Tag Archives: Chicago bankruptcy lawyer

Credit counseling: Required before bankruptcy

The bankruptcy laws and courts give bankruptcy petitioners a fresh start, with a partial or full discharge of certain debts and financial obligations. They also require individuals filing for bankruptcy to attend a credit-counseling course and obtain a certificate of acknowledgement to file with the court before it accepts a petition for Chapter 7 or Chapter 13 bankruptcy. There are many reasons individuals file for bankruptcy protection. The automatic stay provision of the bankruptcy court stops all creditor collection activity, including wage garnishments, when an individual files a bankruptcy petition. In some cases, waivers are available under certain circumstances.

What’s the purpose and what should I expect?

The purpose of the credit-counseling requirement is to educate individuals about their options, and help them consider whether they need to file for bankruptcy or could solve their financial problems with a debt repayment plan or other means. Many credit-counseling agencies help you prepare a budget for your income and expenses, and if it is clear that you lack the income to pay the debts, the agency will confirm you as qualified for bankruptcy. Despite the credit-counseling agency offering you a repayment plan option, you are not obligated to accept anything but will be required file the proposed plan with the bankruptcy court.

Selecting a qualified credit counseling agency

Qualified nonprofit credit counseling agencies are approved by the U.S. Trustee’s office. The credit counseling must take place within 180 days of the filing of the petition for bankruptcy. Once you select a qualified credit-counseling agency and complete the program, you will receive and need to file with the bankruptcy court, a certificate of completion of your credit-counseling course.

Many of the credit-counseling providers offer online courses, some for $25, and they are available in both English and Spanish. The U.S. Department of Justice publishes a list of Illinois Approved Credit Counseling Agencies. It is important to make sure the credit counseling agency you select is approved by the Trustee’s office to ensure the court will accept their certificate of completion.

Do I qualify for an exception to the credit-counseling requirement?

There are a few exceptions to the requirement to attend credit counseling before filing for bankruptcy. Where an individual needs to file for bankruptcy to stop a wage garnishment, the court may accept a certified application to waive the requirement. If you have a mental or physical incapacity, or are in active military duty, you may be able to obtain a waiver of the credit-counseling requirement before filing bankruptcy.

Joseph Wrobel, Ltd., works with clients on consumer issues including bankruptcy and they can offer additional information about credit counseling courses.

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.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

 

Beware of credit repair scams

Credit repair scams are unfortunately common and it is important to do your homework and research a company who makes claims they can repair and rebuild your credit score and reputation. Many people worry that filing for bankruptcy and taking advantage of the laws to help get a fresh financial start will cripple their credit forever. In many cases, bankruptcy filers are pleasantly surprised how easy it is to get a loan for a home or car, or get a new credit card within a number of months after a bankruptcy. When you have fewer active debt and collection liabilities, you are likely better able to pay your bills and be approved for credit. You might pay a higher interest rate on a loan, but the amount of debt discharged in a Chapter 7 or 13 bankruptcy makes the trade off worthwhile.

The Federal Trade Commission offers free information to help consumers spot and report credit repair scams. You’ll know you’re encountering credit repair fraud if a company:

  • insists you pay them before they do any work on your behalf
  • tells you not to contact the credit reporting companies directly
  • tells you to dispute information in your credit report — even if you know it’s accurate
  • tells you to give false information on your applications for credit or a loan
  • doesn’t explain your legal rights when they tell you what they can do for you

Examples of recent credit scams and alerts to consumers to beware:

A court responded to the Federal Trade Commission request to stop the operations of First Time Credit Solutions, a credit repair company allegedly posing as an affiliate of the FTC when marketing to Spanish-speaking consumers. The complaint alleges marketing as “FTC Credit Solutions” and used a false affiliation with the federal agency to sell fraudulent credit repair services. The company guaranteed a 700 or higher credit score to its customers within six months or less.[i]

In another credit repair scam, a Florida company was fined $7.4 million by the FTC and ignored court orders to cease and desist from selling their illegal credit repair system. The owners of the company operated under several names: BFS Empowerment Financial Services, Inc., Help My Credit Now Credit Services, Inc., and Kevtrese Enterprises, Inc. These companies claimed they could permanently remove negative information on credit reports, even when the negative information was actually true and correct.

Joseph Wrobel, Ltd., can refer clients to reputable credit repair companies that do not make outrageous claims and make false or illegal promises.

A general rule applies to credit repair as it does in any business, if it seems too good to be true, it probably is. We have relationships with reputable credit repair companies who are especially helpful when you may have lingering negative information on your credit report about debts that were discharged in bankruptcy.

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.

Don’t forget to keep up with us on FacebookTwitterLinkedIn and Avvo, where you can read client and peer reviews!

 

[i] New America Media, Court Shuts Down Credit Repair “Scam” that Targeted Latinos, by George White, Apr. 114,2015.

Pitfalls of social media in bankruptcy: What you post can be used against you

What you say on social media can and will be used against you in a bankruptcy court. The majority of people nowadays have some type of social media account; whether it is Facebook, LinkedIn or Twitter, most of us try to look good and successful. Looking too good can be a problem when you are in bankruptcy court and looking good could trigger suspicions of fraud. Typical frauds against a bankruptcy court including hiding assets and knowingly making purchases and entering into contracts shortly before filing for bankruptcy protection. Bankruptcy filers found guilty for fraud upon the bankruptcy court face harsh penalties including fines, disallowance of bankruptcy relief and imprisonment.

The FBI routinely investigates suspicions of bankruptcy fraud, and they look at social media accounts.

The FBI actively investigates white-collar crimes such as bankruptcy fraud and publishes information further explaining the focus on bankruptcy filers who lie to the court, provide false financial records and run up credit cards with no intention of paying them off (“credit card bust-outs”). See this Bankruptcy Fraud information published by the FBI for more information.

In most cases, the bankruptcy trustee and the judge accept the information contained in the bankruptcy petition as true, unless there is a good reason to look beyond the documents and information presented to the court. Nevertheless, there are some bankruptcy trustees and creditors who make it a matter of policy to search for and review social media accounts to look for indications that something does not match up and there may be a reason to dig deeper.

What stories do your social media sites tell about you if a bankruptcy trustee or judge is presented with snapshots of your posts? 

When you file a petition for bankruptcy protection, you must truthfully list all your income, assets and debts. If the information you provide is not true and correct, your bankruptcy case could be dismissed and the bankruptcy court could find you committed fraud, which can lead to serious consequences. If creditor or the trustee searches your social media history and finds information that is different from what you presented to the court, the outcome can be bad.

Recent posts and pictures with cars, boats and assets not listed in your bankruptcy petition could be a red flag. Expensive dinners and vacations could also lead an investigator to dig further into your reported income and assets. Any large purposes within three months prior to a bankruptcy filing can be brought to the bankruptcy court with a request for a dismissal of your case. There might be a suspicion that you have cash income from a job not included on in your bankruptcy petition. Anything that could be misconstrued can damage your credibility.

An experienced bankruptcy attorney can help you understand how social media posts can affect your bankruptcy case.

Being open and honest with your bankruptcy attorney is important to their ability to prepare a proper bankruptcy petition. If you have large purchases too close to the filing date, you might be encouraged to wait another month before filing. In any case, knowing how social media can affect you is important.

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. Don’t forget to keep up with Joseph Wrobel, Ltd. on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

 

The Wrobel Q&A: A mixture of real bankruptcy questions and answers

The bankruptcy laws have changed over recent years. Notably, the 2005 amendments to the bankruptcy code made it significantly more complicated for people interested in filing bankruptcy. Where it used to be easier to qualify for a Chapter 7 (discharge) bankruptcy, the means testing required under the changes to the bankruptcy code now limit some people to Chapter 13 (reorganization) if they do not meet the new requirements for the traditional Chapter 7 bankruptcy case. Since the laws have changed, people we know who had a bankruptcy more than 10 years ago likely had a different experience than people today. Additionally, since there is a variety of legal and financial details in most of our lives, the answers to many bankruptcy questions are complex and those answers depend on how an individual’s situation lines up with the complex system of laws known as the Bankruptcy Code.

Attorney Joseph Wrobel answers real peoples’ anonymous questions about bankruptcy.

Because the Bankruptcy Code is complex and every individual and family may have a complex amount of legal and financial questions, Attorney Joseph Wrobel spends some of his time answering real questions and giving real answers, to the best of his ability. His response often suggests there are more questions he would first need to ask a potential client to give them fair and honest answers to their questions. Even though the details in these questions and answers might be different from your potential questions, there may be some recurring types of questions and answers that can help you or a friend understand some of the basics about how Chapter 7, Chapter 13 and the automatic stay provisions of bankruptcy work to help people keep their car, home and get a fresh financial start.

It is important to note that these questions and answers are anonymous and we never know the identity of the person who submits these bankruptcy questions that come from a variety of sources. Attorney Wrobel answers the frequently asked bankruptcy questions in a few formats including the Wrobel Q&A on the ChicagoBankrtupcy.com website. On the Wrobel Q&A page the real questions are printed along with the best “lawyer answers” Attorney Wrobel can offer, given the information provided.

The Internet radio podcast show about bankruptcy and FAQs is never dull.

Another online tool Attorney Wrobel uses to respond to real bankruptcy questions is the Internet podcast channel, also hosted on the Joseph Wrobel, Ltd. website on the page titled, Joseph Wrobel on Blog Talk Radio. Here at the firm we sometimes say, “Listen to the FAQ podcast while you clean your desk at work or at home preparing dinner or folding laundry.” The situations that come up in the questions and the longer explanations on our monthly podcast program are very interesting. We are never surprised by some of the complex situations some folks have. There are always going to be others who have it better and worse of compared to our own financial or legal situations.

If you have an anonymous question to ask about bankruptcy laws and how they can help you stop some annoying creditors and get your finances back on track, you have a few options:

(1) You could always do nothing and hope you win the lottery, and for that we wish you luck;

(2) Go ahead and submit your anonymous question for Attorney Wrobel to answer on an upcoming Internet radio podcast or on the Wrobel Q&A page by using the Locations & Contact page on the website; or

(3) Call Joseph Wrobel, Ltd., directly at 312-962-4941 and ask to speak to an attorney, or send your question in an email to j.wrobel.ltd@chicagobankruptcy.com and we will respond quickly to help you out.

Bankruptcy consultations are free of charge and if we can help you at Joseph Wrobel, Ltd., we will let you know how and what you can expect if you decide to take advantage of the bankruptcy laws to stop the creditors and get back on track to financial success.  

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 today.

 

 

 

Homeowners keep their home using Chapter 7 or Chapter 13 bankruptcy laws

Falling behind on mortgage payments can lead to foreclosure. When a homeowner is unable to delay the foreclosure through attempts at refinancing or otherwise negotiating additional time to get caught up, such as a forbearance, short sale, or deed in lieu of foreclosure, the mortgage lender will likely begin the legal process to foreclose and sell the home at auction to receive payment towards the loan. If a foreclosed home sells at auction for less than the amount owed, the lender will likely obtain a deficiency judgment and attempt to collect amount from the homeowner as well. Homeowners fall behind on mortgage payments for many reasons, and the bankruptcy laws help the homeowner save their home from foreclosure sale.

Filing a bankruptcy triggers the automatic stay provision, stopping a foreclosure and sale of the home.

Depending on the homeowner’s income and complete financial situation, they may qualify for a Chapter 7 bankruptcy, a full discharge, or a Chapter 13 bankruptcy, to reorganize and catch up on payments, sometimes a partial amount of the debt amount. When the homeowner files a petition for bankruptcy, the “automatic stay” provision of the bankruptcy code stops the foreclosure proceedings. The court automatically issues an order for relief including the automatic stay. If there is a scheduled foreclosure sale, the bankruptcy postpones the date of sale during the bankruptcy.

Chapter 7 and Chapter 13 bankruptcy both offer options for homeowners who want to keep their home.

If homeowners qualify for a Chapter 7 bankruptcy, based on their income and financial status, the bankruptcy and automatic stay will stop the collection of other debt collectors, which can free up more money to catch up on bankruptcy payments. The state exemptions for equity in the home may allow a homeowner to keep the home and the mortgage if there is not too much equity in the home and the payments are brought current. If however, the payments are not brought current, as soon as the bankruptcy terminates, so does the automatic stay, and a lender may proceed with foreclosure on a delinquent mortgage. If however, either the homeowner does not qualify for Chapter 7 or they need more time to catch up on mortgage payments, a Chapter 13 bankruptcy can be a better choice.

A Chapter 13 notice also stops a foreclosure sale and the lender’s collection actions. Chapter 13 allows a homeowner to “cure” a mortgage default by making up the past due payments, spread over several months of the Chapter 13 repayment plan. Many bankruptcy payment plans last between three and up to five years, which allows the homeowner a long period to cure the mortgage default and catch up on the late payments. It is assumed that the homeowner is making the regular monthly mortgage payment during the repayment plan. When other debt collection is stopped by the automatic stay, the homeowner should have more money available to pay the current mortgage and a portion of the past due amount over the period of the repayment plan.

Bankruptcy can eliminate a homeowner’s liability to pay mortgage deficiencies.

If the lender forecloses on a home when the mortgage is default, the court can order the sale of the home. If the homeowner owes more than the proceeds of the sale of the home at auction, the homeowner is responsible for paying the shortfall; however, the bankruptcy laws allow homeowners to eliminate the mortgage deficiency. Both Chapter 7 and Chapter 13 bankruptcies can eliminate liability for a deficiency judgment. The bankruptcy laws are certainly beneficial to homeowners who fall behind on their mortgage and depending on the individual homeowner’s financial situation, a home can be saved. The attorneys at Joseph Wrobel, Ltd. are experienced in all the complex provisions of the bankruptcy code and they can help homeowners get a fresh start, in their home, and with more money to keep current with monthly bills.

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 today.

 

 

When it comes to bankruptcy, we might all take some advice from Donald Trump

Donald Trump and bankruptcy are popular topics that seem to run together lately. Trump has never filed for personal bankruptcy protection but four of his business enterprises have been in bankruptcy, and the news certainly covered it. In a recent editorial article, a journalist stated that Donald Trump is right about bankruptcy, “Namely, he’s right about the attitude, morals and balance of sympathies we should bring to questions of debt and bankruptcy.[i]” Donald Trump is likely a greater success in business because he knows when to cut his losses. There’s no good way to grow when carrying old debt around. Business deals can go wrong and economic disasters happen that would make it impractical to pay off bad debt getting in the way of new income.

People who look down on others who take advantage of bankruptcy are probably jealous.

The people who work hard and earn and protect a perfect credit score are not inherently better people than others, they simply have good finances and no financial trauma. But with the blink of an eye all of that can change. Many dual income earning households would slowly grind to a financial hault if something happened to the earning capacity of one of the spouses in any of our given neighbors. Are they bad people if they have to file for bankruptcy? Should they be shunned for their misfortune?

In the recent GOP presidential debate, Chris Wallace criticized Donald Trump for the four of his businesses that were in bankruptcy, asking, “With that record, why should we trust you to run the nation’s business?[ii]” Trump responded that those were four out of hundreds of deals he has done.

There are similarities between Trump’s business bankruptcies and your option to reorganize your finances in a Chapter 13.

Business bankruptcy, Chapter 11, is different from personal bankruptcy. The goal in a Chapter 11 is to eliminate parts of the business that are no longer working or profitable, for the purpose of otherwise saving the business so it can operate and profit again. In personal bankruptcy, Chapter 13 has a similar feel to it, eliminating some of the bad debt and getting the consumer on a reasonable monthly payment plan, which eventually terminates and the individual moves forward to make money and keep up with their debts, assuming no intervening financial emergency takes place.

There’s no room for guilt and bad feelings in money and personal finances, it’s just business.

Taking the moral and value attitude judgment out of bankruptcy helps people see the laws for what they are, laws designed to bail people out of financial crisis so they can get a fresh start and get back on their feet again. The lenders who lose in bankruptcy expect, as part of their business plan that some borrowers will file for bankruptcy. That is why they charge interest to make income on borrowed money in the first place. Trust that most lenders are making enough money on their other accounts, that your bankruptcy will not shut them down anytime soon.

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 today.

[i] The Week, What Donald Trump gets right about bankruptcy, by Jeff Spross, Aug. 10, 2015.

[ii] See HN1 above.