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Lisle Legal Issues Blog

Foreclosure relief scams are still very much a problem

Home. For many people in Illinois, their homes are places of refuge. They are places to escape all the bad that is going on in their lives. Unfortunately, numerous individuals in the state are facing the threat of foreclosure; so now, even their homes are not places where they can go to seek some level of relief.

When there is a chance that one might lose his or her home to foreclosure, it is normal to research the many ways available to stop the process. A quick Google search for "how to stop foreclosure" will bring up a number of ideas, some of which can really do more harm than good. For example, debt relief firms have been around for quite some time. They make amazing promises but their actions fail to deliver on those promises.

Need to file for bankruptcy again after a Chapter 7 approval?

You did it, you filed for bankruptcy. After your Chapter 7 filing was approved and your debt discharged, you worked hard to improve your financial situation, but despite your best efforts, you have found yourself facing similar economic struggles again. This is a situation in which many Illinois residents have found themselves. What can you do?

Did you know you may be able to file for bankruptcy again? It is true. In order to do it, though, you will have to wait a certain amount of time between filings.

Is tapping your 401(k) plan a good alternative to bankruptcy?

Virtually no one wants to file for bankruptcy. It is far preferable to have manageable debt and generous income streams. However, that is not always realistic. If you are considering tapping into your 401(k) to avoid a bankruptcy filing, it may not be a good move.

For one thing, you will likely be able to keep your retirement plan during and after bankruptcy. That means no one has to go into it to pay off, say, your credit card debt. The tens of thousands or hundreds of thousands of dollars in the account are yours. If you take that money (or some of it) out to pay down debt, you could be incurring tax penalties, and you are hurting account earnings in the long term. Plus, it may not make enough of a dent, and you will end up filing anyway. For another thing, there are other alternatives to try first.

Chapter 13, Chapter 7 or debt settlement -- which is better?

Anyone in Illinois who is looking for financial relief has probably seen or heard advertisements for debt settlement programs. These are offered by firms who claim that they will work with one's creditors in order to lower and pay off one's debts. All they ask is that payments go directly to them and not to one's creditors. While the idea may sound appealing, the reality of it for many people is anything but. What really is better, trusting a debt settlement firm or just taking the leap and filing a Chapter 13 or other type of bankruptcy?

While no program is perfect, debt settlement firms are in it for the money. They charge pretty hefty fees that must be paid before they are willing to negotiate debts with creditors. On top of that, they also often fail to mention some pretty important bits of information to clients, such as:

  • Forgiven debt is considered taxable income
  • Negotiating debt can take several years
  • Debt settlement can hurt one's credit just as badly as bankruptcy
  • Filing for bankruptcy does not mean that the court will take all of one's possessions

Chapter 7 bankruptcy: To file or not to file?

Illinois residents who are really in tough financial spots may not know exactly what to do to help their situations. No one really wants to file for Chapter 7 bankruptcy, but sometimes when the money just is not there it is the best option. How can filing for bankruptcy be of help? What are the drawbacks to it?

There are a lot of pros and cons to requesting a Chapter 7 filing. It is important to weigh them all before making a final decision about whether it is the right direction to take for one's situation. Some of the pros include:

  • Fast debt relief
  • Can keep some property by filing exemptions
  • Stop creditor harassment
  • Ability to seek lines of credit in one to three years

Can I file a Chapter 13 bankruptcy today?

Bankruptcy filings can a take a bit of time to put together properly. However, there are those in Illinois who may not have all the time in the world to wait. Sometimes, due to creditor threats of foreclosure or repossession -- among other things -- there is a need to file for Chapter 13 bankruptcy protections immediately. If you are in such a position, an emergency filing may be right for you.

How does an emergency filing work? An emergency filing can be submitted to court the same day or the next. The information provided in such a filing is minimal, but it is enough to achieve an automatic stay -- meaning creditors cannot continue the foreclosure process, seize any assets, attempt to collect on debts or contact you, among other things.

Emergency bankruptcy: it’s not too late to file

You and your family have been struggling with finances for a while. You are unable to make your credit card payments, creditors are constantly calling you and now your house is being threatened with foreclosure. The prospect of bankruptcy has concerned you for some time, but you could never bring yourself to file for it.

Now it looks like you may have turned your back on the one thing that could prevent foreclosure. But did you really? You may still be able to file for emergency bankruptcy.

Detailing the homestead exemption

One of the first questions that those who are contemplating filing for Chapter 7 bankruptcy in DuPage County may have is whether or not they will lose their homes. For most people, their homes are their most valuable assets. Thus, their concerns over whether or not that asset might be liquidated to repay creditors as part of a Chapter 7 case may be well-founded. However, allowances are made for people filing for bankruptcy to protect their interests in certain assets. Perhaps the most well-known is the homestead exemption. 

The homestead exemption lets bankruptcy filers exempt a certain portion of the equity they hold in their homes from a bankruptcy case. An example would be one who owns a home worth $300,000. He or she currenty owes $280,000 on a mortgage, meaning he or she has $20,000 in equity. If the homestead exemption is $25,000, then the home is protected. Yet if it is only $10,000, the home will be sold, and the owner will recieve the exemption amount of $10,000. 

Removing "estate" from estate planning and probate

Ask many Illinois residents about their estate planning efforts, and the answer is likely to be a laugh and a shrug. Many people are under the impression that unless they have a massive base of wealth, they have no need for estate planning and probate. That approach, however, is flawed, and fails to consider the many benefits of having a comprehensive estate plan.

The components of a basic estate plan are fairly standard, but how those documents are drafted makes all the difference. Most people begin with a basic will, which outlines how their property is to be distributed in the event of death. A will can be very basic, with most assets being passed to one individual, or very detailed, with a list of individual belongings for multiple heirs.

Assistance with estate planning and probate may prevent trouble

Following the death of a loved one, family members may be pleasantly surprised to learn that the departed has left them a significant inheritance. For those in Illinois who are struggling financially, any asset gained has the potential to change the direction of their lives. However, one family in another state learned that without legal guidance, estate planning and probate may have unintended results.

A man and his three children inherited a house from the man's grandmother. The deceased woman had lived in the home for years and had paid off the mortgage, but the house was in considerable disrepair. The family, having fallen on hard times, was delighted to inherit the house of their beloved grandmother. They set to work making the needed repairs, investing time, money and tremendous physical effort to replace plumbing, replaster walls and make other improvements.

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