Life after bankruptcy

Posted on May 14, 2012 by CBC

After the bankruptcy filing is complete, most of our clients experience tremendous relief and a reduction in stress. By taking control of your finances, stopping foreclosure and/or discharging debt, you have the opportunity to make good decisions about your financial future. Bankruptcy is a valuable legal recourse that enables you to get a fresh start financially.

Here are some basic steps you can follow after filing for bankruptcy:

• Create a budget – follow it! Ask yourself, what your necessary expenses are (rent or mortgage payments, telephone, utilities, food, car payments, insurance) and what you and your family can do without.

• Rebuild your credit. Choose one new credit card to open and carefully consider all purchases. Pay off your credit card every month. Don’t buy anything that you can’t afford.

• Save. Start a savings account and put a certain percentage of your money into this account every month. When challenging situations arise, you’ll be more prepared.

 Using credit wisely after bankruptcy 

Your legal rights during and after bankruptcy

 

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

 

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Often overlooked expenses

Posted on May 7, 2012 by CBC

When listing monthly expenses on the intake form, most clients remember the basics: their mortgage/rent, utilities, car note, food, clothing, insurance, gas, etc. But there are other possible expenses that people often overlook, such as:

 • Bank charges (monthly fees, ATM fees, overdraft fees, check fees, online bill-pay etc) 

• Home office supplies (computer, printer, toner, ink, paper, software, etc) 

• Job hunting (resumes, mileage, postage, fees, stationery) 

• Work expenses (including lunches and snacks)

 • Tax return preparation fees (and other accounting expenses)

 • Postage 

• Ongoing legal fees and costs  

• Parking costs 

• I-PASS (and other tolls)  

• Annual registration cost for motor vehicles  

• Motor vehicle oil changes  

• Other vehicle maintenance (brakes, tire rotation, washer fluid, tires, car washes, etc)  

• OnStar and similar payments  

• Medical (hospital, vision, dental, specialist, physical therapy, chiropractor, mental health) 

• Medical equipment and physical therapy products (canes, crutches, wheelchair, brace, oxygen, weights, etc)  

• Batteries for hearing aids and other health care devices  

• Dental hygiene products (toothpaste, whiteners, brush, floss, mouthwash)  

• Eye glasses and contact lenses (care and replacement)  

• Prescription and non-prescription medications/vitamins 

• Home alarm system (maintenance and fees) 

• Home landscaping and lawn care (lawnmower, trimmer, gas, mulch, etc)  

• Home maintenance (pressure washing, painting inside/outside, etc) 

• Pool care

 Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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The bankruptcy process

Posted on April 30, 2012 by CBC

Below is a description of the bankruptcy process at Consumer Bankruptcy Center. The process may happen in a slightly different order at other law firms, but at some point, all of these things will occur.

• Bankruptcy Intake Form: After contacting a law firm and setting up a consultation, you will likely be sent a bankruptcy intake form. While some intakes are lengthy, they request information which is necessary to complete your bankruptcy. Fully completing the intake before the initial meeting will make the meeting shorter and help you file bankruptcy faster.

• Gather Required Documents: Collect all documents that you were instructed to bring to ensure that you have everything necessary for the law firm to complete the bankruptcy petition. Bringing in all relevant documents to the first meeting will help you file bankruptcy faster. List of Required Documents.

• Your Meeting with the Attorney: Now you are ready to meet with the attorney to decide whether bankruptcy is a good option for you, and sign a retainer agreement with the law firm. If you bring all of the paperwork above, the meeting should go smoothly.

• Pre-Filing Credit Counseling Course: After the first meeting, and prior to filing bankruptcy, you are required to complete pre-petition credit counseling. The course should last about one hour and can be taken in one or two sessions, and can be easily done online or via telephone. It MUST be completed before you can file bankruptcy.

• Signing the Petition: This is the second office visit. You will provide the attorney with any changes to your circumstances. You will also review your completed bankruptcy petition. After signing your petition, your bankruptcy should be filed shortly thereafter.

• Mandatory Post-Filing Financial Management Course: Under the Bankruptcy Code, you must also complete a post-petition financial management course. Our firm policy is that the second counseling course be taken, and the certificate be sent to our office, prior to attending the 341 meeting. If the course is not taken and the certificate is not filed, your bankruptcy case will be dismissed without a discharge, and you will have to pay additional legal fees and court costs to reopen the case.

• The Bankruptcy Court Meeting: Your next involvement will be attending what is known as the 341 Meeting of the Creditors, which will take place between 4 to 8 weeks after the case is filed. You MUST attend. A Trustee will be conducting the meeting. What to expect at the 341 Meeting.

 Congratulations on your fresh start! Once the meeting is over, unless there is an objection or some other issue, the bankruptcy process is essentially over for you. You should receive a discharge from the bankruptcy court about 60 days after the meeting.

 Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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Documents required for bankruptcy

Posted on April 23, 2012 by CBC

The bankruptcy process is a partnership between the attorney and the client. The attorney will prepare your Bankruptcy Petition, but he or she cannot do it without you doing some homework first. Below is a list of typical documents that you will be required to provide at some point in the process. Some of these documents may not be relevant to your situation. There may be other items needed that are not listed as well.

  Photo identification and Social Security card; 

 A copy of your (and your spouse’s, if filing) credit reports. You can obtain for free at www.annualcreditreport.com;* 

 Deeds and mortgages on your house or other real estate;  

 Any insurance policies; 

 Any papers relating to past bankruptcies you or your spouse have filed or that concerned any of your property, including Chapter 13 cases; 

 Copies of your tax returns for the past four years (and evidence of anything owed to IRS);  

 Copies of your paycheck stubs for the last sixty days AND any proof of your income and your spouse’s income for the past six months (such as paystubs for the entire period, paystubs which list year-to-date income, or W-2 statements) – if you are self-employed: six months of profit & loss statements and bank statements;

  Copies of your last three statements for each bank, credit union, and investment or brokerage account, and copies of statements for any retirement or savings accounts, including IRAs, Roth IRAs, education IRAs, 401(k)s, tuition credit programs and medical savings plans (and you should keep the first bank statement you receive after your case is filed as we may need to provide it to the trustee);

  Copies of the latest statements for all credit cards, car payments, utility, phone bills, etc.;

  Legal papers, lawsuits, eviction notices, divorce papers, separation agreements, alimony orders, and child support orders, any judgments, foreclosure notices, property tax bills, escrow account statements; 

 Any appraisals or tax assessment papers; 

 Any motor vehicle title certificates, default/repossession/deficiency notices; 

 Any other papers you have concerning any of your debts; 

 Any lease or installment sale (“lease purchase” or “rent-to-own”) agreements for housing (apartment, house, mobile home) or other property (cars, televisions, etc.) that you have signed and that are still in effect or not fully paid; 

 Any documents showing that someone else regularly contributes to your household expenses, including government assistance (LINK, WICs, unemployment income, etc). 

 If you own a business: Profit & Loss (for 6 months previous to filing), copies of commercial leases, loan/line of credit information, business credit card statements, business tax returns, bank statements, a list of business assets (equipment, fixtures, accounts receivable, inventory, etc. and their current value) and anything else related to the business. 

* CBC will pull all three credit reports once you’ve retained us. However, some law firms require you to bring your own copies.

 

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

 

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Smart Money Week in Chicago

Posted on April 16, 2012 by CBC

April is Financial Literacy Month. In honor of it, the Federal Reserve Bank of Chicago has declared Smart Money Week from April 21-28. The Fed has put together a calendar of financial education events hosted by various organizations. Whether you are about to file bankruptcy, coming out of bankruptcy or just want to educate yourself on finances, check out these Smart Money events.

http://tinyurl.com/SmartMoneyWeek

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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The Means Test explained

Posted on April 9, 2012 by CBC

The Means Test was implemented in 2005 under the new bankruptcy laws. It is used by the courts to determine your eligibility for a Chapter 7 bankruptcy, based on income and expenses. The Means Test is both confusing, and one of the most debated issues in bankruptcy.

There are three steps to the Means Test. The first part is where your income is calculated for the six months prior to filing bankruptcy. This income includes employment, business, rental  and pension/retirement income, child support and alimony, food stamps, unemployment, and other contributions to household expenses (income from the Social Security Act is not included in the Means Test). After imputing the numbers, if your income is at or below the median income for the State of Illinois at the time of filing, you are eligible to file for Chapter 7.

If your income is above the median, all is not lost, as there is still the second step of the Means Test. In that section, your involuntary payroll deductions are taken out. Also, your living, housing, utility and car operation and/or ownership expenses are taken into account. You are allowed deductions for certain living expenses, (which may be more or less than your actual living expenses) that are based on IRS standards for household size and locale. Some additional healthcare costs may also be allowed, if not reimbursed by insurance.

You are also allowed to deduct expenses for the care of elderly or disabled family/household members, actual and necessary education expenses for dependent children under the age of 18 (up to a fixed amount per child), charitable contributions (of up to 15% of your income) and court-ordered payments, such as child support and alimony.

If you have secured debt, such as a mortgage or car note, the remaining payments over the next 60 months (5 years) are also deducted, as well as any default payments on secured debt, back taxes, child support or alimony payments.

In the final step of the Means Test, your disposable income (money left after paying expenses) comes into account. If you have less than $100.00, then Chapter 7 is an option. If you have more than $166.67 per month, you are not eligible for a Chapter 7. If the disposable income is between $100.00 and $166.66, and is less than 25% of your unsecured, non-priority debts, then you pass the Means Test and can file for Chapter 7. Otherwise, unless you can prove special circumstances, you must file a Chapter 13.

And if all of this Means Test madness wasn’t enough, you may still have issues with having too much disposable income after completing Schedules I and J, even if you pass the Means Test.

Seeing how complicated the Means Test can be, you should speak to a bankruptcy attorney to determine your eligibility for bankruptcy.

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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Are tax debts dischargeable in bankruptcy?

Posted on April 2, 2012 by CBC

Many people believe that you cannot discharge IRS tax debt in bankruptcy. This is not true. Some taxes are dischargeable in Chapter 7, if the ALL of the following are true:

•   The due date of the tax return was at least three years prior to filing bankruptcy. An extension “tolls” (extends) the three year rule.

•   The tax return was filed at least two years prior to bankruptcy. The two year clock starts ticking from the date of the filing of the tax return.

•   The taxes were assessed by the IRS at least 240 days before the bankruptcy filing. This date may also be extended if the IRS suspended collection activity because of an Offer in Compromise or a previous bankruptcy filing.

•   The tax return was not fraudulent.

•   The taxpayer cannot be found guilty of tax evasion.

Note that the tax debt must be from income tax. Debts from payroll taxes or penalties cannot be discharged.

Another important point to note is that bankruptcy will NOT discharge tax liens on property. Although your personal liability to pay may be discharged, any tax liens recorded on your property prior to filing bankruptcy will still exist. The tax lien must be paid off when you sell your property.

Speak to a bankruptcy attorney to see if your tax debts are eligible for a discharge.

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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Stop creditor harassment!

Posted on March 26, 2012 by CBC

The Fair Debt Collection Practices Act (FDCPA) usually applies to collection agents, repossession agents and collection law firms. The law prevents debt collectors from using harassing, misleading or unfair debt collection practices to collect debts.

If a debt collector violates your rights under the FDCPA, they may have to pay you – even if you owe the money!

A violation of the FDCPA may entitle you to recover up to $1,000.00 in statutory damages, as well as any actual damages you suffer. On top of this, the FDCPA entitles you to recover your reasonable attorneys’ fees and costs.

 Here are some common situations that may be a violation of the FDCPA or other consumer laws:

 •   Repossession agents that break into your locked garage, or who threaten you with violence or do anything that involves having the police called.

•   Foreclosures where you are locked out of your property before a court order. 

•   Use of an “auto dialer” to call your cell phone, when you did not give the creditor or collection agency your number.

•   Debt collectors calling you 10-15 times a day.

•   Debt collectors calling you before 8:00 in the morning or after 9:00 at night.

•   Debt collectors calling you at work and telling people about your debt.

•   Debt collectors calling you at work, after you have informed them (verbally and in writing) that your employer does not approve of them calling you.

•   Debt collectors continuing collection efforts even after you have advised them to stop (preferably in writing, with a confirmation of receipt).

•   Debt collectors calling you without identifying who they are, what agency they are working for and the creditor they are representing.

•   Debt collectors calling you to make false statements about the debts they are collecting.

•   Debt collectors calling you and threatening to sue you (when they are not law firms).

•   Debt collectors calling you and threatening to humiliate you by contacting friends or relatives.

•   Debt collectors contacting third parties (relatives, employers, co-workers, friends, neighbors) about your debts.

•   Debt collectors calling you and threatening to bring criminal charges, or threatening jail if you do not pay.

•   Debt collectors make false or misleading statements in written collection materials.

•   Debt collectors reporting inaccurate information about you to a credit bureau.

•   Debt collectors trying to collect OLD debts.

•   Debt collectors trying to collect debts that are not your debt, or for the wrong amount.

•   Reporting debt on your credit report which is not yours.

If you think a debt collector is violating your rights, save your evidence (letters, phones messages) and keep a log of the events.

Call CBC today at (312) 346-STOP (7867) for a FREE evaluation of your situation!www.consumerbankruptcycenter.com

 

 

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What is the Automatic Stay?

Posted on March 19, 2012 by CBC

Immediately upon the filing of a bankruptcy case (any chapter), the automatic stay comes into effect. The automatic stay prevents all creditors from proceeding with collection efforts. In fact, they MUST STOP.

The automatic stay stops:

  • Foreclosure sales
  • Repossessions
  • Evictions (unless judgment was obtained by Landlord prior to bankruptcy)
  • Garnishments
  • Bank account levies
  • Filing of new lawsuits
  • Continuance of existing lawsuits
  • Collection calls

Violation of the automatic stay may result in the awarding of actual damages caused by the violation, and sometimes for punitive (punishment) damages. Let your attorney know about any violations immediately!

The automatic stay remains in effect until:

  • A judge grants a “lift” of the stay at a creditor’s request;  
  • The property in question no longer belongs to the estate; or
  • The debtor receives a discharge. 

Once the debtor gets a discharge, the automatic stay becomes a permanent injunction. Creditors may no longer collect for the discharged debts. 

If your debt has been discharged and creditors are still harassing you about pre-bankruptcy debt, call us today! Creditors may have to pay you money, including your attorney fees!

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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What to expect at the 341 Meeting of the Creditors

Posted on March 12, 2012 by CBC

Approximately 4-8 weeks after filing your bankruptcy case, the 341 Meeting of the Creditors will take place. Despite the name, creditors rarely show up. However, you and your spouse (if you file jointly) MUST be present! If you do not attend the meeting, the Trustee may dismiss your case without discharging your debts.

You must bring your Social Security card and photo ID, to allow the Trustee to prove your identity. It is also a good idea to bring your paystubs from the date of filing to the 341 meeting, as well any bank statements from that period, in case the Trustee asks to see them.

While the 341 meeting is required and is an important part of your bankruptcy case, it is nothing to fear. Generally, a 341 meeting will last less than 10 minutes, unless there are issues that arise.

Although your attorney will be present at the 341 meeting, he or she does not play an active role in the meeting, unless asked by the Trustee to provide information, or if you appear not to understand a question.

The meeting is recorded, so you must speak loud enough for the recorder to catch your response. The first thing the Trustee will do is have you state your name and address for the record, and swear you in. He or she will then verify your social security number and identity.

The Trustee will then ask you to verify your signature on the Declaration Regarding Electronic Filing that you signed along with your bankruptcy petition. He or she will ask if you reviewed the petition, whether the information in the petition is true and correct, or if anything has changed since you filed. The Trustee will also ask if you have previously filed bankruptcy, for the address of your current employer and if you’ve filed taxes for the past four years.

Some other general questions are whether you have any interest in real estate, and if so, how much you owe and what the value of it is. You may also be asked if you have transferred any property within the last couple years, or if anyone is holding any property for you. You will be asked if anyone owes you money, or if you have a claim against anyone (which you could potentially sue them for). Also of interest, is if you are entitled to life insurance proceeds or about to receive an inheritance. If you have a business, you may be asked a few questions about the business and its assets. This is not a complete list of questions, but are the most often asked.

You should keep your answers to questions brief, usually “Yes” or “No” will suffice. If you do not understand something, let the Trustee know. If you do not know the answer, do not make one up – tell the Trustee that you don’t know. You will be given time to get the information to the Trustee later, if he or she requires it.

Just remember – the most important thing about the 341 meeting is to show up!

Call CBC today at (312) 346-STOP (7867) to schedule your FREE consultation! www.consumerbankruptcycenter.com

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