Smith, Pappas & Jones, Ltd of Charleston , IL.

Key Reasons to Contact a Local Workers Comp Lawyer

Mon, 30 Mar 2026 21:07:16 GMT

After a workplace injury, many employees assume the claims process will be simple. They may expect benefits to begin automatically, believe their employer will explain every step, or think there is no need for legal help unless the claim is denied. In practice, workers’ compensation cases can become complicated very quickly. Medical treatment, wage loss, insurer communication, and filing deadlines can all create problems when an injured employee is also trying to recover physically and emotionally.

This is why legal guidance often becomes important much earlier than people expect. An experienced workers comp lawyer can help an injured employee understand what the process requires, what rights may apply, and what issues could threaten the claim. Instead of trying to interpret forms, deadlines, and medical documentation alone, workers can move forward with clearer direction and stronger protection. That kind of guidance can also reduce avoidable stress, which matters when injured employees are already balancing recovery, household responsibilities, and concerns about when they will be able to return to normal routines.

Understanding Filing Requirements

One of the most important reasons to seek legal help is that workers’ compensation law involves strict procedures. Reports may need to be made within a certain timeframe, medical records must support the claim, and forms often need to be completed accurately to avoid delays. A worker who misses one requirement may face unnecessary complications, even when the injury is legitimate.

A workers comp lawyer can explain how the process works, what evidence matters most, and how to avoid mistakes that may weaken a case. This support is especially helpful when the injury is not tied to one sudden accident. Repetitive stress injuries, occupational illnesses, and aggravated preexisting conditions often raise questions about when the problem began and whether it is work related. Legal guidance helps organize these details in a clearer and more persuasive way.

Securing the Full Range of Benefits

Many injured employees think workers’ compensation only covers a doctor visit and part of their lost wages. However, benefits can include much more than that, depending on the circumstances. A claim may involve medical care, temporary wage replacement, permanent disability payments, rehabilitation support, or compensation tied to long-term restrictions. If an employee does not understand what may be available, important benefits can be missed.

This concern becomes even more relevant when claims are common in a given region. According to the National Council on Compensation Insurance, states with high workers’ compensation claims average annual claim filings from 2.8 percent of employees. That figure highlights how often these cases arise and why insurers usually rely on detailed procedures when evaluating them. A workers comp lawyer can help determine whether the benefits being offered match the seriousness of the injury and whether more action is needed to pursue proper compensation.

Addressing Delays and Disputes

Not every case is denied right away. In many situations, the first signs of trouble appear through delayed approvals, disputed medical treatment, or questions about whether an injury actually happened on the job. These issues can create confusion and financial pressure long before a final decision is made. When benefits are late or treatment is challenged, the injured worker may feel stuck between medical needs and legal uncertainty.

A workers comp lawyer can step in to review notices, gather records, and identify the source of the dispute. In some cases, the problem may involve incomplete paperwork. In others, it may involve a disagreement over medical opinions or the scope of the injury. Either way, early legal involvement can help the worker respond in a structured way rather than relying on guesswork. That can keep a smaller issue from turning into a larger setback.

Handling Communication Carefully

Employer representatives, insurance adjusters, nurse case managers, and medical evaluators may all communicate with an injured worker during the life of a claim. Some requests are routine, but others may have a real effect on benefits or work status. A poorly worded statement, a misunderstood form, or an agreement signed too quickly can complicate the case in ways the worker did not anticipate.

This is another reason legal support matters. A workers comp lawyer can help an employee understand what should be shared, what should be reviewed carefully, and how to respond when there are mixed messages from different parties. This can be particularly important when the worker is being encouraged to return to work before recovery is complete or before restrictions are fully addressed. Thoughtful communication protects both the claim and the worker’s ability to focus on healing.

Evaluating Long-Term Consequences

Some injuries improve within weeks, but others change a person’s health, mobility, and earning power for the foreseeable future. A worker may be unable to return to the same job, may need ongoing treatment, or may face lasting physical limitations. In those situations, the claim should be evaluated with more than short-term concerns in mind.

A workers comp lawyer can help assess whether a settlement or benefit decision reflects future medical care, reduced earning capacity, and long-term disability issues. This matters because once certain agreements are signed, reopening the matter may be difficult or impossible. An amount that seems reasonable in the early stages may later prove insufficient if treatment continues or work options become more limited. Legal guidance helps workers make decisions based on the full impact of the injury rather than immediate pressure alone.

Preparing for Hearings and Appeals

When a case moves into a formal dispute, the process becomes far more demanding. Hearings and appeals may involve deadlines for evidence, medical documentation, witness testimony, and legal arguments. Even a worker with a valid claim may struggle to present it effectively without understanding how the system expects evidence to be organized and explained. That added pressure often makes professional guidance even more important during the recovery process.

At this stage, representation can be especially valuable. A workers comp lawyer can prepare records, identify weaknesses in the opposing position, and present the employee’s case in a more focused and credible way. Formal proceedings are not just about telling the truth of what happened. They are also about showing that the evidence supports the claim under the rules that apply. Proper preparation can improve both clarity and credibility when the outcome matters most.

Making the Process Less Overwhelming

A workplace injury can affect nearly every part of daily life. Pain, missed income, medical appointments, and uncertainty about the future can create enormous stress in a short period of time. Many people wait to seek legal help because they assume hiring an attorney will make things more complicated. In reality, the right guidance often makes the process easier to understand and easier to manage.

A workers comp lawyer can answer questions, explain options, and help injured workers avoid decisions that could harm their cases later. Legal support also gives workers a better sense of timing, helping them understand when to act quickly, when to gather more information, and when a dispute may require a more aggressive response. That assistance can be useful at the beginning of a claim, during a dispute, or before agreeing to a settlement. When an employee has clear guidance, it becomes easier to focus on recovery without losing sight of important legal rights. Give Smith, Pappas & Jones, Ltd. a call today to discuss your case.

Navigating Financial Crossroads: Retaining Your Home with a Home Equity Line of Credit or Bankruptcy

Wed, 21 Feb 2024 16:25:00 GMT

If the purpose of a HELOC is to mitigate, rather than solve an unsustainable household budget, then bankruptcy may provide a better outcome.

During times of financial uncertainty, families and individuals alike encounter difficult dilemmas determining the best path towards financial stability. Two common avenues for addressing financial challenges are obtaining a Home Equity Line of Credit (HELOC) and filing for bankruptcy. Each option comes with its unique advantages and considerations, particularly concerning the retention of one's home. In this blog post, we'll explore the advantages of a HELOC alongside the pathways to retaining your home through both Chapter 7 and Chapter 13 bankruptcy.
Exploring Home Equity Line of Credit (HELOC):
A Home Equity Line of Credit (HELOC) provides homeowners with a means to borrow against the equity in their homes. This revolving line of credit operates akin to a credit card, enabling borrowers to withdraw funds as needed, with interest payments applicable only to the amount borrowed.
Advantages of a HELOC:

Asset Preservation: Retaining ownership of one's assets, particularly the home, is a primary advantage of opting for a HELOC. Unlike bankruptcy, which may entail the liquidation of assets to satisfy creditors, a HELOC allows homeowners to access funds while safeguarding their property.
Flexibility: HELOCs offer borrowers flexibility in accessing funds, with the ability to borrow varying amounts, up to the approved credit limit. This flexibility proves invaluable for managing unforeseen expenses or consolidating high-interest debts.
Competitive Interest Rates: In many instances, HELOCs feature lower interest rates compared to alternative forms of credit, such as credit cards or personal loans. This can translate to reduced monthly payments and overall interest expenses, rendering it an appealing option for debt management.

Comparing to Bankruptcy: Retaining Your Home through Chapter 7 and Chapter 13: Contrasting a HELOC, bankruptcy offers distinct pathways for retaining one's home, particularly through Chapter 7 and Chapter 13 filings:
Chapter 7 Bankruptcy:

Homestead Exemption: In Chapter 7 bankruptcy, individuals may utilize homestead exemptions to safeguard a portion of the equity in their primary residence from creditors' claims. The specifics of these exemptions vary by state, with some jurisdictions offering more generous protections than others.
Reaffirmation Agreement: Alternatively, individuals may negotiate a reaffirmation agreement with their mortgage lender, allowing them to retain their home by reaffirming the debt and continuing with mortgage payments post-bankruptcy.

Chapter 13 Bankruptcy:

Debt Repayment Plan: Chapter 13 bankruptcy involves the development of a court-approved repayment plan, allowing individuals to catch up on delinquent mortgage payments over a specified period while retaining possession of their home.
Automatic Stay Protection: Similar to Chapter 7, Chapter 13 initiates an automatic stay, halting foreclosure proceedings and providing individuals with an opportunity to restructure their finances and save their homes from foreclosure.

Note of Consideration: If a HELOC is obtained in order to resolve credit card, medical, or other unsecured debt, then that debt will become secured by the equity in the home which has significant implications as to how the debt will be treated in the bankruptcy process. If the purpose of a HELOC is to mitigate, rather than solve an unsustainable household budget, then bankruptcy may provide a better outcome. Before making a decision it is best to consult with a professional that understand the nuances of Local and Federal Bankruptcy Law.
Free Consultation There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith, Pappas & Jones, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to consult with experienced Debt Relief Attorneys contact Smith, Pappas & Jones, Ltd. We are a debt relief agency. We help people file for Bankruptcy relief.

Navigating Bankruptcy in the Face of Soaring Home Prices

Wed, 07 Feb 2024 20:09:00 GMT

Home Equity: a source of security or a threat to retain ownership through Chapter 7 bankruptcy?

In recent years, the soaring prices of homes have presented a double-edged sword for families navigating financial hardship. On one hand, increased home values may offer a glimmer of hope for those seeking to avoid bankruptcy by refinancing their home. On the other hand, these elevated prices have made it increasingly challenging for families to retain their homes during Chapter 7 bankruptcy proceedings.
Chapter 7 Bankruptcy and the Challenge of Home Equity:
Chapter 7 bankruptcy involves the sale of non-exempt assets to settle debts. The homestead exemption allows debtors to protect a certain amount of equity in their primary residence from liquidation. The problem arises when the value of the home surpasses the value of the mortgage plus the homestead exemption, leaving families vulnerable to the risk of losing their homes to satisfy creditors.
Because home prices have drastically increased in value nation-wide over the past three-to-five years. The equity in those homes, once considered a source of security, now pose a threat to those facing financial hardship and considering bankruptcy.
Chapter 13 Bankruptcy and the Impact of Home Equity:
Chapter 13 bankruptcy provides an alternative path for individuals with regular income to reorganize their debts through a court-approved repayment plan. Unlike Chapter 7, Chapter 13 allows debtors to retain their assets while making structured payments to creditors over a period of three to five years.
Equity in a home can affect the terms of a Chapter 13 repayment plan. If the equity in a home exceeds the exemption limit, the debtor must pay to his or her unsecured creditors whatever they would have received had the home been liquidated under Chapter 7.
Understanding Chapter 13 Bankruptcy:
For debtors facing substantial equity in their homes, Chapter 13 bankruptcy offers a potential lifeline. By proposing a repayment plan that considers the value of non-exempt assets, including home equity, individuals can satisfy creditors while retaining ownership of their property.
The Chapter 13 process begins with the debtor filing a petition with the bankruptcy court, along with a proposed repayment plan. The plan outlines how the debtor intends to repay creditors over the designated period, typically three to five years. During this time, creditors are prohibited from initiating or continuing collection efforts against the debtor. Upon approval of the repayment plan by the bankruptcy court, the debtor must adhere to its terms, making regular payments to the appointed trustee, who then distributes funds to creditors according to the plan. Throughout the repayment period, the debtor is required to maintain current payments on secured debts, such as mortgages or car loans, to prevent foreclosure or repossession.
Upon successful completion of the repayment plan, remaining eligible debts may be discharged, providing the debtor with a fresh financial start.
The relation between rising home prices and bankruptcy presents both challenges and opportunities for families struggling with debt. While increased equity in a home may complicate Chapter 7 proceedings, Chapter 13 offers a structured approach to debt relief that considers the value of assets, including home equity. By understanding the implications of home equity on bankruptcy proceedings and exploring the options available, families can navigate these turbulent financial waters with greater confidence and clarity.
Free Consultation There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith, Pappas & Jones, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to consult with experienced Debt Relief Attorneys contact Smith, Pappas & Jones, Ltd. We are a debt relief agency. We help people file for Bankruptcy relief.

Bankruptcy and Your Credit Score: Rising Like a Phoenix from the Ashes

Tue, 30 Jan 2024 15:41:00 GMT

How Bankruptcy Can Be a Surprising Catalyst for Credit Improvement

The word "bankruptcy" often carries a heavy stigma, synonymous with financial failure and ruin. However, what many people overlook is the potential for bankruptcy to serve as a transformative tool in rebuilding your financial standing, particularly when it comes to your credit.
1. A Fresh Start with Chapter 7: Chapter 7 bankruptcy discharges most unsecured liabilities, providing a fresh start for those drowning in overwhelming and insurmountable debt. While the bankruptcy will remain on your credit report for up to ten years, the discharge allows you to rebuild your credit from a clean slate, unburdened by the weight of minimum payments and atrocious interest rates.
2. Structured Repayment Plans with Chapter 13: Chapter 13 bankruptcy is a three-to-five-year repayment plan where some or all of the debts are repaid for those with income too significant to qualify for Chapter 7, possess too much property to retain through Chapter 7, or for some other reason particular for their circumstances.
3. Elimination of Negative Items: Bankruptcy has the power to eliminate or discharge many types of debts, including credit card balances, medical bills, and unsecured loans. As these debts are discharged, the associated negative items on your credit report are removed. This reduction in negative items contributes to an overall improvement in your credit profile.
4. Focus on Positive Financial Behavior: While bankruptcy may initially lower your credit score, it also provides an opportunity to rebuild by focusing on positive financial behavior. Responsible use of credit after bankruptcy, such as making timely payments on new obligations, can have a significant positive impact on your credit score over time. Lenders often appreciate a borrower who has taken steps to address and rectify past financial challenges.
5. Educational Resources and Credit Counseling: Bankruptcy comes with mandatory credit counseling, providing valuable financial education to help you make more informed decisions about your finances. This education equips you with the tools to manage credit responsibly, further contributing to the improvement of your credit score in the long run.
Contrary to popular belief, bankruptcy isn't the end of your financial story; it can be a new beginning. Through the discharge of debts, structured repayment plans, and a focus on positive financial behavior, bankruptcy offers a unique opportunity to rebuild and improve your credit. While the process may take time, the lessons learned and the fresh start provided can set you on a path to financial stability. Embrace the opportunity for growth, and remember that with determination and responsible financial habits, your credit score can indeed rise from the ashes of bankruptcy, like a phoenix.

Free Consultation There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith, Pappas & Jones, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to consult with experienced Debt Relief Attorneys contact Smith, Pappas & Jones, Ltd. We are a debt relief agency. We help people file for Bankruptcy relief.

The Automobile Financing Crisis

Tue, 10 Oct 2023 21:39:00 GMT

The average cost of owning a vehicle in 2022 was $10,728, about 17.5 percent of the median income for a household of one in the state of Illinois.

Macroeconomic Environment
Inflation
The macro-economic global environment is still experiencing fallout from many governments’ economic policies in response to the coronavirus pandemic which included, stimulus packages supporting individuals and businesses with direct payments, increase unemployment benefits, and grants to businesses. Additionally, the government mandated that many businesses shut down to stop the spread of the coronavirus through social interaction. These policies caused demand to increase and supply to decrease, causing a significant shift in the supply and demand curve for many, if not all, goods and services.
Federal Funds Rate
The Federal Funds Rate is the interest rate at which banks lend reserve balances to each other, which correlates directly with the Prime Loan Rate, the rate at which banks are willing to lend to consumers with good credit ratings. During the coronavirus pandemic the Federal Funds Rate was extremely low (0.25%), so that consumers were motivated to take on debt to obtain assets, like a house, car, or even stock, which all appreciated significantly briefly after economic policies implemented in response to the coronavirus.
The Federal Funds Rate, from the end of 2021 to the beginning of 2022, increased the sharpest ever since the 1970s, and is currently at 5.5%. Looking at the past 50 years 5.5% is not a lot. However, many revolutions have occurred in the borrowing/lending industry since the 10% rates experienced in the 1970s and 1980s. The consumer has become reliant on credit with respect to larger purchases like a vehicles, home repair projects, major appliances, and even furniture. Therefore, today’s consumer has no capacity to tolerate the Federal Funds Rate of the 1970s and 1980s.
Tightening of Lending Practices
In early 2021 the Federal Reserve stated inflation is transitory and implied it would not be raising the Federal Funds Rates in the near-term. In response to the Federal Reserve’s statement banks purchased long-term U.S. bonds with their cash reserves so that they could generate some income from an investment that was thought to be safe. Inflation soared in 2021 and well into 2020, and in response the Federal Reserve raised the Federal Funds Rate. Raising the Federal Funds Rate increases the rate of return for bonds issued after the rate increase, but not those issued before. So, if the banks need to liquidate the long-term U.S. bonds they purchased at the low rate to satisfy near-term liabilities, they will need to sell their treasuries at a discount, because no one would buy old bonds at face value when they can buy new bonds yielding a greater return. The Federal Government had to make a deal with several banks in 2023 to ensure depositors would not lose their funds. When a bank’s bond portfolio becomes unhealthy it may lose its appetite for risk and extend fewer loans.
Expensive Vehicles, High Interest Rates, and a Strike
Consumer Price Index
The St. Louis Fed tracks the consumer price index of new vehicles, which is the percent that vehicles have increased since 1983. From March 1993 through December 2020 the price for a new vehicle ranged between 32 percent and 49 percent more than in 1983. Since December 2020, the consumer price for new vehicles spiked to where it currently sits at 79 percent more than in 1983. For example, a vehicle costing $15,000 in 1983 would have cost about $19,800 in March of 1993, $22,500 in December of 2020, and $26,850 as of October 2023. In less than three years vehicles have increase in price at a rate significantly greater than the 27 years prior.
Prime Lending Rate
As mentioned above, the prime lending rate is directly correlated with the federal funds rate, which has increased sharply since the end of 2021. The prime lending rate was 3.25 percent in December of 2020 when the vehicle from the example above was worth $22,500, which over five years costs $406.80 monthly. Currently the prime lending rate is 8.5 percent and the same vehicle now costs $26,850, which over five years costs $550.87, a 35 percent increase from December 2020. The loan can be stretched over a longer term, but that results in a greater interest-to-principal ratio on the purchase.
United Auto Worker Strike
Due to inflation the entry level wage of a United Auto Worker is inadequate to meet the cost-of-living, such that a new employee might need a part-time position to supplement their income to service a basic standard of living. This conflict between the inflated cost of living and the entry-level wage has resulted in a strike. A long strike could result in a constrained supply chain further increasing the cost of a new vehicle. If the manufacturers agree to pay their workers more, they may pass some or all of this increased labor cost to the consumer. Therefore, it's difficult to predict whether we will see a price correction in the price of a new vehicle following the recent spike.
Avoid Repossession
The price of everything is inflated and the cost of borrowing is high, it’s not a good time to be in the market for a vehicle, especially for those with poor credit. Those having difficulties keeping up with their vehicle payment should consult with a local bankruptcy attorney. A bankruptcy attorney can eliminate unsecured liabilities like credit card and medical debt so payments towards those debts can be redirected to other basic needs like food, transportation, and shelter. A bankruptcy attorney can also extend a car note for up to 5-years to cure arrears, stretch out the term for lower payments, and sometimes lower the interest rate.
Free Consultation
There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to consult with experienced Debt Relief Attorneys contact Smith Law, Ltd. We are a debt relief agency. We help people file for Bankruptcy relief.

Paying Your Debts v Filing Bankruptcy

Wed, 12 Apr 2023 20:42:00 GMT

What's more important a credit score or the ability to save money?

Chapter 7 Bankruptcy is a quick and easy process to resolve a household budget ridden with credit card or medical debt, but is it better to pay off your debts than to have them discharged in bankruptcy?
Credit Score
The concern obvious to most is that Bankruptcy is going burden a person’s credit score for the length of time the record remains on their credit report. The formula to determine a credit score is not disclosed so that it is difficult to provide a well-informed opinion. However, a bankruptcy can initially help a credit score if a lot of debt is being discharged, especially if the accounts being discharged are delinquent. The detriment of a Bankruptcy on a credit report will more likely relate to how high the score can reach in the future.
Saving Money
The capacity to save money is better than an immaculate credit score. It may take years to pay tens of thousands in credit card and medical debt that could otherwise be discharged in months. The discharge grants more feasibility for a household to save money that would have otherwise gone towards debt and interest payments. The savings would then be available in the event of an emergency so that debt does not need to be incurred and the credit reporting system will be avoided.
Conclusion
It’s good to pay back borrowed money, but we have an obligation or ourselves and our families to do what is in our best interest. Having a good credit score to obtain a loan at a reasonable interest rate is nice, but having the capacity to avoid the credit system is a form of financial freedom.
Free Consultation
There are many considerations with respect to Bankruptcy too numerous to include in a brief publication. Bankruptcy is a practice suitable for an experienced debt relief attorney like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that a person not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to consult with experienced Debt Relief Attorneys contact Smith Law, Ltd. We are a debt relief agency. We help people file for Bankruptcy relief.

Obtaining Loan Modification for a Delinquent Mortgage is Difficult

Fri, 01 Apr 2022 18:29:00 GMT

There are alternatives to loan modification for homeowners that are delinquent on their mortgage.

Some circumstances, usually a reduction in income or increase in expenses, lead homeowners to become delinquent in making their monthly mortgage payment. When the mortgage arrearage amount grows over time, the mortgage servicer may offer the homeowner the opportunity to modify their mortgage so that the arrearage can be spread over the remaining term of the note, or the term of the note can be extended to provide for reduced payments. This is a wonderful opportunity and makes good sense; however, obtaining the relief sought requires diligence and recordkeeping beyond most homeowners experiences.
A story was aired in March of 2022 by San Diego's ABC affiliate regarding a man suffering from progressive muscular atrophy on a fixed income. The man's friend and former colleague, an officer with the La Mesa Police Department, attempted to help his friend through the loan modification process, but eventually appealed to local media for help when his attempts were frustrated by the mortgage servicer. Click here to be linked to the story.
Stories like that aired by ABC are similar to those that bankruptcy attorneys hear when consulting with homeowners that are behind on their mortgage payments but want to keep their home. It’s common that homeowners do their best with the loan modification application then hope and pray that it’s processed; however, the mortgage servicer may request the applicant resolve some insignificant or non-existent error and resubmit the application. If too much time passes prior approval of the loan modification application the application will expire, and the borrowers will need to restart the process. Despite homeowners’ attempts to modify their loan, the mortgage servicer may elect to begin the foreclosure process. Homeowners can still modify their loan during the foreclosure process; however most mortgage agreements provide that the borrower is responsible for the attorneys’ fees in the foreclosure action which creates a much larger arrearage to be cured.
There is an alternative method for saving a home that is in significant mortgage arrears without engaging in the loan modification process. Chapter 13 bankruptcy puts the homeowner in control of creating a plan to cure a mortgage arrearage. To engage in this relief the borrower will consult with a local bankruptcy attorney who will put together a 3 to 5-year payment plan, which allows the homeowner to cure the arrearage over the plan period.
In addition to the benefit of implementing a plan to save borrower’s home, the homeowner will also be able to discharge most unsecured debt, including that which stems from credit cards or medical services, at the end of the payment plan while only paying back a portion of what’s owed to those creditors. This allows homeowners to cure their arrearages without the burden of monthly credit card payments or debt collection agencies demanding payment.
There are certain detriments with filing a chapter 13 bankruptcy that are not present with a loan modification. Any bankruptcy filing will remain on your credit report for ten years, which may affect future employment opportunities, or application for lines of credit. In addition to paying off the arrearage, homeowners will also need to pay their attorney and a small portion of their plan payments will be used to pay the Chapter 13 Bankruptcy Trustee.
Consult with an experienced bankruptcy attorney to help weigh the benefits and detriments of a chapter 13 bankruptcy filing. Free Consultation
Bankruptcy is a practice suitable for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those law, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Inflation and the End of the Monthly Child Tax Credit

Wed, 26 Jan 2022 14:33:00 GMT

Families across the U.S. are beginning to realize their "old budget" doesn't do it anymore

With monthly distributions of the child tax credit having expired, and the increased cost of groceries, fuel, and utilities, families across the country are finding that their income no longer provides for their normal monthly expenses. A budget deficit is an uncomfortable position, especially when caring for children. The constant accumulation of debt to service a budget deficit is like sinking in quicksand.
Avoid Debt
A common mistake is that households will take on debt prior to reducing expenses, and it’s not until credit is no longer obtainable that the budget is carefully examined, however balancing a budget burdened by monthly payments to creditors is near impossible. Credit cards are nice for covering variable monthly expenses like groceries, fuel, and utilities but if the balance cannot be paid at the end of the month, then the budget is not sustainable.
Rather than borrowing to temporarily “make ends meet” consider what expenses can be reduced. Common cost cutting strategies include shopping for less expensive meals, eliminating subscriptions services like Netflix and Spotify, or finding entertaining activities to do at home instead of going out. The less you need, the easier it is to be happy.
Don’t worry about others’ possessions and income, appreciate your life. Media actively influences how we spend our time, money, and vote; whether it be an anchorman, a commercial, a movie, or Facebook; actively avoid this influence by focusing on family, friends, recreation, and serving your community.
Up to the Neck in Debt: Bankruptcy
When a household income does not provide for the household expenses many families will incur debt with hopes that relief in some form will present itself in the future. Hope is not a good strategy, but sometimes it’s the only strategy.
Bankruptcy can eliminate liability for monthly expenses related to credit cards, medical bills, and old utility bills as well as vehicle loans and mortgages where the collateral will be or has been surrendered, repossessed, or foreclosed. There is also relief for other niche categories of debt including certain types of debt owed to the government. Bankruptcy is an easy solution for those that could balance their budget if not for monthly payments to Creditors that provide no current value to the means of a household. After eliminating monthly expenses used to pay back old debts, attention can be averted to expenses necessary for a reasonably comfortable life, like the mortgage payment, groceries, and utilities to name a few.
Free Consultation
Bankruptcy is a practice suitable for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuanced in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Stopping a Wage Garnishment with Bankruptcy

Thu, 02 Dec 2021 16:41:00 GMT

Filing for Bankruptcy under Chapter 13 Bankruptcy because the up-front costs of Chapter 7 Bankruptcy are too expensive is a bad idea, but sometimes it's the only feasible solution.

Upon filing a bankruptcy petition creditors are prevented from engaging in any collection activity, which includes the garnishment of wages. A common problem with this solution is that bankruptcy attorneys often require between $750 to $1500 plus a filing fee of $338 to be paid prior to filing a chapter 7 bankruptcy petition. Attorneys require their Chapter 7 Bankruptcy fees up-front because, like the creditor garnishing the client's wages, they have no right to collect a debt post-petition. Attorneys can, and usually do, accept less than the full Chapter 13 Bankruptcy fee prior to filing, sometimes an amount as paltry as five-hundred dollars; but this will cost the client much more in the long-run than if they had filed under Chapter 7 of the Bankruptcy Code.
The difference between Chapter 7 and Chapter 13 of the Bankruptcy Code
Chapter 7 bankruptcy is a brief process lasting only a few months. Shortly after filing, the petitioner will meet with a bankruptcy trustee assigned to their case, and the trustee will ask the petitioner several questions that will be review if the petitioner's attorney did a good job preparing their client. After the meeting the Petitioner need only wait for a deadline to pass and thereafter will receive their discharge. Most chapter 7 bankruptcies are "no asset" cases, meaning the petitioner is not required to surrender any property for the benefit of their unsecured creditors. Attorneys are typically not allowed to collect any portion of their fee after the case is filed.
Chapter 13 is a three to five year debt consolidation plan where creditors may be forced to accept less than what is owed depending on the circumstances of the case. An attorney may collect their fees during the chapter 13 repayment plan ahead of unsecured creditors, therefore they need not collect their entire fee prior to filing. Although the up-front cost of filing bankruptcy under Chapter 13 is significantly less, the total cost over the three to five year repayment plan will be significantly more.

When producing the fee for Chapter 7 Bankruptcy is impossible . . .
Borrowing from a friend or family member that is willing to help you pay for the services of a bankruptcy attorney is fine, borrowing from a bank or lending company for those same purposes is a fraud. When a person's wages are garnished and they have no friends or family to help them out, how do they obtain relief?

While a Chapter 13 Bankruptcy Plan is a burden on a petitioner's budget it will likely not be as burdensome as a wage garnishment. For example, instead of having $100 of income garnished every week, a petitioner may pay $100 a month in the Bankruptcy Plan, depending on the circumstances of the case.

Although chapter 7 Bankruptcy provides a better outcome for bankruptcy petitioners, Chapter 13 Bankruptcy provides some relief and the up-front expenses might be less than half of what they would be for a Chapter 7 Bankruptcy. Furthermore, petitioners may transfer from a Chapter 13 bankruptcy to a Chapter 7 bankruptcy by having their attorney motion the court, however the attorney is likely to charge for this service, and the total cost will probably be more than if the petitioner had just filed for Chapter 7 Bankruptcy relief from the beginning.
Free Consultation
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.

We are a debt relief agency. We help people file for bankruptcy relief.

The Era of the Retail Investor

Tue, 02 Nov 2021 13:49:00 GMT

Saving money is good, investing money is better, but losing money is the worst.

At the beginning of 2021 retail investors entered the limelight as GameStop Corp. (GME) rose from under $20 per share to $483 in under two weeks. After the general public observed this phenomenon of a dying brick-and-mortar industry spring to life through the sheer will of a mass of retail investors lead by a common understanding of market game theory, many young lower and middle-class adults decided to join in.
"many novice investors that bought into the hype served as exit liquidity to early investors, those novice investors have likely sold at a loss."

Shortly after the "GME pump" market participants observed other "meme stocks" pump, including Virgin Galactic Holdings, Inc. (SPCE) which rose from under $25 per share to over $60 per share in the span of a month. Later in 2021, during the months of May and June, AMC Entertainment Holdings, Inc. (AMC) rose from under $10 per share to over $70 per share. Tesla, Inc. (TSLA) cost under $600 per share in May and doubled in the span less than six months.
These "pumps" were all driven by media hype. Young rebellious investors took to social media to share their lucrative tales of battling the "evil hedge funds" that controlled the mainstream narrative, inspiring other novice investors to join the war. These investors believe the way to combat wealth inequality is by buying into popular, but obscure investment opportunities (i.e. the sale of physical video games in vacant shopping centers when digital copies are available on the internet or theaters during an epidemic). While the share prices of stocks like GameStop Corp. and AMC Entertainment Holdings, Inc. remain above what they were "pre-pump," many novice investors that bought into the hype served as exit liquidity to early investors, those novice investors have likely sold at a loss.
"There are many bad actors that, for their own pecuniary gain, will manipulate others into making poor decision."
The general public has also taken root in the cryptocurrency market. Many uneducated and misguided retail investors buy into cryptocurrencies that cost only pennies, or even fractions of a penny, believing it is possible for their asset to reach a value where the decimal point will move several places to the right. In early 2021, around the same time as the "GME pump," a popular twitter account by the name of Elon Musk tweeted, "Dogecoin is the people's crypto," sending the value of Dogecoin (DOGE) from 4 cents to 8 cents per unit; then in April Mr. Musk further tweeted about Dogecoin, sending the price from 5 cents per unit to over 70 cents per unit in May.

While Dogecoin remains relevant, there is a newer popular, hype-driven cryptocurrency called Shiba Inu Token. In May of 2021 Shiba Inu skyrocketed creating overnight millionaires out of early investors. However, the creators of Shiba Inu Token gifted to Vitalik Buterin, the creator of Ethereum (ETH), a significant portion of the Shiba Inu Token supply. Mr. Buterin proceeded to sell (or dump) the entire supply he was provided with, causing the price of Shiba Inu Token to crash by 90 percent. For four months the price of Shiba Inu traded between 10 to 20 percent of what it was valued at its May peak until October 2021, when it rose by 1220.13 percent.

Cryptocurrencies like Dogecoin and Shiba Inu Token do not provide any value or use-case that an investor can develop strong conviction for, instead investors in Dogecoin and Shiba Inu Token rely on "The Greater Fool Theory," which provides that the value of a market asset is determined by what it can later be sold for. In the case of Shiba Inu, a large investor likely purchased a large order of Shiba Inu Tokens a month or so ago, and has since multiplied their initial investment 12 times over. When the large early investor is satisfied with their profits they will sell, causing the price of Shiba Inu Token to decrease. Because the asset has no value other than media hype, it is difficult for holders to have conviction that a recovery will follow a significant dip, so that one large sale can shake investor confidence causing a crash.
"If you have lost an amount detrimental to your livelihood due to a
bad investment a bankruptcy attorney can help you get back on
your feet."

The cryptocurrency market is rife with several types of fraud. The most basic types of frauds are phishing attempts on a user's crypto wallet so that the fraudster can empty the victims wallet of crypto assets. A more sophisticated type of fraud in the crypto space is called a "rug pull." The value of a cryptocurrency is determined by the amount of assets supporting its value, sometimes creators code their token so that they can drain any assets supporting the token's value at will, defrauding those whom invested in the creator's token, this is known as a "hard rug pull." Alternatively, a "soft rug pull" occurs after a token realizes increased value when the creator sells off the assets they minted themselves either for free or for very cheaply when they first launched the token, causing the price to crash. The most sophisticated types of scams are when hackers analyze the code of an existing decentralized finance platform, find an error, and manipulates the banking practices; these are known as flash loan attacks and can occur even when a project has been audited by an agency reputable in the digital asset sector.
It's good to save wealth and invest capital, but beware of grifts and frauds. There are many bad actors that, for their own pecuniary gain, will manipulate others into making poor decision. If you have lost an amount detrimental to your livelihood due to a bad investment a bankruptcy attorney can help you get back on your feet.
Free Consultation
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.

We are a debt relief agency. We help people file for bankruptcy relief.

Repairing a Household Budget Deficit with Bankruptcy

Wed, 15 Sep 2021 18:19:00 GMT

Bankruptcy is a powerful tool to be used only as a last resort after all other options to resolve a household budget deficit have been exhausted.

Do your expenses exceed your income? Are you over-burdened with debt that you can no longer pay back? Is it impossible to pay-off a mortgage arrearage in a timely manner? Bankruptcy can help you obtain a manageable financial position.

1. Eliminate Unsecured Debt

When a creditor lends money without requiring collateral, or a business performs a service prior to payment the amount owed is unsecured. In addition, if collateral is repossessed or foreclosed, and after the collateral is sold a balance remains on the note associated with it, that balance is unsecured. Most of these types of debt can be eliminated in a Simple Chapter 7 Bankruptcy .
2. Stop Wage Garnishment
After the collection attempts of a creditor fail they will seek a judicial remedy, often resulting in wage garnishment. In Illinois, a creditor can use a court ordered wage garnishment to collect 15 percent of a debtor's gross wages. Upon the filing of a bankruptcy petition it becomes unlawful for a creditor to engage in collection activity, including wage garnishment; and remains unlawful when that debt becomes discharged.
3. Cure Arrearage

By the time many become delinquent on a mortgage or auto-loan, they have already exhausted and become delinquent on other lines of credit. While it may seem impossible to overcome impending home foreclosure, vehicle repossession, and maxed-out credit card debt simultaneously, Chapter 13 Bankruptcy can help.

What is the difference between Chapter 7 & Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy is a short term legal process that discharges all debt, except for those the debtor would like to keep (i.e. auto-loan, mortgage). Chapter 13 Bankruptcy is a three to five year payment plan where a Debtor will pay back some or all of their debts, depending on their particular circumstances. Normally, people only file under Chapter 13 Bankruptcy if they make too much money to be eligible for a discharge under Chapter 7 or possess more property than can be protected under Chapter 7. However, Chapter 13 provides some benefits that are not available under Chapter 7.

During a Chapter 7 Bankruptcy, in order to reaffirm (keep and maintain) a mortgage, the provider of that mortgage will often require that a Debtor become current on his or her note prior to the discharge date. If it is not feasible to become current during this time frame a Debtor can instead file under Chapter 13, which allows up to five years to become current on a mortgage.

There are other niche benefits under Chapter 13 that are not available under Chapter 7, but the payment plan can be burdensome. Also, the attorney fees in a Chapter 13 are three or four times more than in a Chapter 7, although most attorneys will accept the majority of the fee through the three to five year payment plan. An experienced Bankruptcy Attorney can help determine which Chapter of the Bankruptcy Code is best for a particular individual.

Free Consultation
Call our office for a free consultation to determine if Chapter 13 Bankruptcy can be the solution to an otherwise unsolvable financial problem.
Bankruptcy is a technical practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

How can I keep my home and car through bankruptcy?

Wed, 15 Sep 2021 18:19:00 GMT

The amount of equity you have in your home or vehicle w ill determine how to best answer one of the most common questions people have about bankruptcy, "can I keep my home/car?"

Federal bankruptcy law provides means for people to seek debt relief while maintaining possession of both their home and vehicle; however the particular strategy for accomplishing this will depend on your particular circumstances.

If you are an Illinois resident, and have been for the past two years you are entitled to keep $2,400.00 in equity in any one automobile (if you are not an Illinois resident, or have not been for a two year period, you'll have to use another state's exemption law, which will likely have a comparable, but different rule). Hypothetically, let's explore (3) common situations:

1. You own a car outright, meaning the title is free and clear, and you make no monthly payment (except maybe car insurance payment) and the value of the car is less than $2,400.00. In this hypothetical you get to keep the car, no problem.

2. You own a car for which you are making monthly payments to a dealership or finance company, and the value of the car is less than $2,400.00 more than the note (or very commonly you owe more than the car is worth). Under this hypothetical you can keep the car (although you may not want to if you owe too much or the interest rate is too high); however you'll have to sign a "reaffirmation agreement" with the dealership or finance company, meaning the contract you executed for the vehicle prior to filing for bankruptcy, will survive the bankruptcy process.

Occasionally, creditors are willing to renegotiate a contract so that the terms of the reaffirmation agreement are more manageable than the contract signed prior to filing for bankruptcy. Also, if you're in a bad car note but NEED a vehicle, it's not a bad idea to explore options with other car dealerships while your case is open. During a chapter 7 bankruptcy, until you receive your discharge, you have a right to surrender your vehicle and treat the lien holder as an unsecured creditor, meaning that creditor will become discharged through bankruptcy law.

3(a). You own a vehicle outright that is worth more than $2,400.00, or the value of the vehicle exceeds the value of the note on the vehicle by more than $2,400.00. Under this hypothetical you can stack your "wildcard" protection on top of the $2,400.00 vehicle protection (the same residency rules described above for the vehicle protection apply to the wildcard protection). Illinois wildcard protection provides that any one individual may keep $4,000.00 in any personal property.

(b). Same circumstances as 3(a), but your wildcard protection is used to protect electronics, firearms, jewelry, or other valuables you cherish. Under this modified hypothetical you'll have to file for Chapter 13 bankruptcy in order to keep your car, which is a 3-5 year payment plan where you pay your creditors what they would have received had you filed for Chapter 7 bankruptcy. So, if you owned a car outright worth $5,000.00 and the only statutory protection available is the vehicle exemption of $2,400.00, that leaves $2,600.00 for the chapter 7 bankruptcy trustee to distribute to unsecured creditors (in a chapter 7 the trustee would return $2,400.00 to you, to possibly invest in new vehicle). Instead of giving up the car, you can pay to your unsecured creditors in a chapter 13 over he next 3-5 years, the amount they would have received in a chapter 7.

Illinois provides protection to the equity you have in your home in the amount of $15,000.00 per individual, or $30,000.00 to a married couple filing for bankruptcy jointly. Just like the car note in example 2, you can execute a reaffirmation agreement to keep your home after filing for bankruptcy.

If your home is at risk of being foreclosed, and your mortgage company isn't working with you, you can file for chapter 13 bankruptcy to force your mortgage company to accept a plan that will allow you to become current after 3-5 years.

Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.

If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.

We are a debt relief agency. We help people file for bankruptcy relief.

Using Bankruptcy to Leverage a Better Car Note or Get Out of a Bad One

Wed, 15 Sep 2021 18:19:00 GMT

Don't Reaffirm a Bad Note.

It's probably not advisable to file Bankruptcy for the sole purpose of obtaining a better car note, but if you're filing Bankruptcy because other things are weighing you down then you might consider shopping for a better deal during the Bankruptcy process.
Borrowing Money to Make Money

It can be difficult and expensive to get to work everyday without a vehicle. This is why it is tempting for consumers to apply for financing in order to obtain a reliable (and sometimes not so reliable) vehicle to ease the commute to and from their place of employment.

If a borrower with a poor credit score applies for financing, then that borrower will pay a higher interest rate. The logic is that the lender deserves to be reimbursed for the risk he or she is taking with a bad borrower.
Many lenders pre-compute the interest owed on a note, so that at the time the loan is made the borrower is liable for not only the principle but also the unearned interest.

Example: A borrower received $15,000.00 in financing for the purchase of a used vehicle at a 16 percent interest rate, paid over 48 months. Under a simple interest note, at the time the loan is made the borrower owes $15,000.00; but under a pre-computed note at the time the loan is made the borrower owes $15,000.00 plus the pre-computed interest of $5,405.00 ($20,405.00); resulting in a monthly payment of $425.10.
A higher interest rate causes a higher monthly payment. To mitigate the larger monthly payment many borrowers will enter into a long-term note on a used car. The problem with this strategy is that often the term of the note will survive the vehicle. If the note survives the vehicle the borrower is in a position where he or she must roll-over their old note into a new note for another car; likely resulting in an even higher monthly car payment. A note with a long term and high pre-computed interest is a recipe for disaster.
Example: The borrower in the example above cannot afford a monthly vehicle payment of $425.10 on his or her pre-computed note, so the borrower enters an agreement for a 72 month note for a monthly payment of $325.38. Under these circumstances the borrower will owe the principle of $15,000.00 plus pre-computed interest of $8,427.00 ($23,427.00) at the time the loan is made. If the car suffers serious mechanical issues and is no longer operable after 60 months, the borrower will still be liable for 12 months worth of payments, totaling $3,904.56. This is not an uncommon issue, it's usually solved by rolling over that balance into a new car note, however this solution is not sustainable.
Unless the borrower wants to purchase a vehicle of lesser quality than the first, which would be even less likely to survive a long-term note, he or she must borrow another $15,000.00 for another vehicle, plus $3,904.56 to pay off the last note, which includes 12 months of pre-computed (unearned) interest. At the time the loan is made, if the borrower enters another pre-computed note, under these circumstances the borrower owes the principle of $18,904.56 plus pre-computed interest of $10,621.00 ($29,525.56) paid over 72 months at $410.07. If the borrower defaults after making only 12 months worth of payments the creditor will repossess and sell the vehicle at auction. The borrower will then be liable for $24,604.72 (original amount owed subtracted by 12 monthly payments) less the proceeds from the auction, which is typically a lot less than the sale price the borrower purchased the vehicle for, possibly forcing the borrower into Bankruptcy.

Tip: If a borrower rolled a balance from a previous car note into their current note, then after 910 days (about 30 months) of purchasing the current vehicle, a debtor can file Chapter 13 Bankruptcy to "cram down" the value of the note to the value of the vehicle. The interest rate can also be crammed down to the prime rate plus 2 percent. In the example in the paragraph immediately above, after 30 months there would still be a remaining balance of $17,223.46 and the value of the vehicle would have surely depreciated over that period of time. If the vehicle appraises at $10,000.00 after 910 days after the purchase, and $17,223.46 is still owed, a Chapter 13 debtor can treat $7,223.46 of that note as unsecured, and potentially only pay 1% of that portion of that creditor's claim.
To Reaffirm, or Not?
More often than not, people want to keep their car through and after Bankruptcy, even if it means reaffirming a bad car note. Ultimately it is the client's decision whether they'd like to reaffirm a note, an attorney can only advise their client, not make decisions for them. An indication on the Bankruptcy Petition about whether a Debtor would like to keep or surrender their encumbered assets is not final. Even if a Debtor enters a reaffirmation agreement, that agreement can be rescinded up until a discharge order is entered by the Bankruptcy Court.
Sometimes Creditors are willing to adjust the interest rate, amount due, or monthly payments of a note in order to entice a Debtor to reaffirm the note under negotiated terms; but this is rarely the case.

Some attorneys may advise clients to do a "ride through" on a bad car note, but this is not safe. A ride through is when no reaffirmation agreement is entered, but the Debtor keeps the collateral and continues making payments. As long as the debtor remains current, the collateral will not be repossessed. However the Bankruptcy Reform Act of 2005 eliminated this mechanic. A creditor might agree to a ride-through, but a future dispute could result in expensive litigation over the legitimacy of the agreement.

Warning: Chapter 7 Bankruptcy will likely be the last chance for a debtor to get out from under a bad note for a long time.
Best Courses of Action: Shop Around

Upon filing for Bankruptcy, and until the case is closed, a debtor enjoys a protection known as the Automatic Stay which prevents creditors from pursuing any collection activity, including repossession. A creditor can motion the court to lift the automatic stay, but the court generally will not allow this unless good cause can be shown.
If a debtor is unhappy with his or her payment, interest rate, or principle amount on their car note, but needs the car to get to work, then the debtor should indicate on the petition that he or she intends to reaffirm the note, even if the debtor is unsure. Then, during the Chapter 7 Bankruptcy, which takes about three to four months, the debtor should shop around for a better deal.

Some lenders appreciate the fact that someone has recently filed for Bankruptcy for two reasons: 1) lenders assume that all unsecured debt is going to be discharged even before a discharge order is entered, and 2) lenders understand people can only file Chapter 7 Bankruptcy every eight years, longer than the term of most car notes.

If you're in a bad car note shop around before deciding whether you'd like to enter a reaffirmation agreement.
Can't Find a Decent Car Note: Buy a Clunker

You might not find a better deal on a car note, but there is still a better option than reaffirmation.

In many instances filing for Bankruptcy will clear up room in a person's budget. If a person indicates on the petition he or she intends to reaffirm, then they should probably keep making the monthly payments; but that person is entitled to change their mind, not reaffirm, and stop making payments. This course of action will free up even more room in a person's budget, allowing them to save up for a clunker during the Bankruptcy proceedings while making use out of the car they will eventually surrender.

WARNING: Don't lie on the Bankruptcy Petition. If a person is certain they are going to surrender his or her vehicle they should indicate so on their petition, this will allow the creditor to lift the automatic stay and repossess their collateral while the case is pending. However, if there is any doubt about surrendering, then that person is entitled to assert their intention to reaffirm and contemplate their final decision during the course of the Bankruptcy proceedings.
Before Entering a Finance Agreement:

Make a budget (everyone needs to know their budget regardless).
Make sure the monthly payment fits your budget.
Make sure the item is essential:
Do you need the biggest and baddest truck?
Or, do you need to get to work and provide for your family?
Shop around for a competitive interest rate.
Double digit interest rates are not good.
Review contract for pre-computed interest clause (often referred to as "Rule of 78s")
Be comfortable that the collateral will survive the note.

Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Attorney's Fee: Planning an Escape Before Garnishment, Repo, Foreclosure, etc.

Wed, 15 Sep 2021 18:19:00 GMT

Don't wait until your wages are garnished, car is repossessed, or house is foreclosed before consulting with a bankruptcy attorney.

How does someone in need of debt relief produce over $1,000.00 to file for Chapter 7 Bankruptcy? Someone planning ahead might manage to tighten their budget, and make payments to an attorney; but for someone whose wages are being garnished, or under some other financial burden resulting from unpaid debt, producing the amount necessary to file for Chapter 7 Bankruptcy is an implausible goal. This is why it is important to plan ahead.
How much does it cost to file for Bankruptcy?
A reasonable Attorney's fee for a Chapter 7 Bankruptcy may range anywhere from $500-$1,200.

Why the large price range? Some attorneys will offer a really low base price then charge additionally for every meeting or phone call leading up to the filing; and other attorneys will offer a large, all-inclusive price, rather than "nickle-and-diming" their clients whenever they need help. Most attorneys offer free consultation, make sure to ask your attorney about their policy before making a commitment.
Filing Fee : An attorney will also collect from the client a filing fee payable to the Bankruptcy Court, which totals $335 in a Chapter 7, but varies for other types of Bankruptcy. For more information about the various types of Bankruptcy and their respective filing fees, please refer to this link .

While the majority of an attorney's fee in a Chapter 13 Bankruptcy can be paid through the repayment plan, in a Chapter 7 there is no repayment plan, so the attorney must be paid his or her fee entirely upfront, or else what the attorney is owed will be discharged with the rest of their clients' debt. For a better explanation between the differences between a Chapter 7 and Chapter 13 Bankruptcy, please refer to this prior blog post .
How to Produce $1,000.00 for Bankruptcy:
DO NOT COMMIT A FRAUD : It is fraudulent to borrow money in order to finance a Bankruptcy. The creditor can object to the discharge, and the case may be dismissed subject to a 180-day waiting period for refiling
ASK FAMILY AND FRIENDS FOR HELP : Maybe there is a rich uncle or friend from high school that's willing to help out, but what if that friend or relative wants to be paid back? A debtor is welcome to pay back any creditor that has been discharged. If a friend or family member is willing to help with the fee, make sure that person understands repayment will not be legally enforceable after the bankruptcy discharge; otherwise the act of borrowing may be a fraud that can impact the bankruptcy proceedings.
BUDGET : This strategy is optimal because it prepares the Debtor for an economically sustainable lifestyle. There are several free resources that can be found on the internet to help facilitate creating a budget, but a spread sheet or pen and paper will work fine.

Remember, the normal goal in Chapter 7 Bankruptcy is to discharge all unsecured debts, and maybe some debts securing property that is no longer desirable to keep; therefore it is unnecessary to include payment for these debts in the budget. Excluding minimum payments on unsecured debt will help produce the amount necessary to hire an attorney, but you can expect collection calls to come in up until the date of filing. Waiting too long to file bankruptcy after ceasing payments to unsecured creditors could result in being summoned to claims court.
TAX TIME : Most people who are regularly employed receive at least $1,000.00 back in overpaid income taxes once per year. How wonderfully convenient that's about how much it costs to file for Chapter 7 Bankruptcy.

If you've been served with a summons and are not sure if you can make it to tax time before a judgment is entered against you, a judge may be willing to postpone your case for a little while if you've retained a bankruptcy attorney.
FREE CONSULT : Get a free consultation with a local bankruptcy attorney to determine how to best plan ahead for bankruptcy.
The Boiling Frog
The Boiling Frog is a popular metaphor proposing that if a frog is immediately immersed into water of a dangerous temperature, it will jump out; but if a frog is placed in water of a safe temperature, then that water is slowly brought to a boil, the frog will allow itself to die.
The prudent debtor is like the frog immediately immersed into dangerous water, perceptive of the consequences of a wage garnishment or vehicle repossession; as such the prudent debtor is likely to consult with a bankruptcy attorney at the first sign of a serious consequence of an unpaid debt, and come up with a plan of action while it is within their capacity.
The imprudent debtor is like the frog wading in water of a rising temperature, either pretending or foolishly believing their finances are under control; as such the imprudent debtor will wait to consult with a bankruptcy attorney until their wages are garnished, or vehicle is repossessed, debilitating them from paying an attorney to help solve their problem.

Be prudent, beat burdensome credit collection activity by consulting with a local bankruptcy attorney.
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Reasons to File Chapter 13 Bankruptcy

Wed, 15 Sep 2021 18:19:00 GMT

Chapter 13 Bankruptcy is an opportunity to pay back a portion of your debts through monthly payments over the course of three to five years, depending on your circumstances.

If you have unmanageable debt Chapter 7 Bankruptcy could be the easiest solution to your problems, however there are circumstances Chapter 7 Bankruptcy may not be available or desirable, under those circumstances it may be worth exploring the possibility of filing under Chapter 13 of the Bankruptcy Code.

How is Chapter 13 Bankruptcy different from Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy is approximately a three to four month process where the bankruptcy trustee will examine a debtor's assets, determining whether law provides that any of those assets are subject to liquidation for satisfaction of any claims against the debtor (most often law does not provide that debtor's assets are subject to liquidation).

Chapter 13 Bankruptcy is a three to five year payment plan that pays a monthly dividend to the creditors whom file a claim in a debtor's case. The length of the plan and the amount that must be paid to unsecured creditors depends on many factors of an individual's particular circumstances.
What are the specific circumstances that might lead someone to file Chapter 13 Bankruptcy?

The Means Income Test: Debtors that have significant income will not be eligible for Chapter 7 Bankruptcy. The Means Income Test calculates a debtor's monthly income based on pay records of the six months prior to the date of filing for bankruptcy (social security income is not included in this calculation). That monthly figure will then be multiplied by twelve to calculate an annual income. If that calculated annual income is greater than the Median Family Income for debtor's household size and state, then that individual will be ineligible for a discharge under Chapter 7 Bankruptcy, and may want to consider Chapter 13 Bankruptcy.

To learn more about means testing visit: https://www.justice.gov/ust/means-testing
Excess Income in Monthly Budget: The bankruptcy petition includes a statement of a debtor's budget. Case law suggests that if a debtor's monthly income exceeds his or her expenses by more than $100.00, then it is abusive to enter a discharge of that individual's debts under Chapter 7 of the Bankruptcy Code because that excess could be used to pay back unsecured creditors in a Chapter 13 Plan.

Usually, if a debtor can pass the Income Means Test, his or her attorney can help determine creative but reasonable solutions to address an excess income problem, however this is not always the case. Illinois's Median Family Income may not be a lot in the Chicagoland area, but in downstate rural areas of Illinois the cost of living is significantly less and the Median Family Income is a very comfortable living.

Too Much Equity: Under Chapter 7 Bankruptcy a debtor is entitled to exempt a certain amount of property from being taken by the Bankruptcy Trustee to pay unsecured creditors. If the debtor's assets exceed those exemption amounts, he or she may want to instead filed under Chapter 13 Bankruptcy in order to retain all of his or her assets.

To learn more about exemptions please refer to an earlier blog post: https://www.rsmithlawltd.com/will-the-bankruptcy-trustee-take-my-property

Chapter 7 Liquidation Analysis: The amount paid through the Chapter 13 Plan must pay unsecured creditors at least what they would have received had debtor filed for Chapter 7 Bankruptcy, which is the value of debtor's non-exempt assets reduced by the value of the Chapter 7 Trustee Fee as follows:

25% of any amount less than $5,000.00,
10% of any amount exceeding $5,000.00 but less than $50,000.00, 5% of any amount exceeding $50,000 but less than $1,000,000.00, and
3% of any amount exceeding $1,000,000.00.

The most common example of a debtor having too much equity is home ownership that is free and clear of any mortgage or other encumbrances to the property. An individual can only protect $15,000.00 of equity in a home (married couples can protect $30,000.00 if they are both on the deed to the home).

Example : Debtors, husband and wife, own a $50,000 home together, the deed is free and clear of any mortgage or lien, and they want to file for bankruptcy. If they file for Chapter 7 Bankruptcy it will be the Bankruptcy Trustee's legal duty to administer the sale of that home for the benefit of unsecured creditors. Regardless of what the home sells for, if the debtors assert their homestead exemption they are entitled to $30,000.00 of the proceeds from the sale of the home. The remaining funds will be used to pay the realtor, the trustee, and any unsecured creditors that file a timely claim in the Bankruptcy case. Alternatively debtors can file for Chapter 13 Bankruptcy, keep their home, and pay back their unsecured creditors over the next three to five years, in an amount equal to what those creditors would have received had debtors filed Chapter 7 Bankruptcy and surrendered their home.
Recently Received a Bankruptcy Discharge: In order to prevent abuse of the Bankruptcy Code, congress enacted laws limiting the frequency individuals may receive a discharge. A Debtor may NOT receive a discharge under Chapter 7 of the Bankruptcy Code if he or she has already received a discharge under Chapter 7 for a case that was commenced within the last eight years; or if he or she has received a discharge under Chapter 13 for a case commenced within the last six years (unless the Chapter 13 Plan is completed that pays 100% of unsecured creditors, or 70% of such claims AND the plan was proposed in good faith and best efforts were made, then no waiting period for Chapter 7 is required).

Home Foreclosure: Upon filing for Bankruptcy debtors enjoy the Automatic Stay, a protection preventing creditors from continuing any collection activity (i.e. solicitation, litigation, attachment, garnishment, foreclosure, etc.). A creditor can motion the Bankruptcy Court to lift the Automatic Stay, and may succeed under niche circumstances; however a court generally will NOT lift the stay for a mortgage lender if the plan provides that the loan be brought current before the expiration of the three to five year Chapter 13 Bankruptcy Plan.

Example : Debtor files for Chapter 13 Bankruptcy while significantly behind on both his home mortgage and another mortgage secured by a beach house, intending only to bring the home mortgage current and surrendering the beach house. The creditor for the home mortgage WOULD NOT likely be successful on a motion to lift the Automatic Stay because debtor intends to cure that mortgage and become current through the Chapter 13 Bankruptcy Plan. However if the creditor for the mortgage on the beach house motioned the Bankruptcy Court to lift the Automatic Stay, that creditor WOULD likely succeed because the debtor has no intention of making any further payment on that note.
License Suspension: If a debtor's license is suspended because of a debt owed to another arising out of an automobile accident where debtor did not carry insurance, then the debt owed to the individual or the individual's insurance company can be discharged in a Chapter 7 Bankruptcy, and the license may be reinstated upon paying a fee and providing proof of insurance required by law. However, fines payable to the government, like traffic citations, are NOT dischargeable under a Chapter 7 Bankruptcy.

Under a Chapter 13 Bankruptcy Discharge debtors are entitled to a discharge of non-criminal traffic offenses, which in Illinois include offenses that are NOT misdemeanor or felony. Therefore, if a debtor owes a government entity excessive parking fines and/or non-criminal moving violations, and as a result faces license suspension or has already had their license suspended; then by filing for Chapter 13 Bankruptcy a Debtor can maintain his or her driving privileges while possibly only paying a small portion of his or her fines.

Police or Regulatory Power : Actions or proceedings by a governmental unit to enforce its Police or Regulatory Power, like license suspension, are unaffected by the Automatic Stay. Whether an action constitutes a government Police or Regulatory Power is an evolving topic with sparse case law, therefore it is difficult to state with specificity a rule for making such a determination. However, a general interpretation of current case law suggests that if the purpose of the action is to collect money for the state or municipality, then it's likely outside the Police or Regulatory Power exception, and the automatic stay prevents collection activity. On the other hand, if the purpose of the action is to promote public health, welfare, morals, or safety, then it falls within the Police or Regulatory Power exception to the Automatic Stay and actions against a debtor may be maintained.

Example : Debtor has license suspended for failure to maintain required liability insurance on his vehicle. The failure to maintain required liability insurance does not relate to health, welfare, morals, or safety; therefore, upon filing for bankruptcy, any action taken against the debtor for this debt is a violation of the Automatic Stay and debtor must be given the opportunity to reinstate his or her license. However, the offense of failure to maintain required liability insurance is a misdemeanor, this means the debt cannot be discharged through bankruptcy because it is a criminal fine. If the criminal fine is not satisfied prior to the closing of the Bankruptcy case, then the state or municipality may continue collection activities.
Example : Debtor has license suspended for failure to maintain required liability insurance on his vehicle, then subsequently is convicted for driving while license suspended. Illinois is interested in promoting public safety by causing all drivers to possess a valid driver's license, therefore actions against a debtor for driving while license is suspended is NOT a violation of the automatic stay, and debtor must wait until the expiration of the suspension to reinstate his or her license.
These two examples illustrate the importance of promptly consulting with a Bankruptcy Attorney upon receiving notice that your license has been, or will be suspended.

Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Common Scams: Don't be a scam artist's victim.

Wed, 15 Sep 2021 18:19:00 GMT

Strangers will happily take your money if you let them.

Human history includes many examples of con-artistry, most of which have evolved into a modern version of its ancient counter-part. For example, in the middle ages someone might offer to sell a pig in a bag, and after the exchange of goods and/or currency the unsuspecting buyer finds that he or she has bought a cat in a bag; something of lesser value than what the buyer bargained for. This ancient scam can be easily facilitated in any peer-to-peer online marketplace when the seller substitutes the advertised good with something of lesser value without the buyer's consent (i.e. Buyer bargains for I-phone 8, and Seller delivers I-phone 7).

Bad Cashier's Check
A victim will receive a cashier's check with instructions to forward a portion of that check elsewhere. The victim will present the cashier's check to their bank, and their bank will make the funds available in their account. Days after the victim presents the cashier's check to their bank, and having forwarded a portion of the value of the check, the funds will no longer be available in the victim's account because the cashier's check was no good, and the person who delivered the check to the victim is long gone with the amount that was forwarded to him or her.

People Who Are Susceptible to Bad Cashier's Check Scam:

Small Business Owner: The owner receives a request for a good or service, and a cashier's check is delivered for payment in an excess amount with instructions to forward the excess elsewhere.
Private Seller on the Internet: The seller of a used vehicle receives payment in excess of the agreed price for the used vehicle, with instructions to forward the excess elsewhere.
Those Seeking Employment: The victim will be offered a job opportunity as a secret shopper and receive a cashier's check shortly thereafter. The victim will then be instructed to remit a portion of the check as an account activation fee or to send the entire amount via Western Union and later rate their experience.

Desperate People Generally: The victim will be contacted by a stranger stating the victim has won a foreign lottery. A cashier's check will be delivered to the victim, and the victim will be asked to forward a processing fee elsewhere. There are other variations as to why the victim is entitled to proceeds, such as an unclaimed estate of a long-lost deceased relative, or to smuggle money out of a foreign country.
Phone Calls

Fraudulent and deceptive solicitation has recently become the bane of owning a cell phone. Here is a list of the most common pitches used in deceptive sales calls.
Your vehicle's factory warranty has or is about to expire: The caller has no idea about the state of the Victim's vehicle warranty, this line is used on everyone, even those with brand new vehicles; sometimes the caller will know certain details about the vehicle, like make and model, probably because they've obtained this information through some nefarious means. This is an attempt to contract with the victim for a vehicle warranty, except it's super expensive and provides no real value. One business using this deceptive business practice has been court ordered to pay $4 million in restitution to its victims.
I am with the Police Department, I have a warrant for your arrest that I will serve on you if you don't pay X amount of dollars: Some scam-artists will call their victim impersonating a police officer that will come arrest the victim for some reason (a debt, missed jury duty, traffic fine, etc.) if the victim doesn't pay a fee. Sometimes the perpetrator has the ability to manipulate the victim's caller ID to indicate the call is coming from a Police Department. Police serve arrest warrants in person, not over the phone.

Grandchild in Need: A scam artist will ascertain the identity of the elderly victim, and their lineage, possibly through social media. The artists will then call the victim, impersonating a grandchild, persuading the victim to send money for an emergency, usually bail or a medical procedure.
Free medical alert device: The victim receives a call about a free medical alert device. The device may be free, if ever received, but if the victim provides their account information their bank account may be charged a monthly service fee even if they're never provided a service.

Lower credit card interest rate: The victim will pay a fee for a lower interest rate on their credit card, but the interest rate will not change.
Free vacation: The victim will pay a fee for his or her "free vacation," but there will be no vacation.
Social Security: Social Security cards cannot be suspended, the con-artists are after the victims' personal information.

Charity Request: Do not offer money to anyone soliciting for donations on the phone, it's very difficult to determine if the caller is a legitimate organization or a con-artist.
Do not make any statements during these phone calls. The caller can defraud the victim if he or she offers their personal information or sell that information to a third party for the third party to defraud the victim; and any affirmative statement can be recorded, and that recording used to assert that you have agreed to a contract that you will be charged for. Even pressing a key on the phone's number pad could be interpreted as a statement, so be careful. It may be advisable not to answer a phone call from a number that is not a saved contact, any indication that a phone number is connected to a private individual may encourage the scam-artists to strengthen their efforts towards that particular phone number.

Income predicated on receiving phone calls from potential customers
Some people, for work or any other reason, need to answer phone calls from numbers not saved to their mobile device. Under these circumstances if the person takes a call and is not sure whether the person is a scam artist, that person should identify the identity of the caller, an address, and a number you can call back. Before speaking with the caller about the service or product being offered make sure the name and addresses match up on the search engine of your choosing.* If the caller is a scam artist, he or she will probably hang up on you.

If the caller is an automated recording it's probably a scam artist. If it's not, the caller should have considered that an automated message may not be the best method of conveying vital information when there are several scam artists using that same method to cheat people.

*Many scam artists will create websites to corroborate who they say they are. YouTuber, Jim Browning, infiltrates a foreign call center in this video he uploaded onto his page .

Phishing

Phishing occurs when a scam-artists sends to a victim a message purporting to be someone they are not in an attempt to derive sensitive information from the target.

Example : Victim receives an electronic message stating "OMG look at this video of you on the internet" with a hyperlink to what appears to be a Facebook page. The victim then might click the link and be asked to sign into his or her Facebook account, except he or she is not actually on the Facebook web page, it just looks like it. The scam artists who sent the message set up a page on the internet to appear just like the Facebook login page, and when the victim attempts to sign-in to his or her account the scam artist receives the victim's log-in data.

Malware (briefly)
Trojan Horse

A "trojan horse" is software that the victim installs or downloads onto his or her own computer or mobile device that is designed to infect the victim's computer. The victim may believe he or she is downloading or installing something useful or enjoyable (i.e. game, weather app, anti-virus software), but what the victim actually receives is a computer virus, possibly compromising sensitive personal information of the victim.

For more information about Malware, visit this Wikipedia Page .
Be Aware of Con-Artistry
Know that there are people out there that have no problem defrauding others of their hard earned income. For more information about scams in our current society visit these websites:

https://www.usa.gov/common-scams-frauds
https://www.consumer.ftc.gov/features/scam-alerts

Who are the Bankruptcy Trustees, and how is property protected from them?

Wed, 15 Sep 2021 18:19:00 GMT

In the majority of cases, people filing for Bankruptcy keep all of their property. It is important to be honest with your attorney so he or she can determine how to best protect your interests.

It is the Bankruptcy Trustee's job to pay unsecured creditors by seizing and liquidating the assets of people who file for Bankruptcy. Fortunately, the Illinois Legislature has passed laws called exemptions to protect certain amounts of certain property. Below, find a review and explanation of the most commonly used Illinois exemptions:
Homestead Exemption: Each individual is entitled to keep $15,000.00 in equity in a home that they currently live in. Married couples that are both listed on the real-estate deed may combine their individual protections for a total of $30,000.00 in equity.

Equity = (Value of the Property) - (Value of Mortgage or Lien)

Wildcard Exemption: Each individual is entitled to keep $4,000.00 in any personal property (personal property does not include real-estate). This protection is often applied to household goods, recreational equipment, and financial assets; but it can generally be applied to anything that is personal property.
Vehicle Exemption: Each individual is entitled to keep $2,400.00 of equity in a single vehicle. Unlike the Homestead Exemption , married couples CANNOT combine their individual Vehicle Exemption in order to protect more than $2,400.00 of equity in a single vehicle; however individual debtors are entitled to "stack" any unused portion of their Wildcard Exemption onto their Vehicle Exemptionin order to protect more than $2,400.00 of equity in a vehicle.

Tools of the Trade: Each individual is entitled to $1,500.00 in tools or other professional assets used in their trade, the wildcard exemption can be used to protect value in excess of $1,500.00.

Necessary Wearing Apparel: Each individual is entitled to keep their regularly worn (non-luxurious) wearing apparel.
Public Assistance Benefit: For people that pay income tax, there is likely a pool of money with the IRS and the Illinois Department of Revenue (IDR) that will be returned to them after they file their tax returns at tax time. Even though the money is not received until tax time, the money in that pool when you file for bankruptcy is a present interest that the Trustee is entitled to claim at tax time if it is not properly protected. Example: If someone files for bankruptcy on October 31st, the trustee will be entitled to 5/6 of the return received at "tax time," unless the funds are properly protected (1/6 of that years return will be earned after the date of filing, so the trustee would not be entitled to that portion).
The Public Assistance Benefit protects the portion of your tax return that you will receive pursuant to earned income credits and child tax credits. There is a very important caveat to this protection, it can no longer be used once the tax refund is received. Bankruptcy Courts in Illinois have ruled that the protection provides that Debtors have a right to receive the Public Assistance Benefit, not a right to keep it. This is why it is important to consult with a Bankruptcy Attorney to help determine, strategically, the best time to file the petition. Portions of tax refunds not protected by the Public Assistant Benefit may be protected with the Wildcard Exemption.
Personal Bodily Injury: The trustee may take possession of a legal right against a third party, this includes claims against others for various types of bodily injury: auto accidents, slip-and-falls, dog bites, medical malpractice, products liability, or general negligence of some other sort. If you are in the midst of litigation or have a valid claim against another, it needs to be listed on the Bankruptcy Petition; both so that the trustee knows about it and your attorney can protect it.
The Personal Bodily Injury protection ensures that people who file for bankruptcy with a valid claim against another are entitled to receive up to $15,000.00 from a personal bodily injury award. If a court awards more than $15,000.00, that excess amount will be disbursed to unsecured creditors that filed a claim in the bankruptcy case. If the unsecured creditors that filed a claim are paid in full, after the trustee collects his or her fees, the remainder will be returned to the person who received the award for the injury.
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Simple Chapter 7 Bankruptcy (4 easy steps)

Wed, 15 Sep 2021 18:19:00 GMT

Chapter 7 Bankruptcy is a Simple Process for the Skilled Attorneys at Smith Law, Ltd.

With the assistance of a skilled attorney, Chapter 7 Bankruptcy is a simple and easy solution for a person with low to middle income, few unencumbered assets, and insurmountable debt. This 4-step guide serves as a preview of what a client experiences when filing for Bankruptcy with Smith Law, Ltd.

Step 1: Phone Consultation

Call our office to speak with an experienced Bankruptcy Attorney for a free 10 minute consultation. During this consultation the Attorney will ask the caller about basic personal information, income, assets, and debts to determine whether the caller is a good candidate for Bankruptcy. If the caller is a good candidate then the attorney or his legal assistant will set up an office appointment and send a Bankruptcy Worksheet to the caller so that it can be completed and brought to the office appointment.

Also, please bring to the office appointment tax statements for the two previous years, and records of all income received in the 6 previous calendar months.
Step 2: Office Appointment

The office appointment can also be free, however Smith Law, Ltd does encourage its clients to make a deposit on their account of $100.00. With that deposit the client can tell a judge or creditor that they have retained a Bankruptcy Attorney, possibly stalling adverse collection activity for a short amount of time. Creditors are not prohibited from pursuing collection activity until the Bankruptcy Petition is filed, and a Bankruptcy Attorney cannot file the Petition until he or she receives payment-in-full.

During the Office Appointment an attorney will collect any financial documents necessary for the administration of the case, and ask the client several questions in great detail about the entirety of their financial position (assets, debts, income, expenses), including any property transferred in the last two years. The Bankruptcy Attorney's purpose is to protect the client's assets, or if those assets cannot be protected in a Chapter 7 Bankruptcy advise of alternative solutions; undisclosed details frustrate that purpose.

Also, your Bankruptcy Attorney will provide you with brochures for (2) financial responsibility classes. One of those classes must be taken, along with payment-in-full, before the client can proceed to step 3.

Step 3: Sign Petition

At this meeting the attorney will review the Bankruptcy Petition with the client line-by-line, searching for any errors or omissions. At the conclusion of this meeting the Bankruptcy Petition should be ready to file.

After the Bankruptcy Petition is filed it will be assigned a case number, which can be used to complete the second financial responsibility class. If the client neglects to take the class, the case will close without discharge.

The next step, Meeting with the Bankruptcy Trustee, will be scheduled by the Bankruptcy Court approximately one or two months after the petition is filed.

Step 4: Meeting With Bankruptcy Trustee

The meeting with the Bankruptcy Trustee is the climactic moment of the Chapter 7 Bankruptcy process. If the client has been honest with his or her Bankruptcy Attorney, and has been diligent in providing the requested documents to their attorney, then the meeting will most likely be short and sweet.

The Bankruptcy Trustee will ask the client several questions that their Bankruptcy Attorney should have already asked at least 2 or 3 times in preparation of the Bankruptcy Petition; that's it.

After the meeting the client need only to wait about two months for a discharge order to be entered, and the case to be closed.

Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Has Coronavirus Created a Financial Hardship for You?

Wed, 15 Sep 2021 18:19:00 GMT

For those that cannot weather the storm . . .

Many businesses have had to shut down or throttle back due to Coronavirus. For many business owners and their employees these weeks and months of lost or significantly reduced income equates to economic insolvency. Hopefully, the spread of Coronavirus will continue to flatten in Illinois, businesses will reopen fully, and employees will return to work soon. However, there is a possibility that will not be the case.
The attorneys at Smith Law, Ltd., are knowledgeable in assisting those with financial problem with the goal to avoid Bankruptcy and we strongly encourage people to do their best to manage their budget by finding ways to reduce their expenses. The decision to file for Bankruptcy should be the last resort in searching for a solution to economic instability. We can provide counseling and assistance in avoiding bankruptcy and future financial difficulties.
How Can Chapter 7 Bankruptcy Help?
A Chapter 7 Bankruptcy can eliminate debts that are no longer feasible to maintain. Most unsecured debts are dischargeable including debt from credit cards, medical expenses, and pay-day loans. Chapter 7 Bankruptcy also provides the opportunity to surrender property that is no longer affordable to finance, like a boat, a second vehicle, or a vacation home. Eliminating these debts will reduce expenses, possibly providing for a manageable budget.
Sometimes Chapter 7 Bankruptcy isn't a good fit for those seeking debt relief. The U.S. Bankruptcy Trustee has established an income cap for those eligible for Chapter 7 Bankruptcy. Also, there is a limit to how much property can be protected in Chapter 7 Bankruptcy. If the petitioner does not wish to surrender property that cannot be protected, he or she can pay back the value of that property through a Chapter 13 Plan. Finally, mortgage arrearages cannot be cured in a Chapter 7 Bankruptcy; however, they can in Chapter 13 bankruptcy.
How can Chapter 13 Bankruptcy Help?
A Chapter 13 Bankruptcy is a repayment plan that can help the petitioner get caught up on debts secured by property (i.e. mortgage, car note, etc.). If economic hardship has created a threat of foreclosure or repossession, then Chapter 13 can stop that threat.
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Finding a Trustworthy Bankruptcy Attorney

Wed, 15 Sep 2021 18:19:00 GMT

Meet your attorney before making payment or entering a contract.

Hiring the wrong law firm can be an expensive mistake. Don't make that mistake. Meet your attorney before hiring them. Below is information that will help anyone find the right Bankruptcy Attorney.

THE SEARCH

1. Word of Mouth

The best place to begin the search for a Bankruptcy Attorney is with family and friends. Bankruptcy is an easy process for a well-practiced attorney, if the process is unpleasant a good attorney will have prepared their client for those unpleasantries well in advance. If a friend or family member that has filed for Bankruptcy had a good experience with their attorney, that's probably the best place to start.
2. Phone Book

The next best place to look for a Bankruptcy Attorney is the phone book. The phone book is full of local business people that care about their reflection on the community. While most brick-and-mortar businesses have declined over the last decade or so, attorneys still take pride in having a professional environment where they can meet clients face-to-face. Attorneys care deeply about their reflection on the community they are situated in because their reputation is their livelihood. If the community loses faith in a particular attorney, then that attorney will no longer bring in clients to support his or her business. When looking for legal representation it's best to shop local, and the phone book provides a great opportunity for shopping local.
3. Internet Search Engine

The internet is the best place to be taken advantage of, be familiar with the warning signs.
WARNING: Watch out for ads placed at the top of your search results!
When searching "bankruptcy attorney," or a similar term, the ads that populate the top of the search result may not be for an attorney at all. For instance, A "debt-relief" ad may lead to a debt consolidation company that promises to negotiate all the debts so that they can be paid off over a period of time for a monthly fee; but there is no enforcement for the negotiation, and often some creditors don't agree. So, the debt consolidation company does not actually provide relief at all, and the customer is in the same position they started, while the debt consolidation company has collected a fee.
Some ads are placed by firms without attorneys to service the area in which the ad is placed. These firms will accept payment from individuals where none of their attorneys are located and hang on to the fee indefinitely, until an attorney in that area joins the firm, or they are court ordered to return the fees. This conduct can cause a person in the midst of foreclosure proceedings to lose their home.
Some ads are placed by competent Bankruptcy Attorneys attempting to compete in the ever expanding online market place. There are a few ways to distinguish the helpful attorney from the predatory counter-part:
WARNING: Does the firm bear the owner's or owners' name(s)?
If a person is willing to put their name on the firm, then that person is prone to care how the firm reflects on the community and society-at-large. The owners of a firm named after a word in the English language may be preserving the integrity of their own names because they are not in complete moral and/or ethical accordance with the firm they are a part of.
WARNING: Visit the website
Stay away from link-less websites that say little about the firm and instead directs its visitors to contact a third party call center or provide information so the call center can contact the visitor. A good law firm's website might solicit calls and request contact information, but it will also provide information about the history of the firm and its attorneys.
WARNING: Internet Search the Firm's Name
Searching the firm's name could reveal interesting information about that firm.
THE PHONE CALL

The phone call is an opportunity for an attorney or their staff to spend 10-15 minutes gathering information about the client to determine if the client is a good Bankruptcy candidate, and setting up an appointment for a more thorough consultation.
It's best to speak with an attorney, unless the attorney is busy
An attorney can prepare a list of questions for the staff to ask a client, but only an attorney is trained to spot issues during the initial phone consultation. Furthermore, a good attorney will be anxious to begin developing a rapport with their clients, and personally answering a phone call from a client is a good step towards developing a hospitable relationship.
On the other hand good attorneys are often busy. If an attorney is so busy that he or she is often not at the office, then that attorney may have to delegate the initial phone consultation to support staff.

WARNING! A CLIENT SHOULD NOT MAKE PAYMENT OR ENTER AN AGREEMENT BEFORE MEETING THE INDIVIDUAL RESPONSIBLE FOR THEIR CASE.
There are large multi-state Bankruptcy Firms that use non-attorney call centers to screen prospective clients and collect payment, but the prospect does not speak to an actual attorney until payment is made in full. This practice creates two problems: 1) The prospect has no opportunity to meet with an attorney to determine whether Bankruptcy is a good investment, and 2) the prospect does not have the name of an attorney to hold liable for his payment.
Don't fall prey to a predatory "debt relief" business. Make a proper search. Choosing the right Bankruptcy Attorney is the first step of due-diligence towards financial reform.

Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Chapter 13 Bankruptcy for Small Businesses

Wed, 15 Sep 2021 18:19:00 GMT

Chapter 13 Bankruptcy Can Help a Small Business Recover from Economic Hardship

An Opportunity to Recover from an Economic Drought

The environment we live in is chaotic, causing certain detrimental occurrences to be outside of our control. Chapter 13 Bankruptcy can help a business owner recover from temporary uncontrollable financial devastation by putting together a Federal Court Ordered 5-Year Repayment Plan.
Keeping Property Essential to Business Activities
Many small business owners cannot file for Chapter 7 Bankruptcy without losing the means to continue operations. Chapter 13 Bankruptcy allows petitioners to keep some or all business related property, so long as the value of that property is paid back to unsecured creditors over a five-year payment plan.
Some Debt may be Discharged without Tax Liability
Unsecured debt exceeding the petitioner’s net worth is discharged. In addition, a petitioner is not required to pay back the value of any property that is exempt under state law (in some cases and states exemptions under federal law apply).
Keep Good Records
It is the Bankruptcy Trustee’s duty to conduct a complete and thorough analysis of whether the repayment plan proposed is both feasible and in good faith. If a business owner cannot provide adequate records (i.e. profit-loss statements, income tax statements, bank statements, etc.), then the Bankruptcy Trustee cannot adhere to their duty, and the plan will not be confirmed.
Chapter 13 Bankruptcy is NOT a D.I.Y. Project
There is a significant amount of legal code dedicated to the process of Bankruptcy, and an even more significant amount of case law interpreting that code. Only a local professional who regularly practices Bankruptcy will possess an understanding of how the law is applied in your area. In addition to understanding the local nuances, the Bankruptcy Attorney in your area will possess a developed rapport with the local personnel (Bankruptcy Trustee, Bankruptcy Judge, and their respective staff).
Free Consultation
Call our office for a free consultation to determine if Chapter 13 Bankruptcy can be the solution to an otherwise unsolvable financial problem.
Bankruptcy is a driven practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.

Before withdrawing your 401k to pay debts, consider Bankruptcy.

Wed, 15 Sep 2021 18:18:00 GMT

You may be eligible for a fresh-start while maintaining your retirement plan.

It is common for someone unfamiliar with bankruptcy law to use some or all of their 401k savings to pay debts when it becomes apparent their budget is not feasible. If income cannot satisfy debt over time it might appear that the only solution is to use retirement savings to satisfy the debt. However, there is a solution that will allow those under financial duress to eliminate many of their debts while maintaining possession of a qualified retirement plan.
The adequacy of Social Security is not certain, and may become even less certain in the future.
According to an article published by the AARP, the average monthly distribution for a Social Security recipient in 2021 is $1,543.00. In the two months preceding the publication of this article we have seen the highest inflation rates we've seen in over a decade of 4.2 and 5 percent for April and May respectively. For Social Security to maintain pace with the inflation rate we can increase the percentage of Social Security withholdings, we can increase the age for retirement, or the Federal Reserve can print more money, further exacerbating an already high inflation rate.
Furthermore, the population of those 65 years of age and above(retirement age) continues to outpace those between the ages of 20-64 years of age (working age). According to the U.S. Census Bureau in 2003 there were 80 working aged people to support 20 retirement aged people, today there are 72 working aged people to support 28 retirement aged people. Furthermore, we've developed a society where advanced education is requisite to enjoy a life of financial stability so that it might no longer be appropriate to label those with 20-24 years of age as working aged. If we remove those aged 20-24 from today's working class population we have 69 working aged people supporting 31 retirement aged people.
Qualified Retirement Accounts are 100% protected from seizure in Bankruptcy under Illinois Law.
Over time chromosomes decay from atmospheric radiation causing susceptibility to natural entropy and decay inhibiting the capacity for labor and cognitive functions, so that an elderly person will eventually find they cannot perform the tasks they were able to when they were younger. It is unfortunate to see someone spend the last decade or so of their life on an inadequate fixed income under financial duress with no feasible solution. A solution to avoid this miserable fate is to make regular contributions to a 401k or other qualified retirement plan, and never withdrawing until retirement.

What if you withdraw your 401k and find more debt than you had anticipated?
Our society has a convoluted medical billing procedure, often it is not apparent what the cost of a medical service will be until a bill is received about a month after the service occurs. Even after a bill for a particular medical service is paid there might be an additional service charge by another provider included in that same service, but their fee was not included in the first bill.
Sometimes a person might withdraw their 401k to pay off a debt, but afterwards finds there is additional debt that the 401k withdraw will not cover, and then decides to file for bankruptcy. By this time it is too late to protect the 401k, it loses its "exempt status" upon withdraw.
Bankruptcy is not for everyone.
Those with jobs that require a certain amount of financial responsibility may not be able to file for bankruptcy without a significant detriment to their livelihood (i.e. lawyers, accountants, bankers). For these individuals tapping into the retirement account could be a better option, especially because it's not uncommon for people to work into their 70s in these professions.
Free Consultation
Call our office for a free consultation to determine if Bankruptcy is the solution for you.
Bankruptcy is a technical practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.
Smith Law, Ltd.
(217) 345-6222
622 Jackson Avenue
Charleston, IL 61920

The perfect time for a fresh start and a new beginning

Wed, 15 Sep 2021 18:18:00 GMT

It feels good to prioritize saving money above paying debt.

Many people have accumulated debt during the period of the Coronavirus pandemic. Upon expiration of federal programs such as the unemployment bonus and eviction moratorium their financial circumstances may have changed so that the debt they accumulated is no longer manageable. Fortunately there are many business hiring and offering competitive wages, however those wages may not be so competitive as to provide for the timely resolution of debt that has been accumulated. The laws of the U.S. provide a solution to this hardship termed Bankruptcy.
Bankruptcy eliminates the most common types of debt which include, but are not limited to, debt from credit cards, medical bills, and past-due-rent. In addition to eliminating debt, bankruptcy also allows filers to keep certain debts that are necessary to maintain possession of collateralized property like a home or vehicle.
Saving wealth is vital to obtaining a better standard of living. For young people wealth is a means of undertaking a business venture. For middle-aged and elderly people, wealth is a means of retirement. A history of financial hardship and accumulation of debt is detrimental to the ability to save wealth. Bankruptcy can eliminate that detriment.
Free Consultation
Call our office for a free consultation to determine if Bankruptcy is the solution for you.
Bankruptcy is a technical practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.
Smith Law, Ltd. (217) 345-6222 622 Jackson Avenue Charleston, IL 61920

How likely are my neighbors to discover I have filed for Bankruptcy?

Wed, 15 Sep 2021 18:18:00 GMT

It is unlikely your neighbors will find out unless they are a Creditor, Co-Signor, or someone to whom you've made a "preferential transfer."

Bankruptcy is a corrective measure against outrageous medical expenses, inequitable lending and banking practices, and a dysfunctional social security system. Victims of broken social systems should NOT be ashamed of asking their government for equitable relief. By removing the negative stigma away from bankruptcy more people will likely file for bankruptcy, penalizing industries for inequitable or even predatory practices.
Medical and Health Care

Patients of medical services rarely have the opportunity to agree to an out-of-pocket expense in exchange for a given procedure, instead people have a procedure and pray that their insurance company will provide for all but a reasonable co-pay. The average monthly cost of medical insurance in Illinois for the year 2021 is $6,203, while Illinois' median income is $58,698.00. It is absurd that a person pay over 10 percent of their gross income for health insurance that covers only an undeterminable amount of any given procedure. The cost of ambulance rides are so expensive it's not unreasonable to flee from paramedics while injured. Insurance agents, not doctors who have attended medical school, decide if an emergency air-lift is medically necessary. Healthcare providers that exploit the sick and injured deserve to be deprived of their accounts receivable.
Banking and Lending

Sub-prime lending practices are oppressive and banks disincentive saving by providing interest rates that do not maintain pace with inflation. According to multiple third-party sources, sub-prime personal loan companies might charge 20-35 percent interest, while a traditional savings account provides for only .01-.5 percent interest, a rate far below inflation. Even prime loans charge an interest rate of 5-15 percent, so that the best interest rate you might pay to borrow from a bank is at least ten times greater than what a bank will pay to borrow from their customers' accounts. Banks are interested in discouraging savings so that when an individual experiences an emergency or unanticipated expense the only option is to borrow from, and pay interest to, the bank.
Banks are not required to possess the amount of money they lend, instead they borrow from the Federal Reserve at a rate that is fractional to the rate of their customer they are lending to, so that they are mere middle-men charging an outrageous premium. Furthermore, the Federal Reserve simply prints more money at the request of the bank making the loan, furthering inflation.
Our federal government lends tens of thousands of dollars to teenagers, without significant income or assets, for the pursuit of an education that may or may not provide access to a career that will allow the inexperienced borrower to repay the loan. Our incomes are taxed and our currency inflated in order to provide for these loans that may or may not be repaid, so that often the only beneficiaries of this arrangement are the Universities that the federal loans are paid to.
Social Security
With increased age people naturally degrade. Muscles, bones, and tendons become rigid, and natural radiation in our environment deteriorate our chromosomes causing vulnerability to disease and illness. In many instances people are forced to retire due to health issues whether or not they are financially prepared to do so. The average monthly distribution for a Social Security recipient in 2021 is only $1,543.00, an amount adequate to supplement retirement savings, but inadequate as a sole means of income.
Many individuals retire with debt and their savings is either inadequate to resolve the debt or resolving the debt may result in an inadequate sum for retirement. The problem created by paying debt with retirement savings is that it increases the likelihood of financial instability during the end of life, when many find they are physically constrained from generating an income outside of social security.
Bankruptcy IS Public Record, but . . .
Bankruptcy is public record, however access to those records requires a PACER account (public access to court electronic records) which requires credit card information so that the account holder can be billed 10 cents per page viewed, so that it is unlikely a person that does not regularly participate in federal court will discover your case. Newspapers typically report legal events occurring in the local county, however rarely, if ever, are legal events occurring in Federal Court reported. Therefore, your neighbors are unlikely to discover your bankruptcy.
Persons and Entities that WILL discover a bankruptcy:
A Bankruptcy petitioner is to include all of their creditors, even those of debts they may want to retain. Creditors are placed on a mailing matrix and receive notice of the bankruptcy. Co-Debtors are NOT placed on the mailing matrix, however if a person has co-signed a note that they wish to discharge in Bankruptcy, the co-debtor is likely to discover that the the person they once shared liability with is no longer liable to the note.

Preferential transfers are payments made to, or on behalf of, insiders (friends and family) in the year preceding bankruptcy. The bankruptcy code does not allow an individual to transfer property to an insider when the property could have been used to pay off a debt, even if the transfer is in satisfaction of a legitimate debt; the non-insider creditors are entitled to the equitable distribution of the property transferred. A failure to list preferential transfers on a bankruptcy petition is perjury and may result in a denial of discharge and possibly criminal liability. If a significant preferential transfer is listed on the bankruptcy petition the Bankruptcy Trustee will likely contact the person to whom the transfer was made and request turnover of the property transferred so that he or she can distribute it evenly among the Debtor's creditors.
Free Consultation
Call our office for a free consultation to determine if Bankruptcy is the solution for you.
Bankruptcy is a technical practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.
Smith Law, Ltd. (217) 345-6222 622 Jackson Avenue Charleston, IL 61920

How will bankruptcy affect my spouse?

Wed, 15 Sep 2021 18:18:00 GMT

Married people may file bankruptcy jointly with their spouse, but they may also file separate.

Married people may file bankruptcy jointly, which is often in their best interest, however sometimes only one spouse possesses significant debt while the other spouse has manageable debt with a good credit score. Many married people considering bankruptcy are curious whether their spouse will become liable for their debt or how jointly owned property will be affected.

Illinois Family Expense Statute

In Illinois, if a married person files for bankruptcy and their spouse does not, then the spouse may be held liable for those debts that arose from "expenses of the family and of the education of the children." Because the statute does not define "expenses of the family," it has been left to the courts to determine the meaning.

In March of 1999, an Illinois Appellate Court provided a list of goods and services that Illinois Courts have found to constitute "expenses of the family," which include the following expenses:

1. hospital, medical, and funeral;

2. utilities;

3. clothing;

4. jewelry (split decision);

5. carpeting;

6. rent; and

7. wages for a domestic servant

Family expenses do not include business expenses even though they are used to provide an income for the family, also do not include repayment of a loan for cash.

Illinois courts have determined that a claim for money lent in the form of cash is not recoverable from the non-consenting-spouse under the Illinois Family Expense Statute. The debt must have been in exchange for a specific good or service for the benefit of the family.

The courts have NOT determined whether a credit card company can recover from a non-consenting-spouse under the Illinois Family Expense Act. If a credit card is regularly used to pay a grocery bill, then a credit card company might have an argument that their debt should be recognized under the Illinois Family Expense Statute. On the other hand, the Debtor may argue that the same determination made with regard to a money lent should be applied to a credit card, because they are essentially the same product, credit cards are just further along the technological curve.
In 2009 a bankruptcy trustee, the person who's duty it is to represent the creditors in a bankruptcy case, attempted to recover from the non-filing spouse, alleging liability for credit card debt which was used to benefit the family. The Bankruptcy Court determined it was outside the trustee's power to pursue claims against third parties on behalf of the creditors and declined deciding whether credit card debt was recoverable against the non-filing spouse.

A Practitioner's Perspective on the Illinois Family Expense Statute

In Illinois, credit card companies are not pursuing claims against the non-filing spouse of account holders who have filed for bankruptcy. The most threatening type of debt a non-filing spouse faces is medical debt. Hospitals employ aggressive means of debt collection and they will pursue claims against a spouse.
Jointly Owned Property
The nuances of property law vary between districts, that's why it's important to seek the advice and assistance of a professional experienced with the laws and process in their geographic region. The following are examples of questions an attorney might ask a married person consulting about bankruptcy:

-If you own your home are both you and your spouse on the deed to that home? -Under whose names are your vehicles titled? -Do you own any significant pre-marital assets?
DO NOT TRANSFER TITLES OR DEEDS IF YOU ARE CONSIDERING FILING FOR BANKRUPTCY Transferring property prior to bankruptcy may draw suspicion from the U.S. Trustee who is employed by the Department of Justice. Under certain particular circumstances a person filing for bankruptcy may argue that they do not actually possess an equitable interest in property that is titled or deeded in their name, transferring property prior to bankruptcy will hinder such an argument.

Free Consultation
Call our office for a free consultation to determine if Bankruptcy is the solution for you.
Bankruptcy is a technical practice for an experienced debt relief attorney, like those at Smith Law, Ltd. Because there are so many nuances in the application of bankruptcy law, it is inadvisable that an individual not experienced or knowledgeable about Title 11 of the U.S. Code, and how the courts have interpreted those laws, to file bankruptcy without the assistance of counsel.
If you would like to speak to experienced debt relief attorneys, please contact Smith Law, Ltd.
We are a debt relief agency. We help people file for bankruptcy relief.
Smith Law, Ltd. (217) 345-6222 622 Jackson Avenue Charleston, IL 61920