Recent Blog Posts
Chapter 7 vs. Chapter 13 Explained
Fundamentally, Chapter 7 and Chapter 13 are the same. Both kinds of consumer bankruptcy offer a fresh start to an honest but unfortunate debtor. Honest debtors are forthcoming about their financial situations and cooperate with court personnel, including the trustee (people who manage bankruptcies for judges). Unfortunate debtors file bankruptcy due to circumstances beyond… Read More »
Can I Consolidate Credit Card Debt?
Most people need to do something about credit card debt. The average credit card debt load has increased to over $7,200 per cardholder. That’s more money than most families can comfortably repay. IN some cases, consolidating credit card debt is the best approach, especially if your credit card debt is significantly below the average…. Read More »
Advanced Home Protection Loopholes in Bankruptcy
Illinois’ home equity exemption is different from many other bankruptcy exemptions. This exemption is value-based as opposed to item-based. So, it only protects a certain amount of home equity. Debtors who have lived in the same house for more than about fifteen years often have a substantial amount of equity in their homes. Furthermore,… Read More »
Bankruptcy and Social Security Benefits: A Primer
Social Security benefits, whether disability-related or age-related, are 100 percent exempt in an Illinois bankruptcy. The same exemption applies to most other government benefits, such as federal VA disability benefits and state workers’ compensation benefits. The bankruptcy exemption doesn’t suspend offset rules, so debtors may not get to keep all their benefits. However, the… Read More »
How Does Bankruptcy Affect My Security Clearance?
Contrary to popular myth, bankruptcy filings do not trigger security clearance revocation, denial, or other adverse action. Neither the government nor private entities, like employers or landlords, may discriminate against bankruptcy filers. However, a bankruptcy filing could trigger a DoD Directive 5220.06 inquiry. After notice and hearing, the DoD may take adverse action against… Read More »
Does Bankruptcy Make it Hard to Buy a Car?
Yes. If people say otherwise, they don’t know what they’re talking about or they’re telling you what you want to hear. Bankruptcy makes it hard, but not impossible, to buy a car. The same principle applies to other major purchases, including a house. In fact, in most cases, debtors can buy cars while they’re… Read More »
Student Loan Forgiveness: Supreme Court Refuses to Reinstate Biden’s Plan
In an unsigned August 2024 order, the Justices stated that they would continue to block a student loan cancellation plan while the appeals process plays out in Biden vs. Missouri et al. The order leaves the injunction from the U.S. Court of Appeals for the 8th Circuit in place for now. The Education Department… Read More »
What Not to Do After Filing Chapter 7
Many people, including famous industrialist Henry Ford, recovered from bankruptcy by making a new plan and sticking to that plan. Like many of us, Ford was a slow learner. He filed bankruptcy twice, in 1899 and 1901. The Detroit Automobile Company went bankrupt because Ford was a perfectionist. The Henry Ford Company went bankrupt… Read More »
Why is Bankruptcy a Good Option?
Filing bankruptcy is a good option if your non-housing expenses, such as vehicle payments, credit card bills, and medical bills, exceed 36 percent of your net income. If that’s the case, you have more debt than you can comfortably repay. People in these situations have two basic options. They can sit back and watch… Read More »
Are Chapter 7 Bankruptcies Ever Denied?
No, unless the debtor fails to meet one of the two basic qualifications for bankruptcy. All debtors must be honest and unfortunate. Honest debtors aren’t trying to manipulate the system for their own purposes, and unfortunate debtors are, well, unfortunate. More on these things below. Honest and unfortunate debtors receive all the benefits of… Read More »
