All posts by Joseph Wrobel

Bankruptcy Basics: June Answers to Frequently Asked Questions

Answers to Bankruptcy FAQs

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

CLICK/TAP HERE TO LISTEN TO THE PODCAST

Topics and types of FAQ covered in this 30 minute show:

  • What happens to additional debt incurred during a Chapter 13 bankruptcy;
  • How to address incorrect or updated  amounts listed in the bankruptcy petition;
  • What happens with auto accident and injuries and Chapter 7 bankruptcy;
  • How are 401K contributions addressed in bankruptcy.

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973 he earned a JD from DePaul University Law School.

Visit our Chicago Bankruptcy Site online for more about the firm. You may also contact Joseph Wrobel for more information at (312) 781-0996 and by e-mail at JosephWrobel@ChicagoBankruptcy.com

Credit scores and bankruptcy: make a plan to boost your credit rating

Filing a petition for bankruptcy relief is not usually the first thing people consider when trying improving their credit score. In this short article, several financial factors are considered that can help you make sense of credit score issues and how you can work to build good credit after bankruptcy. First, let us look at how credit scores (“FICO Scores”) are calculated. The most important factor is your payment history and whether you have paid your credit accounts on time. In a close second place, the amounts owed on credit accounts, and if you are maxed out on credit cards, that can hurt you. The length of your credit history, types of credit you are using and how new your credit score is are three additional factors. For more information on FICO Score calculations, please visit this FICO Score site.

The ability to make timely payments on reasonable amounts of debt is important to a positive FICO Score. If you do not earn enough income to pay your credit cards on time, every time, you are risking damage to your credit. Likewise, if the debt amounts are so high that your income will only allow you to make minimum payments, your credit score will suffer. If you take advantage of bankruptcy protection and eliminate credit card debts you cannot pay, you will likely be able to better pay your regular bills, like car and housing payments on time. Nevertheless, if you file a petition for bankruptcy protection, will that affect your credit score?

It is tough to say how much a bankruptcy will affect the credit score because there are so many variables in the equation. Notwithstanding, FICO released information in 2010 regarding credit mistakes and their affect on credit scores. The hypothetical scenarios FICO used showed the higher credit scores were more affected by bankruptcy. For example, a 780 score could be reduced up to 240 points where there were only 150 points taken off a 680 score. At the end of the day, most scores ended up around 540. The reality is most of the people who seek bankruptcy protection already have challenged credit and their scores will only improve after bankruptcy reduces the amount of debt and monthly bills.

With less monthly bills to pay, people who took advantage of bankruptcy discharge and reorganization using Chapters 7 or 13 have an easier time paying bills on time. When you pay bills on time, the most important factor in your FICO score, your score will slowly but surely increase. Most professionals will tell you that the bankruptcy is not as important financially, as what you do with your credit and bills after the bankruptcy.

After bankruptcy, rebuilding credit is easy if you work hard and pay attention to how the system works. Secured credit cards, credit unions and some smart budgeting makes it very possible to establish credit after bankruptcy and buy a home and a car. For more information please read our blog article, Credit Unions: Offering members opportunities to easily and affordably earn positive credit scores.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’sFacebook page and Follow Joseph Wrobel. Ltd. onTwitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

Jack’s story: When bad things happen to good people and they make it through bankruptcy

When to take advantage of Chapter 7 and 13 is circumstantial. Here are a few things we hear from clients who tell us how and when they decided to move forward towards a fresh financial start.
When to take advantage of Chapter 7 and 13 is circumstantial. Here are a few things we hear from clients who tell us how and when they decided to move forward towards a fresh financial start.

A friend suffering from financial troubles and bad credit recently shared their story about his experiences shortly after his bankruptcy discharge. For this article, we will call our friend “Jack.” He was impressed that during his bankruptcy case, the only people who knew his financial woes were his listed creditors and his immediate family he told about the bankruptcy. When Jack told his ex-wife, she thanked him and said she had heard of ex-spouses using bankruptcy as a tool to avoid child support. Jack always put his kids first and would take extra jobs if he needed to support them. Jack really is a good guy and worked hard to save money and do things right.

Jack worked hard at his job in the career services department at a local college and he felt very lucky to have a good job during the economic troubles that started in 2008. Even though Jack worked to help graduating students and young alumni find jobs, his own position was in jeopardy and he had no idea. He worked in a satellite location of a larger university whose board of directors voted to approve a resolution to sell the location where Jack worked due to a consistent decrease in student enrollment. At first it looked like Jack would be moved into a similar position at another location but it did not pan out.

After the severance ran out and Jack started dipping into his 401k to pay the mortgage and bills because he couldn’t find another job, other than a lesser paid position. Jack accepted an hourly administrative position that offered benefits working at an insurance company. The money was less and his child support was reduced but he was happy to be working again after being unemployed for over a year while he depleted all his cash reserves.

Out of cash and facing bills he couldn’t pay, Jack was unsure how he was going to keep everything paid and still have time to see his kids when he had visitation every other weekend. His second priority after family was his home, the one in which he grew up and was on an acre lot in an area that became built up with subdivisions over the past few decades.

When he first looked into bankruptcy, Jack felt defeated. He started to adjust his expectations to prepare for his new reality. Whether it is fair or not, Jack was resolute to keep a positive attitude and work hard to continue on a smaller budget.

At the office of his bankruptcy attorney Jack just about fell out of his chair when he learned, he may be able to keep his house and a few prized possessions by filing for Chapter 13 bankruptcy, as opposed to a complete discharge under Chapter 7. The Chapter 13 reorganization plan allowed Jack to discharge a portion of his debts and make structured payments to the trustee so he could come up for air.

Since the bankruptcy, Jack found a better job in his field and was able to save more money to spend with his kids and his new fiancée. The bankruptcy laws are there to help people like Jack who get slammed by life through no fault of their own. If you know someone like Jack, we can help them at Joseph Wrobel, Ltd.,

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

June 1st fee increase at the Bankruptcy Courts

New Bankruptcy Fees to Take Effect June 1
New Bankruptcy Fees to Take Effect June 1

Periodically the filing fees in U.S. federal and state courts increase. The Bankruptcy Court will be increasing its fees for filing and general services. The new rates take effect June 1, 2014. If you are on the fence regarding filing a petition for bankruptcy relief, now may be a good time to get the ball rolling if you want to avoid the fee increase, which is not very much money, but at the end of the day we all like to save a little jingle for our pockets.

If you want to learn about what we do with clients in our free initial consultation you can listen to our upcoming podcast specifically about those final decisions to file and what happens when you come meet us at one of our offices.

Click/Tap Here to listen live at 1 pm on Tuesday the 27th of May or anytime afterwards on demand.

Topics and types of FAQ covered in this 30 minute show:

  • How to prepare to come in and meet with an attorney for an initial consultation;
  • What to expect to discuss with the attorney and what you will need to do next;
  • The attorney’s role in the process of meeting for a bankruptcy consultation;
  • What next steps a person can take to prepare to file for bankruptcy protection.

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“New Bankruptcy Fees to Take Effect June 1”

Several bankruptcy fees will increase on June 1, under amendments to the Bankruptcy Court Miscellaneous Fee Schedule that were approved in March by the Judicial Conference of the United States. The scheduled changes include:

    • A $57 increase to the adversary filing fee in bankruptcy proceedings, from $293 to $350. The new fee will be equivalent to civil filing fees in federal district courts.
    • A new, differentiated administrative fee structure will be assessed at filing in every bankruptcy case. Currently $46 in all cases, the administrative fee will be $75 for cases filed under Chapters 7, 12 and 13, and $550 for cases filed under Chapters 9, 11 and 15.

The Judicial Conference also approved separate administrative fees when married couples divide a bankruptcy filing into two cases, often because a divorce or separation occurs while a case is being adjudicated.

The schedule for the new rate structure, effective June 1, is available here. The existing schedule, valid through May 31, is available here.

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Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

Bankruptcy Basics: What Happens at the Free Initial Consultation

What may seem to be the simplest of cases turns out to be more complicated than a client can imagine. Filing a bankruptcy on your own is pennywise and pound foolish. The peace of mind of knowing the case is done properly from the outset is worth far more than the cost of the attorney fees. Our consultations are always free.

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

CLICK/TAP HERE TO LISTEN NOW

Topics and types of FAQ covered in this 30 minute show:

  • How to prepare to come in and meet with an attorney for an initial consultation;
  • What to expect to discuss with the attorney and what you will need to do next;
  • The attorney’s role in the process of meeting for a bankruptcy consultation;
  • What next steps a person can take to prepare to file for bankruptcy protection.

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973 he earned a JD from DePaul University Law School.

Common misconceptions about bankruptcy

Common misconceptions about bankruptcy
Common misconceptions about bankruptcy

Too often, people make their financial decisions based on drug store logic or what a relative told them about their personal experience. There are many different misconceptions flying around out there when it comes to what is and what is not allowed when you file a petition for bankruptcy protection. The Bankruptcy Code and cases that interpret it and policy involved are very complex and every situation is different. Just because something was true for one does not mean it will be true for another. It is always a good idea to hire an experienced bankruptcy lawyer who has likely seen your personal situation before, or at least something close to it.

Here are some common misconceptions about bankruptcy that we have seen over the years in our offices. Note the links to our blogs and podcasts with more information.

●     Everyone in the neighborhood will find out about you filed for bankruptcy protection. Unless you go around telling all your neighbors that you filed for bankruptcy, most of them will never know. Larger cities often do not have enough room or work force to publish all of the bankruptcies filed because there are so many in a larger city.

●     You will never be able to get credit ever again. This is far from the truth. In fact, many people start establishing good credit right after their bankruptcy or even during it by using a secured credit card, for example. In many cases, your credit score will rise when you no longer have so much outstanding debt, but know that the bankruptcy will be on your credit report.

●     All your debts will go away when you file for bankruptcy. The easy lawyer’s answer is, “Not necessarily.” There are certain debts like student loans and child support obligations and generally, you cannot discharge these in bankruptcy. There are also debts that are reorganized when you file a Chapter 13 bankruptcy.

●     You will lose your home and your car when you file for bankruptcy. Do you want to lose your home? You can if you would like but in most cases, involving bankruptcy people have already spent the equity in their home. There are certain amounts of equity in a home that you get to keep as an exemption. You may also keep assets for which you make payments, such as a car, by reaffirming the debt. If that car is not worth a certain amount, you may be able to keep it under an exemption.

●     The boss is going to fire you Monday morning when he finds out you filed for bankruptcy. No way! If she or he does, you may find yourself in quite an actionable position because there are federal laws protecting employees for being fired for filing for bankruptcy and their economic status generally.

●     You cannot file for bankruptcy unless you are broke. Also not true. You will have to pay filing fees and attorney fees so you must be able to at least pay those. You are allowed to keep a certain amount of cash allowed by law. If you do not pass the means test for Chapter 7 bankruptcy, the total discharge, you can file for Chapter 13, which is helpful for higher income earners.

●     You will never be able to buy another new home if you file for bankruptcy. Actually, many say you can finance a new home and sign a mortgage within 4 years of a bankruptcy, which again varies by location and individual circumstance. With less debt, it makes sense to save money for a larger down payment. In the meantime, renting a home is a common option and is rather painless if you do have to move.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

Steps to a new home after bankruptcy

Yes, you can get a new mortgage loan or refinance after bankruptcy but it will take some patience and planning. Most lenders suggest you wait at least two to three or sometimes four years after your bankruptcy discharge to get into a new home loan. There are several options for post-bankruptcy home buyers such as FHA and VA loans, USDA loans and conventional loans.

FHA and VA loans are available two years after the date of a Chapter 7 discharge or after 12 months of timely payments on a Chapter 13 bankruptcy. Bankruptcy court approval is necessary to get the loan and you must explain the bankruptcy in the process. USDA loans require a three-year wait from a Chapter 7 and the same 12 months of timely Chapter 13 payments, with court approval. The conventional loans are four and two year waiting periods after Chapter 7 and 13 respectively.

Use the waiting time to get your new financial habits and savings in order.

Right after bankruptcy you may feel like the pressure is off and there may be disposable income for the first time in a while. Of course, there is a tendency to want to spend that extra money on the things you could not buy or do when under financial pressure before bankruptcy. Go ahead and splurge for a little while then pull in the purse strings and prepare to get credit worthy.

Take steps to establish your good credit habits. Start with a budget of all fixed monthly expenses and make a plan for how income will be spent every month. The most important thing you can do after a bankruptcy is not to get into any new unnecessary debt. It can take time to get used to living without things you do not really need and you may learn to really appreciate not feeling the stress of needing so many extras. Even buying more groceries and cooking from home instead of eating out is a habit that can save lots of money for future uses.

Money saving habits are contagious and good habits tend to spread.

Saving money is a habit, and it can be tough to learn. An easy way to save is to tuck money way automatically without being able to spend it. Open a savings account at your bank or credit union and set up an automatic online transfer of some amount of money to pull from your checking account right on or after payday deposits. You can also go to your human resources department to find out how easy an automatic withholding can be taken from your paycheck and directed to your savings.

Saving money and watching it grow is rewarding. When you start seeing lower interest rates, frequently paid bills and savings growing you may just keep trimming expenses and taking steps to increase income and savings. The fruits of our efforts help keep us motivated to be financially successful. In addition to saving money and avoiding further debt, credit management is necessary because you will need to qualify for a new mortgage like anyone else.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’sFacebook page and Follow Joseph Wrobel. Ltd. onTwitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.

Bankruptcy Basics – Pt 2 Frequently Asked Questions About Bankruptcy

Get the answers you need to make an educated financial decision!
Get the answers you need to make an educated financial decision!

Click here to listen now!

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

Topics and types of FAQ covered in this 30 minute show:

  • Identifying the signs that you are a good candidate for bankruptcy;

  • Keeping your vehicle owned outright or when you are paying on a car loan;

  • How much time may be required between Chapter 7 and 13 bankruptcy filings;

  • Debts on their way to collections or money judgments and when to file or wait.

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973 he earned a JD from DePaul University Law School.

To learn more or, contact an attorney at Joseph Wrobel, Ltd. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

Seven things to think about when starting a side business

The SBA helps Americans start, build and grow businesses.
The SBA helps Americans start, build and grow businesses.

Fixed wage and salary employees can control how much they spend and save. What they cannot control is their take home pay. Instead of finding new ways to stretch dollars, try new ways to make additional income. What do you have to lose? Consider whether you signed any agreements with your employer regarding doing work or conducting business outside the scope of your primary employment. If there is nothing holding you back and you have what you think is enough time to devote to secondary income, get a pen and paper or your text to speech tablet and take notes while considering a few questions a budding entrepreneur should ask when considering small business start ups.

  1. What do you love to do, so that when doing it you wouldn’t feel like you’re working? Why not make money doing something you enjoy? Think about all the things you like doing and let your imagination run. There must be someone, somewhere, who will pay for what you want to make or do.

  2. Is there something in demand that you know how to do/make that others don’t? Think of a prevalent industry where you live or work. Say you live in a college town and the delivery of food and services to students without vehicles is a big business. How can your skills and abilities improve the way people deliver, what they deliver or how students can find out about it? It may take some time for the right idea which may come to you in a dream or “Eureka!” moment.

  3. Do you have space and transportation available to manage inventory? Consider the existing resources to which you have access. Do you live on a large enough property you could raise chickens? Have you considered renting additional space to people looking for a space to park their boat? Aside from land, you might have a truck that can help local people move or pick up and deliver their furniture donations. Maybe you pick up and inventory of items on which you got a great (maybe free) deal. If you have room to store the items you can take your time selling it for income.

  4. Are your skills and abilities particularly in demand in performing a certain service? How many degreed professionals who cannot find jobs learned how to play an instrument? Could they teach other people how to play that instrument on the side? Start a social media page to sell guitar lessons and start telling your neighbors. Before long you may be the muse behind a new local garage band that could become the next big thing.

  5. How much liability are you willing to assume and what assets do you have to protect? There are several options for small business formations. If you have assets you want to protect, a corporation setup can shield you from personal liability for the business. On the other hand, if you are less concerned about asset protection in lawsuits and more concerned with saving money, you can operate a business as a sole proprietor and simply file the correct income schedule form when doing your taxes.

  6. Do you have management and human resource skills needed if you have employees? Sudden and swift business growth can create headaches for small business owners. If you cannot provide enough goods and services as requested by customers, they will go spend their money somewhere else. This might require hiring and managing employees, which includes its own challenges.

  7. How much of your work can you comfortably outsource where practical? Employee labor and liability concerns cause many small business operators to consider outsource solutions for some of the work duties. Consider a tree trimming business that can be very busy in the spring. Many small business owner operators hire contractors to manage the marketing and accounting to free up more time for serving tree trimming clients.

Even if you never start your own small business, considering responses to these survey questions puts you in a class of “thought about it” people, which is a step closer to having more money and being self sufficient. There are so many options available to people who want to earn more money as well as manage, organize and eliminate debt.

The U.S. Small Business Association also offers resources on their website. “The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.”

To learn more or, contact an attorney at Joseph Wrobel, Ltd. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney.

Chicago Bankruptcy Update: New Frequently Asked Question Podcast Series

Get the answers you need to make an educated financial decision!
Get the answers you need to make an educated financial decision!

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

The Chicago Bankruptcy Update is a monthly podcast featuring compelling information and stories about bankruptcy and how people get a fresh start after Chapter 7 and 13 cases.

Click to listen to our latest episode: Frequently Asked Questions in Bankruptcy – Part 1

Topics and types of questions we ask and answer in our FAQ series:

  • When you may file for bankruptcy protection and what kind of relief is available;
  • Reopening a bankruptcy when you need to add a creditor or make a correction;
  • Marriage, the birth of a child and life events as they can be affected by bankruptcy;
  • What happens to your debts when you die and how your children may be affected.

There are many people who still think that filing for bankruptcy means giving up and throwing in the towel – hardly! Just like big companies that take advantage of bankruptcy to restructure their debts and assets to increase profits, individual consumers can use the law to their financial advantage. You, me, them, everybody can discharge debt and reorganize the repayment of other debts.

Listen to our monthly podcasts on the Chicago Bankruptcy Update and learn answers to many of the questions people ask. The FAQ series, in several parts, periodically addresses real questions asked by potential bankruptcy clients. As Nick asks Joe to answer the individual inquiries it becomes quickly apparent how many different complex financial situations can arise.

If you listen to our shows and decide you want to ask us more about bankruptcy, great! If you decide you would rather re-adjust your spending habits, that is also great! If neither option applies to you, “Share” our entertaining educational bankruptcy podcasts with others. You just never know who is looking for answers to the questions we ask on the Chicago Bankruptcy Update, and sharing is great!

To learn more or, contact an attorney at Joseph Wrobel, Ltd. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.