Examples of the automatic stay and how it operates in bankruptcy law

“Automatic stay” is protects you from creditors during bankruptcy. While a bankruptcy case is active, be that a Chapter 7 or 13, no creditors or collectors may contact or harass the individual or organization in bankruptcy. Specifically the definition of automatic stay on the U.S. Courts official website is, “An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.[i]” As soon as creditors receive the initial notice of the bankruptcy, they may not continue any collection activity during the bankruptcy case or they would violate the automatic stay, a federal offense.

Examples of protections from creditors during an automatic stay.

Many individuals and business owners seek the protection of bankruptcy laws and the automatic stay provision to prevent multiple wage garnishments, evictions and foreclosures. In addition, some people worry their utilities might be disconnected. The automatic stay applies to these scenarios in varying degrees. For example, if the electricity is about to be cut off it might make sense to prevent a disconnection for at least 20 days. Garnishments also hurt the ability to keep up with the bills. No more than 25% of an individual’s wages may be garnished directly, but when multiple creditors come calling with garnishments, the automatic stay may look really good to someone who really doesn’t want the human resources department at work getting involved in responding to multiple creditors.

Examples of automatic stay limitations and ways creditors and collectors try to get around the law.

When the tax man shows up at your door you cannot send him away with an automatic stay. In fact, the IRS may audit you, issue tax deficiency notices and otherwise use all the available tools at their disposal to proceed with taxing you. Notwithstanding, the IRS may not seize your income or property while you are in bankruptcy with an active and enforceable automatic stay. The automatic stay does not affect Child support and matters affecting the family. Likewise, a criminal court may proceed with matters involving the criminal component of certain actions involving debts and an order to pay a fine or comply with court orders may still be effective despite the automatic stay. Additionally, multiple bankruptcy filings and violations of bankruptcy court rules can affect the automatic stay.

Just as a petitioner, seeking the protection of the automatic stay wants to maximize their rights under the law, the creditor and collector on the other end may seek to circumvent the automatic stay and find a way to collect their debt and proceed under an exception to the law. An experienced bankruptcy attorney can help clients whose creditors ask the bankruptcy court to “lift” the automatic stay when they argue to the court that the automatic stay is not being used within the spirit of the law and legislative purpose the stay intends to satisfy.

Chicago attorney, Joseph Wrobel, has decades of experience working with complex bankruptcy issues including those touching on automatic stay issues and the legal challenges that can arise, including violations of automatic stay and federal bankruptcy laws. To learn more about bankruptcy and your options, 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 legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.


[i] U.S. Courts Website Glossary.

Bankruptcy Basics: What Happens at the Meeting with the Trustee?

MEDIA RELEASE

Bankruptcy Podcast Series

By Joseph Wrobel, Ltd.

On today’s program, we cover bankruptcy basics, focusing on what happens at the meeting with the trustee.
On today’s program, we cover bankruptcy basics, focusing on what happens at the meeting with the trustee.

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. On today’s program, we cover bankruptcy basics, focusing on what happens at the meeting with the trustee.

CLICK/TAP HERE TO LISTEN (Listen Live 12/20/2013 at Noon CST or Recorded Anytime Afterwards On Demand)

Bankruptcy issues covered on this show:

1) What is a meeting with the trustee meeting, also known as a 341 or creditors, meeting?

2) What are the specific purposes for trustee meetings in Chapter 7 and Chapter 13 cases?

3) How should I prepare for meeting with the trustee, who will be there and what will I be asked?

4) What happens after meeting with the trustee, and may you challenge a trustee in disagreement?

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.

Bankruptcy Basics: Why So Much Information?

Listen and learn valuable tips in getting your finances organized so you attorney can help you get ahead!
Listen and learn valuable tips in getting your finances organized so you attorney can help you get ahead!

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. On today’s program, we cover bankruptcy basics, focusing on disclosure of assets, income and expenses, debts and transfers so the attorney can provide the correct advice without full disclosure.

CLICK/TAP TO LISTEN

Bankruptcy issues covered on this show:

1)      Listing and disclosing proper assets to your attorney with supporting documentation.

2)      Identifying and listing in categories your individual and business income and expenses, if any.

3)      Reviewing and sharing evidence of past debts your attorney will include in the bankruptcy filings.

4)      Categorizing and reporting any transfers of assets by gift or sale so your attorney can address them.

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.

Produced by Nick Augustine PR

When can I file another bankruptcy petition?

So, should/would/could I file another petition even though I won’t be eligible for a discharge? Maybe.
So, should/would/could I file another petition even though I won’t be eligible for a discharge? Maybe.

“I know I want these calls to stop. I really need to get this done. Maybe I’ll put it off until I have more debt to get rid of.” Does this look like a conversation in your head? Many people think about bankruptcy as their “get out jail free” card and are waiting for the right time to use it. What they might not know is that protection under the bankruptcy laws may be available more often than they realize. When does a person’s financial situation become ripe for a bankruptcy petition? If they are about to lose their home, car or other valued items, it may be time to go see a bankruptcy lawyer.

If you think about it, the periodic opportunity to discharge debts you cannot pay can be a unique experience.

Decision makers in businesses who use bankruptcy laws as strategic financial planning guidelines are well aware that the status alone of having an active petition for bankruptcy on file can keep the wolves away from time to time. This doesn’t mean being a serial filer and petition withdrawer is the best plan, but knowing the laws are there when needed helps fiduciary decision makers.

Successive Chapter 7 and 13 cases may be filed but the time frames are different. In Chapter 7, the “full discharge,” you may receive a second discharge so long as it is not within eight years of the date the first case was filed. For Chapter 13, “reorganization,” you may receive a second discharge so long as it is not within two years of the date the first case was filed. Another interesting wrinkle folds into the timing plan and the Chapter under which you first sought protection controls the timing for subsequent filings. Therefore, if you first filed a Chapter 13, you could file a subsequent Chapter 7 within six years, and conversely, if you started with Chapter 7, four years need to pass before you can file the Chapter 13 petition. Of course, there are exceptions to general rules.

So, should/would/could I file another petition even though I won’t be eligible for a discharge? Maybe.

There are several circumstances in which it makes sense to file a Chapter 13 case, for example, right after receiving a Chapter 7 discharge, commonly known as a “Chapter 20.” An experienced bankruptcy attorney can best help determine if there is a reason and opportunity for a client to seek “20” protection.[i]You need the extra time but have too much debt. If you need the extra time to cure an arrearage on a mortgage or car loan but your overall debt exceeds the debt limits under Chapter 13, filing a Chapter 7 first might help. By filing the Chapter 7, you can reduce your overall debt. Then, with your debt load reduced, you may be able to qualify for Chapter 13. Although you won’t be able to get a second discharge in the Chapter 13, the second bankruptcy filing will give you extra time to cure the arrearage on your mortgage or car loan or to pay down debts that were not eligible for discharge under the Chapter 7, such as tax debt.”

For whatever need you may have, knowing a smart bankruptcy attorney who knows the interplay of the rules for timing of filings and discharge eligibility is a best bet. Joseph Wrobel has been practicing bankruptcy law long enough to teach histories of the law and can direct you to the best course of action in resolving complex financial issues and a fresh start for you or your business.

To learn more about bankruptcy and your options, 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 legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.


[i] NOLO website: What is Chapter 20 Bankruptcy?

Fraudulent mortgage documents: About MERS listed on your Deed of Trust.

"According to Foreclosure Nation, “MERS was used by the Wall Street Banks to avoid paying county recorder fees and real estate transfer tax fees."
"According to Foreclosure Nation, “MERS was used by the Wall Street Banks to avoid paying county recorder fees and real estate transfer tax fees."

Bank: We’re going to foreclose on your home for not making timely mortgage payments. Homeowner: I dispute your foreclosure proceedings. Court: Bank, can you establish this homeowner is in violation of the mortgage agreement? Bank: Well, of course. Homeowner: I say the mortgage you seek to enforce is fraudulent, see that MERS is listed on my Deed of Trust? The website, Foreclosure Nation, offers resources including a list of criteria you can use to spot fraudulent mortgage documents. According to Foreclosure Nation, “MERS was used by the Wall Street Banks to avoid paying county recorder fees and real estate transfer tax fees.[i]” The site lists 66 items to look at when looking for mortgage fraud, and item number 66 is a long list of names who are known “robo-signers.”

A popular publication, Washington’s Blog, offers several descriptions and quotes about MERS and how it worked as a cheat. “The Mortgage Electronic Registration Systems (“MERS “) is a shell company with no employees, owned by the giant banks.[ii]” MERS was advertised in 2007 as a tax and fee-avoiding opportunity in this brochure: “MINIMIZE RISK. SAVE MONEY. REDUCE PAPERWORK.” Inside the brochure there is also a claim that “clients save money because MERS “eliminates the need to record assignments in the name of the Trustee.”[iii]

MERS is a system owned and operated by MERSCORP Holdings, Inc.[iv], the parent company. The MERS website promotes it’s system as being a technology innovation helping customers reduce processing costs and increase efficient access to information for mortgages. This national database is free to the public who can use the system to access loan servicer information. The About Us page of the site states, “MERS and MERS®Residential were created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper.[v]

In defense of its MERS system and public image, the “In the News” page on the MERS website promotes various news articles praising MERS as well as examples of court decisions in favor of MERS[vi]. On the other side of the PR spin many “Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS…whose private mortgage registry has all but replaced the nation’s public land ownership records,” according to a 2011 New York Times article on point[vii]. While it is likely that investigations into MERS activity caused reform to the system, there are likely many undiscovered no document mortgages in circulation. The bundling and sale of mortgages and claims of title can make it very difficult to know who owes what to whom.

Bankruptcy attorneys often meet with new clients facing foreclosure and they want to know if their mortgages are valid and whether they were part of a fraudulent mortgage transfer. If the bank can’t prove they own the mortgage, what happens to the homeowner and the property? An advantage to filing for bankruptcy protection under Chapter 7 or 13 is the automatic stay provision to stop foreclosure proceedings while you and your attorney further investigate the history of debts and obligations.

Attorney Joseph Wrobel is a veteran bankruptcy attorney who has worked through many complex challenges facing clients trying to keep their home and recover from a disastrous life event such as being a victim of mortgage fraud.  To learn more about mortgage fraud, mortgages generally, and keeping your home, 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 legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.


[i] Foreclosure Nation: How To Spot Fraudulent Mortgage Documents. By Max Gardner.

[ii] Washington’s Blog: States Fight Back Against MERS Mortgage Fraud. By Washington’s Blog, Apr. 7, 2013.

[iii] See Washington’s Blog cited herein.

[iv] Website: MERSCORP Holdings, Inc.

[v] Website: MERS – About Us.

[vi] Website: MERS – In the News.

[vii] New York Times: MERS? It May Have Swallowed Your Loan. By Michael Powell and Gretchen Morgenson, Mar. 5, 2011

Traditional and Roth IRAs are still safe investment options despite reports of limits

Joe Wrobel says: "IRAs are still a safe option."
Joe Wrobel says: "IRAs are still a safe option."

When we consider options for investing some of our income for the future, many of us look to traditional and Roth IRAs. Both offer protection against creditors but there are limits, of course. If you are new to investing, a traditional IRA (Individual Retirement Account) is a tax-deductible investment providing tax-deferred savings. If for example, you earned $50,000 and you paid $2,000 into an IRA, you will only pay income tax on $48,000 of income. So long as you do not withdraw any of the IRA funds until you are 59 ½ years old, you will not pay any tax penalties for early withdrawal, and you will only pay income tax on the money at your then tax rate. A Roth IRA acts differently and your savings are tax-exempt, not deferred. Following the first example, despite your $2,000 contribution to the Roth IRA, will pay income tax on $50,000. However, when you are 59 ½ years old and your Roth IRA has been open for at least five taxable years, you can withdraw the money without being taxed at all.

The reason many people like using IRAs to save for the future is the “don’t touch it or you’ll regret it” factor. Of course, there are times people take loans against their IRA and that is certainly an option if the event arises. What many people don’t think about when they sign up for an IRA is that they are largely untouchable in bankruptcies and there is little a creditor can do to seize those funds.

The 2005 bankruptcy code overhaul added protections making IRAs safer and more creditor-proof. The limit of safe funds is $1,245,457[i]. In addition, self-employed IRAs and workplace 401(K) amounts rolled over into IRAs are not subject to the $1.2M limit to protect against creditors.

Chicago Bankruptcy Attorney Joseph Wrobel offers his comments on IRAs and bankruptcy:

“For almost every single consumer that files a bankruptcy, hard-earned money sitting in a retirement fund [401(k), pension plan, IRA, etc.] is exempt and will not be taken by a Chapter 7 Trustee, nor does not it need to be evaluated as an asset in a Chapter 13[ii].  The Federal Bankruptcy Code and the state statutes that provide for retirement money to be exempt set forth standards that the retirement fund must meet in order for the fund to qualify as exempt. However, it is a truly rare event for a prospective debtor to find him or herself in a situation where his or her retirement money is not exempt.” Attorney Joseph Wrobel.

Commenting on the Chicago Tribune article that notes exceptions to IRA safeguards, he further states, “As with all rules, there are exceptions and that is the gist of this article. One of the exceptions deals with the monetary limit for a Roth IRA. The likelihood that someone with such a large Roth IRA can even qualify for a Chapter 7 is quite small. Generally, with such a large IRA, that person will also have a large income and other assets that would prevent the filing of a Chapter 7.” Attorney Joseph Wrobel.

Are there other exceptions to the bulletproof IRA? Yes, and many are unusual.

The Chicago Tribune article also reported a Wisconsin case involving inheritance, which Attorney Joseph Wrobel points out, “The other exception being an inherited IRA, again, a quite unusual situation.” In Chicago, this past April, the 7th U.S. Circuit Court of Appeals, “essentially said an inherited IRA ceases to become retirement money when it passes to an heir, and the money is available to creditors[iii].

The value of working with a veteran bankruptcy attorney comes from the amount of experiences that attorney has endured and the strange fact patterns that could trigger a variety of events. If you are a consumer considering bankruptcy and you have cash or invested assets, in an IRA, for example, do not worry about losing it. But make certain you hire an experienced bankruptcy attorney.

If you want to learn more about bankruptcy proceedings, 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 legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.


[i] Chicago Tribune: Roth IRAs not always protected from creditors. By Janet Kidd Steward, Sept. 20, 2013

[ii] One of the factors that determine the amount of a Chapter 13 payment plan is the value of the Debtor’s assets.

[iii] See Chicago Tribune article cited above.

Ain’t No Reason To Reaffirm Your Mortgage, But There Certainly Is For Your Automobile

Let’s begin by defining reaffirmation:  A reaffirmation is an agreement made between a debtor and the creditor to re-pay a debt, whether it is the entire debt or part of the debt, that would be discharged in a Chapter 7 Bankruptcy.

Why would you agree to pay a creditor whose debt can be discharged? The answer requires understanding the difference between an unsecured and a secured debt.  An unsecured debt is simply a  promise to pay, whether orally or in writing. There is no collateral to secure the debt and the discharge that you receive when your Chapter 7 is completed, discharges the promise that you made to the creditor.

A secured debt has the same promise to repay as an unsecured debt but a secured debt also has collateral that secures the promise.  That collateral can be taken back by the creditor if you do not pay the debt. An example is a loan to finance the purchase of an automobile. The lender has a lien against the title to the vehicle. The lien rights allow the lender to repossess the vehicle if payment is not made.

What happens to a secured debt when you file a Chapter 7 Bankruptcy?  Let’s use that automobile loan as an example.  The completion of the Chapter 7 Bankruptcy discharges your personal obligation to pay on the promise, but the lien rights SURVIVE the bankruptcy. This means that you have to make a decision to either return your automobile or keep it and pay for it. If you return or surrender your vehicle, the Chapter 7 Bankruptcy discharge protects you from ever owing any money to the lender.

There are two ways to pay for your automobile. The first is to pay for it by redeeming the vehicle, making a one-time lump-sum payment equal to the value of the vehicle, which is a very uncommon situation. The second is to sign a reaffirmation agreement, agreeing to make the regular monthly payments until the vehicle is paid, after which you will receive the title. To keep your vehicle, even though you filed a bankruptcy, you will need to pay for it since the lien rights survive the bankruptcy.

What about your mortgage? Many clients ask me about reaffirming their mortgage. They think that it is required and is something that they should do. My response is that there is almost never a good enough reason to reaffirm a mortgage. Why? The mortgage lender will not foreclose as long as you make the mortgage payments. It may be a hassle to deal with the lender without the reaffirmation; your credit report may not reflect that you are making mortgage payments so that the payments do not help increase your credit score.; but the advantage of never having to worry about being personally responsible for the debt far outweighs any possible negatives. In our current times, when so many homeowners are “upside-down” on their home, and so many homeowners are considering whether it makes sense for them to keep their home ( Will there ever be equity in my house? How long will it take?), knowing that any time after your bankruptcy is completed you decide not to continue mortgage payments, clients have told me that it is a wonderful feeling knowing they never have to worry about “getting stuck” for the mortgage payments.

If you want to learn more about bankruptcy proceedings, 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 legal assistance please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.

What is a Bankruptcy Petition?

A petition is a formal application made to a court in writing that requests action on a certain matter. For bankruptcy purposes, a petition is the document that is filed with the Clerk of the Bankruptcy Court, seeking relief from your debts. The petition is the document that “gets it all started”. When your lawyer files your petition, the bankruptcy is now in effect, and you are now protected against harassment and collection activity from creditors by the “automatic stay”.

Petitions run at least 30 pages, sometimes they can be 50 pages long. There are many parts to the petition. The most important are: Voluntary Petition, Schedules, Statement of Financial Affairs, Median Income/Means Test, and if a Chapter 13, Chapter 13 plan.

Voluntary Petition It contains basic information: Name, address including county, social security number, individual or joint case, type of bankruptcy, and whether you have filed any previous cases in the last eight years.

Schedules The Schedules are labeled from A to J. A – Real estate owned. B  – Personal possessions: cash, bank accounts, furniture, vehicles, life insurance, etc., etc. C – Exemptions. D – Secured Creditors E- Priority Creditors F- Unsecured Creditors G – Leases H – Co-Debtors I – Income J- Expenses

Statement of Financial Affairs This is a series of questions that must be answered. There are 18 questions, 25 if a business is owned by the Debtor. Some of the questions: Income from all sources for the last two years plus the current year to date income; pending lawsuits; garnishments and repossession; fees paid to your attorney; transfers of any property.

Median Income/Means Test This is a very, very complicated form that many attorneys have trouble understanding. Essentially, it sets forth the income to the Debtor’s household for the six months before the month in which the bankruptcy was filed. If over the median, there is a second part of the form known as the Means Test. The Median Income/Means Test is a major factor to determine if a Debtor qualifies for a Chapter 7 or is a factor in determining the amount of a payment plan in a Chapter 13.

Chapter 13 Plan This sets forth the amount of the monthly payment that the Debtor will pay to the Trustee each month, the length of the plan, and the percentage paid to unsecured creditors.

Bankruptcy: Think of Chapter 7 and 13 as financial planning tools

Some people operate with a misconception that a bankruptcy filing means giving up, throwing in the towel and going to hide in a corner wearing a dunce hat. Wrong! As discussed during a recent radio Interview on the new Chicago Bankruptcy Update podcast, Chicago Bankruptcy Attorney, Joseph Wrobel, explains that many prominent individuals and businesses use the law and protections set forth in Chapters 7 and 13 to reorganize their debts and get finances and balance sheets in order. Click/tap here to listen to the inaugural episode, “Bankruptcy in Detroit: Any saving Motor City? In this program, Wrobel compares and contrasts what has been happening with the well-known Detroit bankruptcy case and how what has been in the news would apply to Main Street businesses and individuals.

If you're at a fork in the road, get some proper direction.
If you're at a fork in the road, get some proper direction.

In another recent publication, ChicagoNow’s Friends in Family Law, Wrobel was praised for his compassion and understanding that bankruptcy clients often feel like they have failed somehow and should hang their head in shame. What many people do not realize is that they can keep their home, car and items of personal and sentimental value. The article, “Bankruptcy is a financial planning tool: Chicago area families deserve a fresh start,” remarks that people even think about suicide when they feel there is no way out of debt and financial stress. Also noted, the act of filing a petition for bankruptcy relief helps protect the consumer against continued collection activity and phone calls.

If you find yourself behind the eight ball and feel like they’re is no relief in sight, take some advice: slow down, take a few deep breaths and imagine you had all the money you need to get by from day to day and save for tomorrow. After you calm down, make a list of financial obligations you can afford to pay and which ones seem impossible to handle. Now, what if you had a period of time where you could put those troublesome bills away and forget about them for a while. Would you be able to feel better and maybe take your family out for dinner for some laughter and to create some nice memories? Think of a bankruptcy filing as one of those drawers where you put those pesky debts. Chapter 13 is just a little closer to the front of the door and Chapter 7 is so far in the rear of the drawer you will never see those bills again!

Having respect for yourself and your family means facing your troubles head on and doing what’s right to take care of yourself and them. Don’t make your decisions based on what your friends say at work or what you hear second hand. When you make a private consultation with a bankruptcy attorney at Joseph Wrobel, Ltd., you will get the fair and honest truth. You might be surprised that bankruptcy relief is not as treacherous as you thought. You can call and make an appointment by dialing 312-781-0996. Before you call, if you’d like, watch the videos on the Joseph Wrobel, Ltd. website. The firm also has Facebook, Twitter and LinkedIn pages where you can find more information and interesting articles on a variety of consumer finance topics.

Bankruptcy Court: go ahead and make their day

The last thing you want to do when asking for bankruptcy protection is lie to the judge! A woman in upstate New York learned her lesson the hard way when a federal judge recently threw the book at her for failing to disclose that she could afford payments on her leased Mercedes. The 33 year-old was sentenced to two years of probation and 50 hours of community service. Luckily, for her, she pled guilty to defrauding the court, because had prosecutors needed to spend efforts further prosecuting the case she may have ended up behind bars.[i]

One of the comments to the article: “Simple mistake. I countless friends of mine have done the same thing.” Not Yet Hacked Bluesman (response to his comment: “Nice ‘friends’ you have!” seniorplus)

So, you think…”probation isn’t that big of a deal…I’ll risk fibbing…” Here are some of the results you might earn if you fail to list assets and the trustee and the court find out (as noted in a recent Nolo legal resource article[ii]).

  1. The court will disallow your discharge of debts. Do not pass go, do not collect $200 because you’re done and just wasted your time and money.
  2. Your bankruptcy case may still be active but you may not receive discharge protection but may have to sell or turn over assets while keeping debts.
  3. The trustee could revoke your discharge, and you will need to go back into repayment of your debts. This may happen at any time before or after your case is closed by the court.
  4. In subsequent bankruptcies you might not be able to discharge the debts involved during the bankruptcy proceedings in which you were not truthful.
  5. Criminal charges could be fined against you. As in the case of the “hidden Mercedes” payments, you could end up with a criminal conviction and sentencing. No fun.

If you want to learn more about bankruptcy proceedings, 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 legal assistance please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.


[i] Syracuse News: Woman sentenced for not revealing money for Mercedes to bankruptcy court

[ii] Hiding Assets in Bankruptcy: It’s never a good idea to hide assets in bankruptcy. Here’s wny.