has.  Also, they list down the monthly income and monthly expenses of the debtor too.   Today, however, we will talk about -Assets.

Assets are the things that a bankruptcy debtor owns, such as real estate, vehicles, furniture, jewelry and such.  It also includes items like cash, bank accounts, retirement plans, life insurance and others, such as a workers compensation claim, or a personal injury case.

A debtor lists (or schedules) these belongings on Schedule A and Schedule B of the bankruptcy petition.    Schedule A is where the debtor lists the real estate and property they own.   Things scheduled on Bankruptcy Petition Schedule A are: homes, vacant land, timeshares, mobile homes and the like.   Schedule B contains everything else owned by the debtor.    These assets would include a debtor’s car, bank account, cash, household goods, electronics, furniture, interests in businesses, animals, jewelry, insurance policies, retirement plans, investments, inheritances, claims against third parties.   Assets that also must be listed are sporting equipment, clothing, savings bonds, luxury items like boats, planes, collectibles, antiques, tax refunds, money owed to the debtor, and any other possible thing that you own, or is owed to you.   The list above is not exhaustive.

UNLISTED ITEMS

Many debtors I speak to ask me questions about what they need to list on their schedules of assets.   In short, I tell them to list everything.   Often, debtors ‘forget’ about assets that are not tangible.  For example, when a loved one dies a debtor may inherit their home.   A debtor says “this house isn’t mine” when they have not transferred title yet.    A debtor lists this home on schedule A.   Unpaid personal loans also fit this bill.   Just because they haven’t paid you back yet, doesn’t mean you don’t have the right to that money, now or sometime in the future.  The loan belongs on Schedule B.

EXEMPTIONS

Debtor’s also often want to avoid listing stuff that they ‘don’t want to lose.’  This is completely understandable.  Good news, though.  Bankruptcy attorneys can protect (or exempt) the stuff that you have.   Schedule C is where the bankruptcy lawyer will list down these exemptions and protections for your assets, granted either by the state (here are the Illinois Bankruptcy exemptions), or by the bankruptcy code, depending on where you live, and how long you have lived there.   These are often broad, and vary by state to state.  I’ll talk more about bankruptcy exemptions at a later date.

Assets that are exempt, are not part of the the bankruptcy estate, and aren’t sold by the bankruptcy trustee.  Only unexempted assets are available to the bankruptcy trustee.  The trustee’s job is to determine if there is enough value in the unexempt belongings to make a beneficial payout to the creditors of the debtor in bankruptcy.  The US Bankruptcy Code requires a debtor to schedule all assets, regardless if they are exempt or not.

BANKRUPTCY TRUSTEE

The good news for bankruptcy filers is that chapter 7 bankruptcy trustees liquidate very few belongings.  However, when a trustee finds assets that have not on schedule A or B, the trustee can liquidates them.    If you have assets, tell your lawyer.  Your lawyer can usually protect them.  The goal for a chapter 7 case is for the bankruptcy trustee to file a ‘No-Asset Report.’

A good bankruptcy attorney would recommend chapter 13 if they see a debtor has assets that are worth more than can be exempted, and would review that process with the bankruptcy client if they wish to protect the assets while getting debt relief.    This is why it is important to tell your bankruptcy lawyer about all of the assets you have.  Their are protections for most, and it’s better to know sooner than later, especially since filing false documents in bankruptcy is a crime, and a debtor could be denied a bankruptcy discharge, or worse, be charged with a crime subject to fines and jail time if convicted!

The post Bankruptcy – A is for Assets appeared first on Chicago Bankruptcy Lawyer.

Back by popular demand, Bankruptcy Law A-Z.

A few years ago, I covered an array of bankruptcy topics, not coincidentally, from A to Z!  Check back frequently to see new and exciting posts about current bankruptcy law, Illinois bankruptcy exemptions, case law from Chicago bankruptcy court and more!  I may touch on some of the big issues again, but there will be plenty of new ones to come as well.

I will touch on the many of the following bankruptcy topics:

• US Bankruptcy Code
• Illinois Bankruptcy case law
• Bankruptcy exemptions in Illinois
• Chapter 7 bankruptcy
• Chapter 13 bankruptcy
• Bankruptcy trustees
• Bankruptcy lawyers and how they are an integral part of the bankruptcy process
• Bankruptcy judges
• The Bankruptcy Petition
• Chapter 13 bankruptcy plan
• How to deal with secured debt in bankruptcy
• Different types of unsecured debt and what happens to it while in bankruptcy
• IRS Priority debt in Chapter 7 and Chapter 13 Bankruptcy
• Parking tickets in Chicago and how a bankruptcy case would or would not help
• Domestic Support Obligations – Bankruptcy can help get these paid
• How to exempt assets in a bankruptcy case
• The 341 bankruptcy meeting with the trustee (and sometimes your creditors)
• The bankruptcy means test
• Much Much More!

The post Bankruptcy A-Z appeared first on Chicago Bankruptcy Lawyer.

Do you save your old returns?  If so, good.  Experts say to hold on to your tax returns for 10 years. That’s a lot of paper if you don’t scan them in or get digital copies of your returns from your accountant, tax lawyer or tax preparer.

Luckily, if you did not save your copies, the IRS can get these to you.

Good news!  You can order the last 4 years of tax returns directly from the IRS. Your trustee will not usually want to see your state tax returns.

The best part about it? IT’S FREE!

Order your returns from the IRS here

First off, tax returns are needed to properly fill out your chapter 7 and chapter 13 bankruptcy petition.   Get these to your bankruptcy lawyer before you file your bankruptcy.  They will forward these to the trustee in your case.

Next, be sure to list any income tax liability on schedule E of your bankruptcy petition schedules if you owe back taxes. Some income tax is dischargeable in bankruptcy, if you can meet several of the US Bankruptcy code’s loopholes. As always, contact your bankruptcy attorney (hopefully it’s me!) to review the dischargeability rules for income taxes that you may owe. Timing is everything. Thankfully, we have tools to help you determine the best time to file your bankruptcy petition.   You must schedule income tax liability if you hope to discharge it.

Furthermore, if you haven’t filed returns, you should discuss this with your lawyer too. Most likely, your bankruptcy attorney will tell you to file your tax returns.  Likewise, if you are not required to file for a certain year, your lawyer should prepare an affidavit for you to get notarized.   The affidavit states that you are exempt from filing for the tax year.

Finally, I do not practice tax law;  I only focus on bankruptcy law.  For that reason,  be sure to talk with a tax attorney to properly advise you if you have to file a tax return in any given year.

The post Tax returns – How to order tax returns from the IRS for your bankruptcy case appeared first on Chicago Bankruptcy Lawyer.

Burr Ridge
1333 Burr Ridge Parkway, Suite 200
Burr Ridge, IL 60527

 We are located in the Chicago suburbs with easy access from I-55, I-355, and I-294 about 20 miles from Downtown Chicago

Office hours are by appointment.   Feel free to call me for a free mini phone consult regarding bankruptcy at 312-346-7400.

Schedule a free consultation with a bankruptcy lawyer at our Burr Ridge office or any of our other locations today to discuss Chapter 7 and Chapter 13 Bankruptcy.

The post Burr Ridge Bankruptcy lawyer new office location – free consultation for chapter 7 and chapter 13 bankruptcy appeared first on Chicago Bankruptcy Lawyer.