Category Archives: Consumer Finance

Planning a bankruptcy in 2015? Time to get things in order.

Many people who make the decision to file a petition for bankruptcy have been thinking about it for a while. In most households, a series of life and financial events usually cause an inability to keep up with the payments on houses, cars, credit cards and so on. There are a few “last straws” that prompt people to file for bankruptcy. Wage garnishments and home foreclosures are common events that cause an individual person or married couple to declare bankruptcy in either a Chapter 7 discharge or a Chapter 13 reorganization bankruptcy.

  1. Measuring the credibility of collector threats;

Debt collectors have very convincing threats they can use to coerce you into making a payment on a debt you owe them, regardless whether you can afford to pay them. If paying a credit card, for example, means you will be without food or power, you might not be able to afford to pay them. If the amount you owe is not significant a collector might simply call you forever. They might also sue you. Remember that large credit card companies have collectors with attorneys on file it may cost them very little to get a money judgment against you. If there is a judgment against you, the creditor may get the court to seize cash in your bank account or force the sale of assets to pay the debt. A bankruptcy could stop that creditor in their tracks.

  1. Keep your cash account balances low if you are concerned with account seizures;

If you have money sitting in your checking account to pay large bills such as rent and mortgage payments, consider converting cash into money orders or otherwise safeguard it somewhere else than cash checking accounts. If your account is seized by the court in collection of a money judgment, you may have a very difficult time persuading your creditor or court to return your cash because you had it budgeted for car or housing payments.

  1. Negotiating payment plans to avoid bank account seizures;

Even though a creditor might obtain a money judgment against you for the full amount they are seeking, they might also accept monthly payments, and so long as they receive monthly payments they might refrain from seizing your cash accounts and assets.

  1. Creating all your list of debts and collectors;

Order a copy of your credit report using a website such as Credit Karma (they advertise no fee access to credit scores and reports) and compile a master list of everyone to whom you owe money. By reviewing all three credit reports (Equifax, Trans Union and Experian) you can make sure nothing slips between the cracks. A bankruptcy petition requires a complete listing of all creditors. It is a good idea to become familiar with how credit is reported so you can later watch over it and make sure there are no inaccuracies. Many people have some sort of incorrect information listed on their credit report(s).

  1. Meet with a bankruptcy attorney who can advise you about next steps;

In order to qualify for Chapter 7 or Chapter 13 bankruptcy it is recommended you work with a licensed bankruptcy attorney who understands how to navigate the complex system of bankruptcy qualifications such as the means test for Chapter 7. Your bankruptcy attorney can also tell you everything you need to do to prepare for your bankruptcy case. When you are looking for a bankruptcy attorney, look for an attorney or law firm primarily focused in bankruptcy law because that experience is helpful to making sure you get a fresh financial start with the best outcome from the bankruptcy case.

  1. Create a working budget during bankruptcy and stick to it after;

Many people say that the most important credit factor about bankruptcy is what you do to protect your credit after a bankruptcy. Since the automatic stay provision of your bankruptcy stops creditors from collecting from you during the case, you will be able to apportion monthly income to keep up with important payments and start saving money for the future. Setting and sticking to a strict budget will help in building discipline and living within your means so you can avoid financial problems in the future. Just as easily, as people fall into the habit of overspending, they can learn the habit of budgeted spending.

  1. Research how to challenge negative marks on credit reports.

A bankruptcy discharge may eliminate your duty to pay certain debts, but that does not automatically wipe those debts from your credit rating. Your credit score might still be low after your bankruptcy case, and it will be necessary to let the credit reporting agencies know that a debt is no longer owed and should be eliminated from the credit report. There are agencies who work with clients, for a reasonable fee, and help update the credit agencies to reflect the results of a bankruptcy discharge order.

Most of a bankruptcy client’s anxiety can occur in the time before a bankruptcy filing. Once the information is collected and the process is underway, the client can relax and prepare for financial success with a fresh start.

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. onTwitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

Khan Academy: Can it help you make more money?

Bank of America TV ads draw attention to their partnership with the Khan Academy, the non-profit educational organization on a mission to provide “a free, world-class education for anyone, anywhere.[i]” The Khan Academy was founded by former hedge fund analyst, Sal Khan, born and raised in Louisiana and with an impressive resume and educational background. Khan, with funding from the Bill & Melinda Gates Foundation and Google, is now being recognized as a household name since so many large companies are getting involved to fund this non-profit website offering education to anyone, anywhere, at no charge.

Khan Academy is a different kind of education website and as more people learn about it, they are sharing why they spend time on the site.

Critics of online education frequently suggest there is no substitute for traditional classroom settings with interactions among students and teachers. This site is not part of that grudge match, because Khan Academy does not pitch itself as a substitute for degreed education programs and universities, rather it is a free resource for people who want to learn specific information on their own time and pace and from wherever they access Khan Academy, such as from any computer or mobile device.

What you can learn on Khan Academy is seemingly unlimited. Right now, the site offers education resources in the form of video tutorials, lectures, problem solving exercises, social comment, and interaction chats where you can ask any question and others may offer their input. The subjects available to Khan Academy students include just about everything taught in traditional pre-college level education and beyond.

You can use some of the lessons in Khan Academy improve at work, study for a promotion or start your own business on the side.

Being well into a career does not mean there is no need to continue pursuing education. In fact, the most successful careers involve frequent continuing education in specific areas. Not having gone to college should and not having time do enroll in night school should not be a deterrent to people who want to learn more and get ahead at work or get a better job.

The entrepreneurship focus on the Khan Academy website is significant. Many well-known CEOs are contributors to the library of lessons and content available free on Khan Academy. See Interviews with entrepreneurs for personal lessons.

Community questions offer a forum, we hope everyone takes seriously, to ask and get answers.

A recent question posted on the Community Questions page for entrepreneurs reads, “At what point in the business is it big enough to get a professional accounting service.” One response to the question suggested the person consider setting up an internal accounting department. The first person might next do some research about hiring a part-time employee with accounting experience. If that part-time employee only works a few hours a week it could be more affordable than outsourcing those tasks.

Remember, knowledge is power. The more you know, the more you can see new options to make more money and get a better job and career. Sometimes people need to change gears in life and pursue a career in a new direction. Sites like the Khan Academy can be useful springboards to new opportunities.

Joseph Wrobel and the attorneys and staff at Joseph Wrobel, Ltd., work hard to help people turn their lives in the right financial direction, writing and sharing content that helps clients learn, grow and prosper.

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 today.

[i] Khan Academy website, about page.

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.

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.

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.

Credit Unions: Offering members opportunities to easily and affordably earn positive credit scores

Many are turning to credit unions to take advantage of their credit rebuilding programs and features. Americans are working hard to rebuild their credit scores after enduring financial challenges like the great recession. Many are turning to credit unions to take advantage of their credit rebuilding programs and features. Credit unions are different from banks in several ways. While banks are largely publically owned and designed to generate profit for owners and shareholders, credit unions are not-for-profit and their purpose is to serve their member-owners, as opposed to maximizing profits. Members of credit unions all have a vote in how the credit union will operate to best serve its member’s needs. A currently compelling need is the ability to rebuild credit.

A recent Fox Business article highlights four ways credit unions help raise credit scores[i].

1.  Credit Builder Loans. Members who want to rebuild their credit over time with little cash outlay can take advantage of credit builder loans. These loan amounts can range from a few hundred to a few thousand dollars. When a credit union member applies for a credit builder loan, they agree to make payments on the loan against the full loan amount that is held by the credit union in a secured savings account the member cannot touch. As the member makes monthly loan payments, which are reported to the credit bureaus, the member’s credit score can improve.  Once the loan payments are all made on time and in full,[ii] the loan amount is transferred to the member. Credit builder loans are new types of credit repair options and are growing in popularity as more credit unions adopt the model.

2.  Free Credit Counseling. Unlike most banks, credit unions make credit counseling services available to their members without additional charge. The better educated credit union member should be able to borrow and repay more small loans to increase their credit score and purchasing power. The more successful loans the credit union has, the more it can lend to members who need new homes, vehicles and cash to cover out of budget expenses or investments. Managing member finances may not be widely advertised so it is smart to ask your local credit union relationship manager about their counseling services to help manage cash flow, pay debts and build savings.

3.  Online Tools. Enhancing credit counseling, the credit building tools and features of a credit union’s website can assist a member who doesn’t have time to visit the credit union in person, or who wants to crunch numbers at home. Online financial management and educational programs help members increase their financial health with the education and strategy tools it takes to create and work at the right financial plan that produces the best results. As members benefit from these tools, they can often see their finances improving and are encouraged to maintain better money management habits.

4.  Secured Credit Cards. When credit union members deposit a few hundred dollars into a secured savings account they cannot access, they can get a real credit card, guaranteed by the amount on deposit. If a member’s secured deposit is $300, that will be the credit limit on the card. As the bills come due and are paid, the reporting bureaus are notified and credit scores can be improved. Since there is no real risk of loss, credit unions can more liberally issue secured credit cards, despite a member’s challenged credit history.

To join a credit union, an interested customer must become a member. Unlike many other groups, credit unions allow new members to join at nominal rates. It is relatively inexpensive to become a credit union member. Some people keep their main account at a traditional bank with whom they have a relationship but also hold member accounts at the local credit union to take advantage of member benefits and opportunities to keep building credit and buying power.

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 dialing (312) 781-0996 to talk to an attorney.


[i] Fox Business: 4 Ways Credit Unions Help Raise Credit Scores. By Constance Gustke, Mar. 4, 2014.

[ii] Terms of credit union loans vary by institution and are determined by individual credit union policies.

How do I know if I am a good candidate for bankruptcy protection?

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.

Many people attach value judgments to bankruptcy. Meanwhile, others understand that Chapter 7 and 13 bankruptcy protections are financial planning tools when things do not go as planned. Starting a small business is risky. Working as an employee at will is risky. Life is risky. Because there are no guarantees, our federal laws allow us to discharge debts we will never be able to pay. At some point, people who are under extreme financial pressure decide that enough is enough. When they start talking to others who have taken advantage of bankruptcy laws, they learn that the process is not as scary and dire as some would suggest.

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.

1. I do not have enough savings to make it through a financial emergency. At some point people stopped saving while they increased spending and opening up new lines of credit. When the Joneses lost their million-dollar home in foreclosure after corporate downsizing, we all hit the brakes! Knowing the bottom can fall out and accepting reality means that more people are trying to put money away in savings. We all know that the stock market is not a sure bet, but for many people, the crash came without enough time to prepare. Once your burden is lessened you may be able to save again, knowing it is the better way to get ahead.

2. I am living on credit cards because the costs of daily life exceed monthly income. It is easy to run into unexpected car repairs and buy the plane tickets to Cousin Jill’s wedding in Florida in early March. The minimum payments tend to increase and most people keep up with the minimums. What happens is the fees and charges keep building and eventually the cards are maxed out and the minimums are still due. Have you done the math to figure out you will be long gone before you can ever pay off these credit cards? Many people who get a fresh start will also get new credit cards after a bankruptcy.

3. Bill collectors call me more frequently than do my friends and family. The creditors seem to know when you come home from work, when you sit down for dinner with the family, and when you have something good to say, only to be knocked down a peg by the late payment calls. Have you had the call from the nasally sounding collector, “Sir, can I ask you why the payment was late?” The harassment is more than most people can take with a grain of salt. Some of the creditors get nasty and threatening too. The automatic stay provision in bankruptcy makes them stop – as a matter of federal law.

4. My income is fixed or was recently terminated or reduced. Self-employed people can lose clients. Employed professionals can also find themselves out of a job or working less hours or with reduced pay. Are you going to turn down reduced pay/hours if job loss is the alternative? People with fixed incomes know quite well how to divide and pay bills. When that fixed income is reduced and the debts are still there a tough decision must be made. While some people are lucky enough to borrow from rich Aunt Edna, others have less choices. A fresh start in Chapter 7 or 13 can help cash-strapped families with temporary and longer term income issues.

5. A serious accident threatens my ability to keep up with the bills. What happens if the driver without insurance injures you in an accident and your own policy payouts are limited? Incidents of financial emergency are not always fault based. The mortgage and rent are still due, even when we cannot work on a temporary basis. If a lawsuit is involved there are pre-settlement funding companies who advance money on “sure bet” settlements but the interest rates are often sky high and not worth the initial price of admission.

If you want the collectors to stop calling and want to eliminate debts and fees you cannot afford to pay, and if you want to keep your house and car and some property, we can help you with the right Chapter 7 or 13 bankruptcy option.

To learn more or to move forward, 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.

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.