Can My Illinois Bankruptcy Attorney File a Chapter 7 Bankruptcy For Me and Get Rid of My Debt?

Chapter 7 Bankruptcy is many people’s ultimate weapon in getting rid of all their unwanted debt and starting fresh. However, in order to file for a Chapter 7 Bankruptcy, you must meet the criteria set out by the bankruptcy code (the law governing bankruptcies). For a Chapter 7 Bankruptcy this means that:

  • Your income is not over the “means test;”
  • You have not filed a bankruptcy before for a certain amount of time; and
  • You cannot have a large amount of assets or things that you could be using to pay off your debts; and
  • You cannot be trying to cheat your creditors (the people you owe money to)

So, right about now you’re probably scratching your head wondering what that means and whether you actually do qualify. Well, the rest of this article will explain these three criteria for you:

1. The Means Test

Even though the laws are written to give everyone a fresh start through bankruptcy, the laws also try to be fair to the people you owe money to (creditors). In this regard, the bankruptcy laws will only let you get rid of your debt if your income isn’t too high. This is done by determining what your “current monthly income” is for you (and your husband or wife if you are married). This is determined by looking at your average income over the past six months. This amount is then compared to the average amount of money a family of your size makes inIllinois. If your income is less than or equal to that amount, then you can file for a Chapter 7 Bankruptcy. I would post this amount here, but it changes often and, like I said, it is different based on your family’s size.

But wait! There’s more! Even if you don’t qualify because you make more than the average amount of money a family of your size makes inIllinois, a knowledgeable Bankruptcy lawyer can still help. Many times someone will make more, but, because they have expenses that can be used to reduce the “current monthly income” amount, we can still file a Chapter 7 Bankruptcy for them.

If all else fails, like I said, the laws are written to be fair. As such, if you make too much money for a Chapter 7 Bankruptcy, then a skilled Bankruptcy Attorney can still help you get rid of a lot of your debt, and force the creditors into accepting a low monthly amount for the rest of the debt, through a Chapter 13 Bankruptcy.

2. Prior Bankruptcies

This is pretty straight-forward. Because the laws are trying to be fair to both you and the people you owe money to, you can’t get rid of all of your debt today, turn around and have a massive party costing $300,000 tomorrow, file bankruptcy next week and then, after that, buy a Lamborghini for $500,000 and file for bankruptcy the next month. The way the law stops this is by creating a waiting period before you can file for bankruptcy after you have already filed for bankruptcy. In this regard, you cannot file for a Chapter 7 Bankruptcy for 8 years after you file for a Chapter 7 Bankruptcy. There are also some other waiting periods for you if you have filed a Chapter 13 before you can file a Chapter 7 if you’ve gotten a “discharge.” Luckily though the law is still fair to you and allows many people to file for a Chapter 13 very swiftly if they have filed for a Chapter 7 before. Call us today to find out more!

3. Excessive Assets

A good bankruptcy attorney can use all of the available property “exemptions” to protect a huge amount of assets (things and money you have) from the people you owe money to (including, for most people, their house, cars, retirement funds, a lot of their furniture and a set amount of cash). BUT, even the best bankruptcy attorney cannot protect someone who is, essentially, a millionaire just trying to not pay. Why? Because that is just not fair!

Again, because the laws are trying to be fair to both you and the people you owe money to, you can’t amass millions of dollars, quit your job, and, then, 7 months later file bankruptcy and state that you have zero dollars in income. Actually, you could, but the millions of dollars in money that you have would be taken away from you by the “trustee.”

To know what you can, and can’t, keep in a bankruptcy, you must really speak with an attorney.

4. Cheating your Creditors

Remember how I said you can’t just have a $300,000 party a day after you file bankruptcy and then file bankruptcy the next day? Well, you also can’t just have a $300,000 party and then, the next day, file bankruptcy. Again, this is because the bankruptcy laws are trying to be fair to you and the people you owe money to. In this regard, someone that is just racking up a huge amount of debt, but knows that he is going to be trying to get rid of that debt a few months later, is not going to be helped out by bankruptcy. Bankruptcy is designed to help people overwhelmed by debt and struggling to pay their bills get a fresh start, not to protect the frat boys in Animal House.

If you, or someone you know is struggling with overwhelming debt and needs a fresh start, call us today! At Shunneson Law Office, I am devoted to giving you a fresh start, while protecting important property in the face of overwhelming debt. Contact us for a free phone consultation to better inform you prior to talking to an attorney, or anyone else making promises about your financial future. Located in Lake County, Illinois, with meeting locations throughout Chicago, we have ability to meet with you at any convenient Chicagoland location from 9:00 a.m. to 5:00 p.m., Monday-Friday. However, evening and weekend appointments are available upon request by calling 847.693.9120.

-Drake Shunneson (copyright 2013)

NOTICE: The materials provided are for informational purposes only and should not be viewed as legal advice. The materials also mainly concern Chapter 7 bankruptcies. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problems. This article, by itself, does not create an attorney-client relationship and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual, attorney, entity or individual. Photos: FreeDigitalPhotos.net.

This article has also been published, with permission, on Attorney Karen Walin’s Blog.

Unlike Some Bankruptcy Firms, We Will Do More Than Simply Give You a List of Documents to Provide Us and Will Help You Make Sure Your Life is Back on Track When You File a Bankruptcy

When she came to us, her life was falling apart. She was a single mother of three who had recently gone through a divorce. Her husband kept the house in the divorce and she was forced to move to a bad part of town. She rented an apartment where she hoped she could survive. Even though the apartment was in a bad part of town, she was barely scraping by. Although she had the same job for five years, she was getting paid only slightly above minimum wage. In order to survive, she was using a combination of payday loans and credit cards. Unable to keep up with her debt, she started to fall behind. Soon she found herself $80,000 in debt to the banks. Then the creditors started to call. Unable to get her to pay the outrageous debt that had accumulated as a result of the 20% interest they were charging her, they sued her in state court. Without an attorney to help her, she didn’t know what to do and hoped the banks would just leave her alone. The banks didn’t and eventually got a judgment against her. Then, at some point, she found herself in need of new glasses and unable to see very well. She saw her doctor and got a prescription for new glasses. Although the prescription was expensive for her at around $200, she knew she would be getting a tax return soon that would help her out. What she didn’t know was that the banks were hiding in the shadows ready to pounce and, when the tax return hit her bank account, they immediately filed a garnishment on her account. This was all the money she had in the world at that time. Despondent, alone, and terrified about her future she came to us in tears. Unlike some big bankruptcy firms, we were always available to listen, we were always there for her when she needed someone, and we provided her with guidance as we prepared her Chapter 7 bankruptcy petition. Utilizing our years of experience, we filed her petition, and, because the bank had not followed all of the procedures in taking her tax return, we got her the money back, which she used to pay for rent, glasses, food, and gas.

However, this was not the end of the matter for us. After we calculated her income and expenses, we determined that she was spending more per month than she was making. We knew bankruptcy wasn’t the ultimate solution for her and that, if we didn’t help her, she would soon find herself right back where she started with another $80,000 of debt. So we helped her by explaining that several of her biggest expenses were not necessary and provided her with sound financial advice that would guarantee that she wouldn’t have this problem again. We advised her on getting a roommate to help with her rent, switching to lower-cost phone carrier to cut her phone bill by 1/3, and explaining how she should cut out discretionary spending to a local gym that was charging her over $100 per month. By listening to us, she was able to cut her expenses in half and have a positive net monthly income.

This service we provided was very time consuming, but we felt that this service had to be done and didn’t charge her a dime for this advice, even though it was not part of the preparation of the bankruptcy she had hired us for. This is the advantage of utilizing a small law office such as ours. Many big bankruptcy firms will not provide any other service besides making sure you qualify for a bankruptcy and filling out the paperwork because, presumably, it would hurt their bottom line too much. However, even though making sure we can afford to stay open is a vital concern and we can’t guarantee we will be able to do this for your case, helping people is also a goal that we strive for and, in this situation, we felt it was imperative that we help our client. Her life had been hard and very few people had ever given her a helping hand. It was about time someone did and we were happy to do it.

Our office is proud to state that not a single bankruptcy petition we have filed has ever been rejected and that all debtors that we have filed for have obtained a discharge order. She was no different and the bankruptcy court granted her a discharge of her massive debts. The last time we saw her she again, she came to us in tears, but this time of sheer happiness. She knew that she was no longer alone and that there was, at least, one person who would protect her rights and that she would never have to worry about facing the future because, even if we couldn’t help her, we would be here to take her calls.

When we saw she was wearing her new glasses, we couldn’t help but cry too.

At Shunneson Law Office, I am devoted to giving you a fresh start, while protecting important property in the face of overwhelming debt. Contact us for a consultation or for a FREE INFORMATION PACKAGE to better inform you prior to talking to an attorney, or anyone else making promises about your financial future. Located in Lake County, Illinois, with meeting locations throughout Chicago, we have ability to meet with you at any convenient Chicagoland location from 9:00 a.m. to 5:00 p.m., Monday-Friday. However, evening and weekend appointments are available upon request by calling 847.693.9120.

-Drake Shunneson (copyright 2012)

NOTICE: The materials provided are for informational purposes only and should not be viewed as legal advice. The materials also mainly concern Chapter 7 bankruptcies. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problems. This article, by itself, does not create an attorney-client relationship and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual, attorney, entity or individual. Photos: FreeDigitalPhotos.net.

Can I Inherit Property While I’m in Bankruptcy or File Bankruptcy After I Inherit Property?

Earlier this week I met a man whose mother had, unfortunately, recently passed away. Part of the estate included the mother’s home, which was worth $100,000. The man also had credit card debt, medical debt, and business debt of over $60,000. This man had two very good questions. First, whether he could file bankruptcy without telling the bankruptcy court before, or after, he accepted the inherited property. Second, whether he could keep the home if he did report it to the bankruptcy court.

As will be discussed more below, the answer to both of these questions was, surprisingly, yes.

With regard to the first question, it is understandable why clients feel that the inheritance should not be included in the pile of money that goes to creditors (called the bankruptcy estate). Inheritances generally consists of property their loved ones gave them in the hopes that it would help them through their tough times. In most cases, the inheritance is something people don’t even anticipate. Zero percent of people want to give everything they own to their sons or daughters creditors after they die. Many clients agree and feel as though the property passed on between generations for the purpose of making their life better shouldn’t be scooped up by bankruptcy trustees for the benefit of creditors that had no right to the property mere days before.

This view is supported by laws in many other areas. For example, inheritance property obtained by one spouse during the course of a marriage in Illinois is considered the non-marital property of that spouse and is not included in the marital estate. Unfortunately, the bankruptcy laws make inheritances an important part of the bankruptcy estate. In this regard, pursuant to 11 USC 541(a)(5), any property a debtor becomes “entitled to acquire within 180 days…by inheritance” is part of the bankruptcy estate. As such, if you are “entitled” to acquire property, whatever that property is, within 180 days of the date your petition is filed, then that inherited property is technically property of your bankruptcy estate. The word “entitled” was purposely used to communicate that the date the inheritance becomes part of the bankruptcy estate is the date the deceased passed away and not the date it is actually acquired. Accordingly, the inherited property is part of the bankruptcy estate even if your loved one dies after the petition is filed, and even if it takes years to actually acquire it.

As an aside, other provisions of the bankruptcy code also put duties on those that inherit property to let the court know of this fact. As such, many provisions of the law require that a debtor that has filed a petition prior to the entitlement date amend the bankruptcy paperwork to disclose the inheritance. This is an obviously necessary part of the law to make sure any property acquired by inheritance after the bankruptcy is filed is part of the estate. This means you can’t file a bankruptcy before you obtain any inheritances and avoid making it part of the bankruptcy estate.

With regards to the second question, the bankruptcy code actually will allow you to keep the home in certain situations. This very pro-creditor law that gives your creditors property from your loved ones after they pass away six months after your bankruptcy is filed is tempered by other provisions of the bankruptcy law. The bankruptcy code allows for debtors to use certain “exemptions” to keep property. Initially, all clients are well-advised that they are allowed to discharge mortgage loans in Chapter 7 bankruptcy. However, most people with questions about an inherited second home want to know if they can keep both their own home and the second home. In order to do that, you will need to do two things (at least in a Chapter 7 case).

First, you will need to “reaffirm” with the bank. This consists of signing a new contract with the banks stating you will continue to pay your mortgage. In most cases, this is a fairly simple process if you can show ability to pay for the mortgage.

Second, you must be sure that the available “equity” (value of the home above the mortgage) in your home does not exceed the available exemptions. For your residence, this requires a review of the various homestead exemptions. This exemption is not available for your second home. Instead, you will need to utilize one of the other available exemptions. Most often, this will be the wild card exemption.

For example, in the situation with the man whose mother had recently passed away, we had to inform the man that his second home would probably be part of the bankruptcy estate under the bankruptcy law. However, it turned out that this second home had a mortgage of $94,000 and an estimated value of approximately $96,000 – $100,000. Of course, bankruptcy laws require that you provide proof of the value of a home. An appraisal would be necessary to determine whether the bankruptcy code could actually allow the man to file bankruptcy, reaffirm his mortgages, and keep both homes. For the sake of argument, however, let’s assume the appraisal comes back in the man’s favor for $94,000. This would allow for the man to keep both homes under current bankruptcy law. Given the market for homes right now, it is very likely the appraisal will come back in his favor.

At Shunneson Law Office, I am devoted to giving you a fresh start, while protecting important property in the face of overwhelming debt. Contact us for a consultation or for a FREE INFORMATION PACKAGE to better inform you prior to talking to an attorney, or anyone else making promises about your financial future. Located in Lake County, Illinois, with meeting locations throughout Chicago, we have the ability to meet with you at any convenient Chicagoland location from 9:00 a.m. to 5:00 p.m., Monday-Friday. However, evening and weekend appointments are available upon request by calling 847.693.9120.

-Drake Shunneson (copyright 2012)

NOTICE: The materials provided are for informational purposes only and should not be viewed as legal advice. The materials also mainly concern Chapter 7 bankruptcies. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problems. This article, by itself, does not create an attorney-client relationship and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual, attorney, entity or individual. Photos courtesy of FreeDigitalPhotos.net.

Five Things Banks Do Not Want You To Know About Foreclosures

What most people fear most is losing their home to a foreclosure sale. The idea that you may lose your home can have a devastating impact on your emotional well-being and invariably consumes many of your thoughts. The frustration of dealing with a large debt over your head, harassing creditor calls, trying to catch up on the bills and mounting lawsuits can be too much for almost anyone to handle. Fortunately, Congress has adopted biblical law that allows for the release of your debts under the Bankruptcy Code. Understandably, banks don’t want you to know your rights under this code because it gives you a fighting chance against them by allowing you to wipe out, or drastically reduce, your debt and live the American Dream again! Here are the five things banks don’t want you to know about Foreclosures and Bankruptcy:

I. Bankruptcy Is An Ancient Law That Banks and Billionaires Want People to Feel Bad for Using

Banks and Billionaires want you to feel bad about bankruptcy so that they can get more money out of you. At the same time, Banks and Billionaires want to use bankruptcy to get rid of billions of dollars of bad debt while accepting government bailouts. For example, Lehman Brothers filed for bankruptcy on $613,000,000,000 of debt in 2008, forcing a massive government bailout. Billionaire Donald Trump filed for bankruptcy, at least, four times stating that he has used the laws of the country to “pare debt” and “make…fantastic deals.”

Bankruptcy is an ancient, respected law and our version of the code is based on the biblical requirement that a creditor grant a release of debts once every seven years (Deuteronomy 15:1-2). Don’t let the banks make you feel bad for using the code now that you know they just want to get rid of their own real estate debt, but keep you on the hook for yours!

II. Filing Bankruptcy Will Stop Foreclosure of Your Home

Filing bankruptcy immediately stops foreclosure actions, including foreclosure sale. After a bankruptcy is filed, the bankruptcy court will issue an “automatic stay” order that will stop all collection actions against you and your property. Even if you can’t keep the home because of your financial situation, and the type of bankruptcy filed, you will almost certainly be able to stop foreclosures for months, if not longer!

III. Most People That File Bankruptcy Get to Keep Their Home

Illinois law, like virtually every state, allows for people to file bankruptcy and “exempt” certain property. In Illinois, one of these exemptions is known as the “homestead” exemption, which is your home. This allows for individuals capable of paying for their mortgage to get rid of, or drastically reduce, other debts and keep their home.

IV. Mortgage Loans CAN BE DISCARGED in Bankruptcy

Chapter 7 bankruptcy allows for you to get rid of mortgage loans (as well as virtually every other debt such as credit card, medical bills, lawsuits, auto loans, etc) and surrender your home to the bank. Discharge Means Getting Rid of Debt, ALL DEBT and Surrendering Your Home Chapter 7 discharge not only allows for you to get rid of mortgage debt, but it allows for you to return your home to the bank, not owe for any past debt AND not owe for any future debts. If you know your financial condition won’t let you keep paying the mortgage, the best solution is to get rid of your large debt!

V. Foreclosure is Worse for Those Who Care About Credit Reports

Initially, it should be noted that credit reports and credit scores are created by three large private companies that are on the banks’ side. In my personal opinion, the concept of a credit score given to us by hypocritical banks is just psychological warfare against citizens with limited resources. With over 391,000 people declaring bankruptcy in 6 months in 2007, bankruptcies are no longer an uncommon situation that will “destroy” your credit as the banks would have you believe. Further, if you are looking at foreclosure, can’t pay your bills, or are already in a lawsuit, then it is likely your credit is “destroyed” anyway. Nevertheless, a foreclosure on a credit report is ultimately much, much more important to a mortgage lender than a bankruptcy that doesn’t include the house. Why let what someone else says about you get in the way of using a wonderful tool to get rid of unwanted debt?

I understand how difficult it is when you have nothing but large amounts of debt. You are in danger of losing your home, owing the banks more money even after foreclosure, creditors constantly calling and harassing you, scumbag credit counseling companies are promising to get rid of your debt, you are struggling to pay bills and you could be in the midst of lawsuits where the banks are threatening to garnish your wages. Shunneson Law Office is here to help! As a solo practitioner I give every second to my clients and am always available to assist you. I provide QUALITY, LOW-COST SERVICES for all of my clients.

At Shunneson Law Office I am devoted to giving you a fresh start, while protecting important property, in the face of overwhelming debt. contact me for a FREE information package where you will get a package of information to better inform you PRIOR to talking to an attorney or anyone else making promises about your financial future.

-Drake Shunneson (copyright 2012)

Notice:

The materials provided are for informational purposes only and should not be viewed as legal advice. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problem. This article, by itself, does not create any attorney-client relationships and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual attorney, entity, or individual.

How to File Bankruptcy Without a Social Security Number


Many individuals often wonder whether an illegal immigrant may file for bankruptcy and/or whether a social security number is required to file bankruptcy. 11 USC 109 states that a person that “resides or has a domicile, place of business, or property in the United States, or a municipality, may be a debtor (petitioner, bankruptcy filer, person who wants to file bankruptcy) under this title.” (explanation of debtor added). Although there are certain limits for entities such as railroads, etc. there is nothing in this section, or the bankruptcy code, that requires you have a social security number to file bankruptcy. In order to accommodate this, an individual without a social security number should complete, and sign, a document titled a Statement of Social Security Number. Even though the document is titled a “Statement of Social Security Number,” it allows for a filer to provide for either a social security number, an Individual Taxpayr Identification Number (ITIN), or state that the filer does not have either a ITIN or social security number. It is actually very easy to get an ITIN number. These are provided by the Internal Revenue Service so that those who can’t get a social security number, but must report income and pay taxes, can do so.

Despite these rules, it may be very difficult, if not impossible, for an illegal immigrant, or someone without a valid social security number, to file bankruptcy without either a social security number or an ITIN. As will be discussed infra., if an illegal immigrant uses, or has used, someone else’s social security number, it is still very likely that you will not be able to file a bankruptcy petition.

With regards to the first issue (filing without a social or an ITIN), Rule 4002 of the Bankruptcy Procedures, among other rules, requires that a debtor bring proof of identity to the meeting of the creditors. As a practical matter this means that a debtor without a social security number must apply for, and obtain, an ITIN. Accordingly, while you are allowed to file without a social security number, it is imperative that you obtain an ITIN to ensure that you provide acceptable proof of identity at the meeting of creditors. As an aside, it is also very important that, based on 11 USC 109 that an individual be able to show proof of residence, such as a valid lease.

With regards to the second issue (filing with a ITIN, but previously using someone else’s social or a made up “fake” social), it should initially be noted that, pursuant to 42 USC 408(a)(7)(B) and (C), it is a crime to use a fake social security number or use someone else’s social security number. This is why it is imperative that you not use a fake social security or someone else’s social security number in your bankruptcy petition. If you have previously obtained a loan, filed tax returns, or otherwise utilized the social security number for financial purposes, then other issues can arise with your bankruptcy filing.

Most importantly is filing a bankruptcy petition with an ITIN where the filer has utilized a different social security number on his or her tax returns. A Trustee will certainly notice this discrepancy and it will be in stark contrast to the tax returns. This could automatically tip-off the trustee that there has been a violation of 42 USC 408(a)(7)(B) and (C). Further, you will be making the criminal case for the government despite your right to remain silent since bankruptcy filings are useable in other proceedings. Thus, anyone that has
used a false social security number on previous tax returns should not file a bankruptcy unless they have filed tax returns utilizing the ITIN for the applicable periods.

Most importantly, from an attorney’s perspective, is that debts obtained by fraud are non-dischargeable under the Bankruptcy Code. Although many attorneys may not agree with me, it is my opinion that if someone gets credit or a loan using someone else’s social security number, then the individual has committed a fraud on that creditor (obtaining property by misrepresenting their identity) and will not be able to file for bankruptcy (if the credit was obtained with a fake, or “made up” social, then it is arguable that the credit was not obtained through fraud since there was no such misrepresentation). Further, an attorney that files a bankruptcy knowing that the credit and/or loan was obtained through the use of a fake social security number could face ethical sanctions for violations of the Illinois Rules of Professional Conduct since this could be viewed as assisting a client in committing a fraud in violation of said rules.

Next, as mentioned, bankruptcy filings are useable in other proceedings. A bankruptcy petition where a debtor files taxes with a false social security number, a statement of no social security number, and/or a statement of an ITIN number could potentially result in immigration consequences. This is extraordinarily unlikely under current immigration procedures and I have never, ever, ever heard of this happening in the entire time I have practiced as an immigration attorney. In most cases, the risks to the client are more palatable then the alternative for many clients and an attorney should use his judgment in deciding whether it is worth proceeding in an appropriate case. However, a client must be made aware that this is a possibility even though it is almost never going to happen.

Despite this fact, these filings will almost certainly be used against an immigration client if they have faced criminal prosecution by filing a bankruptcy with a false social security number. It is worth mentioning nobody can force you to obtain a social security number if you have no right to one. As such, do not use a false social security number or a fake social security number under any circumstances and obtain an ITIN as soon as possible to file taxes. This should be done even if you do not want to file bankruptcy to avoid potentially serious criminal consequences.

As this article should demonstrate, anyone wishing to file a bankruptcy that does not have a valid social security number faces very difficult legal questions and hurdles. It is impossible to discuss every possible scenario in this article and, for anyone that is in this situation, it is imperative that you speak with an attorney immediately regarding your particular case.

At Shunneson Law Office I am devoted to giving you a fresh start, while protecting important property, in the face of overwhelming debt. Call (847) 693-9120 for more information.

-Drake Shunneson (copyright 2012)

Notice:

The materials provided are for informational purposes only and should not be viewed as legal advice. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problem. This article, by itself, does not create any attorney-client relationships and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual attorney, entity, or individual.  Photos courtesy of FreeDigitalPhotos.net.