Category Archives: Bankruptcy
What Happens When You File Chapter 13 Bankruptcy?
The short answer to this question is easy. When you file Chapter 13, or any other form of bankruptcy, you get a fresh start, as the Supreme Court confirmed once again in 2023. But the legal bankruptcy process goes far beyond filing paperwork. If the case isn’t filed properly, or is filed at the… Read More »
Can You File Bankruptcy on IRS and State Taxes?
Many Illini are behind on their taxes, mostly because the era of the pure 9-to-5 job is gone. In the United States alone, freelancers now earn more than $1.3 trillion per year. Since this income is uneven, it’s easy to fall behind on estimated tax and other such payments. Taxing authorities, especially in cash-strapped… Read More »
How Are Chapter 7 and 13 Bankruptcies Similar?
Overall purpose might be the biggest similarity between Chapter 7 and Chapter 13 bankruptcy. Both federal debt relief programs offer a fresh start to honest yet unfortunate debtors. Honest debtors have pure motives when they accurately complete and file all bankruptcy forms and other paperwork. Unfortunate debtors usually have excessive debts primarily because of… Read More »
Bankruptcy and House-Buying: What You Should Know
Most mortgage banks follow the Fannie Mae rules, which include a two- or four-year waiting period for a home mortgage that applies in most cases. Usually, the clock begins ticking after the judge issues a dismissal or discharge order. Generally, Chapter 13 filers must wait two years and Chapter 7 filers must wait four… Read More »
Does Bankruptcy Affect Your Security Clearance?
Although most people believe the answer to this question is “yes,” the B-word does not appear in Guideline F of DoD Directive 5220.6, the relevant document in these situations. However, Guideline F does touch on a number of bankruptcy-related matters. It simply says some very unexpected things about the relationship between bankruptcy and a… Read More »
If I File Bankruptcy, Can I Buy A Car?
Absolutely, and it’s a good thing too. Most new cars last about 175,000 miles. At 15,000 miles per year, a typical mileage rate for Chicagoland, that’s a little over eleven years. So, in some cases, a debtor might need another vehicle during bankruptcy. Assume Phil drives a ten-year-old car when he filed Chapter 13… Read More »
Why Does A Person File Bankruptcy?
The simple answer is people file bankruptcy because they owe more than they can pay. Generally, if you spend more than about a third of your income on mortgage debt, credit card debt, and other fixed monthly obligations, that’s too much debt to comfortably repay. Families in this situation have basically two choices. They… Read More »
How Can I Get My Debt Reduced?
Consumer debt spiked in 2022 to over $16 trillion. Because so many people are stretched so thin, seemingly minor issues, like a temporary income disruption, make a manageable debt load unmanageable. A missed payment or two is almost impossible to make up. Usually, Chapter 7 or Chapter 13 bankruptcy is the best way to… Read More »
Chapter 7 Bankruptcy Explained
Financial emergencies that are almost completely beyond their control, like high medical bills, prompt most bankruptcy filings. Unexpected storms on lakes and oceans often cause sailors to lose control of their boats. Likewise, unexpected storms, like high medical bills, job loss, or divorce, cause many people to lose control of their finances. These storms,… Read More »
What Is The Best Interest Of Creditors Test For Chapter 13?
The formal, written bankruptcy exemptions in Illinois protect most core financial assets. So, the idea that people who file bankruptcy lose most or all of their property is largely a myth. But most of these exemptions are value-based. For example, the motor vehicle exemption protects $2,400 of motor vehicle equity. Informal exemptions, such as… Read More »
