Tag Archives: automatic stay

Everyone might want to know what most people experience when filing for bankruptcy protection

Filing bankruptcy will provide debt relief, eliminate bill problems and stop creditor harassment.
Filing bankruptcy will provide debt relief, eliminate bill problems and stop creditor harassment.

All clients at Joseph Wrobel, Ltd. will meet with an experienced bankruptcy attorney who will help them evaluate their entire current and near future financial picture to determine which chapter of bankruptcy protection (Chapter 7 or 13 most often) would help solve the client’s financial crisis. If it does not make sense to file a bankruptcy petition, clients will be offered other financial and credit repair options. Clients who are ready to proceed are given a list of instructions on what to do next so the attorneys can move forward with the bankruptcy with very little further action required of the client.

Everyone deserves a fresh start and most people who have already received a bankruptcy discharge would tell you the experience was more comfortable than expected.

Most people are not going to find out you filed for bankruptcy protection unless you tell them. While some local papers in smaller towns might print the names of local residents who have a bankruptcy filing, most of the clients in the Chicagoland area will proceed through bankruptcy without friends and neighbors knowing.

Most of your debts will be eliminated if you file a petition for a Chapter 7 discharge. Certain debts, as a Joseph Wrobel, Ltd., attorney will tell you, cannot be discharged. Examples of non-dischargeable debts include student loans, child support and maintenance.

Want to stop the annoying phone calls by credit card companies and bill collectors?

Most of the annoying collection phone calls will stop. While bankruptcy cannot eliminate all unwanted phone calls, the collection agencies who love calling during lunch and dinner will have to stop bothering you because of the “automatic stay” provision. While the bankruptcy case is active, there is a federal order of the bankruptcy court that “stays” (prohibits) collection activity including those annoying phone calls.

Most of your personal belongings, your car, 401(k) account, and the equity your home can still be yours after a bankruptcy discharge. If you live in the State of Illinois, there are homestead exemptions allowing you to keep equity in your home, a vehicle and other personal property up to a certain amounts. When you have certain assets worth more money than exemption limits, and when you have assets you consider irreplaceable, a Chapter 13 bankruptcy will give you options not included in the Chapter 7 full discharge most people think about when considering bankruptcy.

Anyone can make a full financial recovery from a bankruptcy in less time than many people think.

Most people can get credit cards (pre-paid credit and debit cards are easy to obtain) and buy homes and cars on credit within a few years of a bankruptcy discharge. Do not think that a bankruptcy means you are giving up and throwing in the towel. By eliminating debt you were never going to be able to pay, you get fresh start to rebuild your assets and credit rating, a fresh start.

The attorneys at Joseph Wrobel, Ltd. are available to talk to you and answer most of your questions over the phone and will treat everyone with the respect and dignity they deserve, despite their temporary financial circumstances. If you want to learn more about bankruptcy and credit management, 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 should we know about unsecured debt when considering bankruptcy?

Most unsecured debts are the common bills we all incur such as credit card debt, medical bills, student loans, utilities, unpaid rent and taxes.
Most unsecured debts are the common bills we all incur such as credit card debt, medical bills, student loans, utilities, unpaid rent and taxes.

Unsecured debts are the debt obligations we incur that are not secured by property like an automobile or home. Secured debts, on the other hand, are protected by the collateral connected to the loan. If you do not pay your car loan, the bank may obtain a court order to seize and repossess the car if you default. Likewise, with your home, unpaid mortgages can be collected by foreclosing on the home. With the unsecured debts, the unpaid creditor can send your file to collections or file a lawsuit to obtain a money judgment to enforce and collect the money owed. If the creditor enforces a judgment, they may attempt to seize money in your bank account or another asset. Filing a petition for bankruptcy protection under Chapter 7 or 13 can stop seizures and collections of money judgments for unsecured debts. See our blog article discussing the automatic stay provision of the bankruptcy code. The automatic stay prevents collectors from continuing any collection activity during a bankruptcy case.

What are the typical types of unsecured debts and how to banks and creditors collect them?

Most unsecured debts are the common bills we all incur such as credit card debt, medical bills, student loans, utilities, unpaid rent and taxes. If you do not pay the unsecured debts most creditors call you frequently to negotiate a payment or some sort of arrangement to bring the debt current. Some creditors will accept a lesser amount than what is due, but be careful because you may find that the forgiven amount ends up being taxable income to report to the IRS.

If you fail to respond or negotiate a fair deal with the creditor, they will most likely send their unpaid account to a collection agency. These phone calls will make most people’s hair stand on end. The collectors are often rude and will try to trick you into doing something foolish such as paying them from your 401(K) retirement funds – don’t do it! Qualified retirement accounts are safe and in most cases, creditors cannot seize and collect that money. The collectors will also likely tell you, if you suggest you are considering a bankruptcy, your financial life and future will come to an abrupt end – also not true! In fact, many people who do seek protection from the bankruptcy courts are able to borrow money, establish credit and finance cars and homes within a few years of a discharge.

In the event you and the collection companies cannot strike a deal, or you dispute the validity of the debt they are trying to collect, your creditor may file a lawsuit against you. A local county sheriff or special process server will likely stop by your home or place of employment to serve you with a summons to appear in court to answer the complaint they file with the court asking for a money judgment. At that point, you can appear in court, by yourself or with a lawyer, and try to settle the lawsuit. If you decide not to appear and do nothing, the court may continue your case one time or enter a default judgment against you. Eventually the creditor will obtain a money judgment and start enforcement.

How can bankruptcy laws protect you from unsecured creditors, collectors and court judgments?

Most unsecured debts can be completely eliminated or reduced in either a Chapter 7 or 13 bankruptcies. Again, as soon as a bankruptcy petition is filed, the creditors must stop almost all collection activity. To learn more the basics of bankruptcy you can listen to several 30-minute podcasts in which Joseph Wrobel explains a variety of bankruptcy subjects – click/tap here for the page on the firm’s website with links to the podcasts. Many people will tell you that the most important thing about a bankruptcy is what you do after a discharge, meaning keeping up with bills and not getting behind unmanageable debt anymore. After a bankruptcy, if you owe less money to creditors, you may look more creditworthy. Many people start re-establishing their credit buy easily obtaining a secured credit card to use for gas, grocery and basic daily living expenses.

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.

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.

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

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.