In a chapter 7 bankruptcy, you are required to give the trustee unprotected property that you owned at the time of filing. So before you file for bankruptcy, it’s wise to limit the value of your unprotected property with some advanced planning.
The most common assets trustees look for include:
(1) cash,
(2) bank accounts,
(3) landlord and utility deposits,
(4) tax refunds,
(5) sporting goods.
By reducing the value of these assets, you are not cheating or acting illegally; you are simply using the law to your advantage, much like using tax laws to determine the best time to sell property.
Cash. No cash on hand before filing a chapter 7 bankruptcy is the best way to go. Further, if you have received cash or a paycheck or closed a bank account shortly before filing your case, you should use those funds before filing your bankruptcy. You should use those funds for valid purposes and keep receipts so you can prove the funds were properly used.
Money that you have before filing your chapter 7 bankruptcy may be used for (1) food, (2) groceries, (3) the chapter 7 filing fee, (4) the attorney’s fee in the chapter 7 case, and (5) the payment to creditors whose claims you intend to reaffirm and continue paying after filing bankruptcy.
You can also make your annual IRA contribution or to any other exempt pension plans, they are generally protected. Use cash or other liquid assets to pay off debts that will not be dischargeable, such as taxes. You may take out a life insurance policy, which will be exempt. Do not make gifts or loans to friends or relatives, however, because the trustee may later seize these payments.
Bank Accounts. All bank accounts should be closed before filing a chapter 7 bankruptcy. If a bank account is not closed, the account balance should be as close to zero as the bank allows and all outstanding checks must clear the account before the bankruptcy is filed. Un-cashed checks could be deemed an asset to be paid to the trustee.
Landlord and Utility Deposits. Unless these deposits are exempt, you should try to get a refund of all landlord and utility deposits before filing your chapter 7 bankruptcy. Otherwise, you may have to turn the funds over to the trustee.
Tax Refunds. If you expect a tax refund, you should file your chapter 7 case after you receive and properly spend your refund. The best strategy is to either file the chapter 7 case early in the tax year (but after the refund from the previous year has been received and spent) or make arrangements to insure that there will be no tax refund for that year.
Sporting Goods. Items that are uniquely valuable like guns, fishing gear, skis, cameras, and similar items should be disposed of before filing. Otherwise, you may have to turn over the items -- or their value in cash -- to the trustee.
If you want more information about bankruptcy and non-bankruptcy options, talk with an experienced financial rescue and bankruptcy lawyer.
You’re Invited to Call or E-mail.
“If you have questions about bankruptcy, foreclosure, credit card debt, loan modifications,
tax liens or other financial problems, please send your e-mail today to
rich@chicagomoneylawyer.com or call 312-969-0730.” -- Rich
RICHARD FONFRIAS, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Money problems solved. Peace of mind protected.
Founder & Managing Partner
FONFRIAS LAW GROUP, LLC
First National Plaza 70 West Madison Street, Suite 1400 Chicago, Illinois 60602
Telephone 312-969-0730 Facsimile 312-624-7954 www.chicagomoneylawyer.com
E-mail rich@chicagomoneylawyer.com
Wednesday, December 16, 2009
Wednesday, December 2, 2009
Should I Hire a Lawyer to Handle My Bankruptcy?
The answer depends on the type of bankruptcy best suited for you -- and how important it is that you do everything correctly the first time.
Bankruptcy laws are federal laws. Your bankruptcy will take place in Bankruptcy Court, which is a division of the U.S. Federal District Court.
Our legal system has 6 types of bankruptcies, some for consumers and others for businesses.
Consumers usually file either Chapter 7 or Chapter 13 bankruptcy. To decide which is better for you, you need to know and understand the bankruptcy laws and the important differences between the two.
If you decide to file Chapter 7 Bankruptcy (liquidation), you need to complete the mountain of paperwork required by the Bankruptcy Court. In this paperwork, you need to list your assets (your property) and your liabilities (your debts) -- and identify the property that is exempt, which the law allows you to keep.
If you decide to file Chapter 13 Bankruptcy (repayment), you need to fill out a ton of paperwork -- negotiate with your creditors -- work with the Chapter 13 Trustee -- and draw up a plan describing how you intend to repay your creditors. Then your repayment plan must be approved by the Bankruptcy Court.
If you make mistakes on the Chapter 7 or Chapter 13 forms, the Bankruptcy Court will reject your bankruptcy and send you back to square one.
As you can see, regardless of whether you want to erase your bills or set up a repayment plan, hiring an experienced bankruptcy lawyer is a smart decision.
Note: If you have very little property, you may be able to file a Chapter 7 Bankruptcy without hiring a lawyer. This may sound attractive because you’d like to save the attorney’s fee. But if you make a mistake and the Bankruptcy Court rejects your application, you’ll quickly see that trying to handle your own bankruptcy was a mistake.
Even worse, if you list “exempt property” that the law does not allow -- or if the Bankruptcy Trustee takes assets to settle debts with your creditors -- or if you choose the wrong type of bankruptcy and lose the equity in your home -- you’ll wish you had a bankruptcy lawyer representing you.
Now, good news: Most bankruptcy lawyers will talk with you without charge. Don’t try to make these important and difficult decisions on your own. Talking with an experienced bankruptcy lawyer is the best way to protect your property, erase your debts and get the fresh start you want and deserve.
You’re Invited to Call or E-mail.
“If you have questions about bankruptcy, foreclosure, credit card debt, loan modifications,
tax liens or other financial problems, please send your e-mail today to
rich@chicagomoneylawyer.com or call 312-969-0730.” -- Rich
RICHARD FONFRIAS, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Money problems solved. Peace of mind protected.
Founder & Managing Partner
FONFRIAS LAW GROUP, LLC
First National Plaza 70 West Madison Street, Suite 1400 Chicago, Illinois 60602
Telephone 312-969-0730 Facsimile 312-624-7954 www.chicagomoneylawyer.com
e-mail: rich@chicagomoneylawyer.com
Bankruptcy laws are federal laws. Your bankruptcy will take place in Bankruptcy Court, which is a division of the U.S. Federal District Court.
Our legal system has 6 types of bankruptcies, some for consumers and others for businesses.
Consumers usually file either Chapter 7 or Chapter 13 bankruptcy. To decide which is better for you, you need to know and understand the bankruptcy laws and the important differences between the two.
If you decide to file Chapter 7 Bankruptcy (liquidation), you need to complete the mountain of paperwork required by the Bankruptcy Court. In this paperwork, you need to list your assets (your property) and your liabilities (your debts) -- and identify the property that is exempt, which the law allows you to keep.
If you decide to file Chapter 13 Bankruptcy (repayment), you need to fill out a ton of paperwork -- negotiate with your creditors -- work with the Chapter 13 Trustee -- and draw up a plan describing how you intend to repay your creditors. Then your repayment plan must be approved by the Bankruptcy Court.
If you make mistakes on the Chapter 7 or Chapter 13 forms, the Bankruptcy Court will reject your bankruptcy and send you back to square one.
As you can see, regardless of whether you want to erase your bills or set up a repayment plan, hiring an experienced bankruptcy lawyer is a smart decision.
Note: If you have very little property, you may be able to file a Chapter 7 Bankruptcy without hiring a lawyer. This may sound attractive because you’d like to save the attorney’s fee. But if you make a mistake and the Bankruptcy Court rejects your application, you’ll quickly see that trying to handle your own bankruptcy was a mistake.
Even worse, if you list “exempt property” that the law does not allow -- or if the Bankruptcy Trustee takes assets to settle debts with your creditors -- or if you choose the wrong type of bankruptcy and lose the equity in your home -- you’ll wish you had a bankruptcy lawyer representing you.
Now, good news: Most bankruptcy lawyers will talk with you without charge. Don’t try to make these important and difficult decisions on your own. Talking with an experienced bankruptcy lawyer is the best way to protect your property, erase your debts and get the fresh start you want and deserve.
You’re Invited to Call or E-mail.
“If you have questions about bankruptcy, foreclosure, credit card debt, loan modifications,
tax liens or other financial problems, please send your e-mail today to
rich@chicagomoneylawyer.com or call 312-969-0730.” -- Rich
RICHARD FONFRIAS, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Money problems solved. Peace of mind protected.
Founder & Managing Partner
FONFRIAS LAW GROUP, LLC
First National Plaza 70 West Madison Street, Suite 1400 Chicago, Illinois 60602
Telephone 312-969-0730 Facsimile 312-624-7954 www.chicagomoneylawyer.com
e-mail: rich@chicagomoneylawyer.com
Credit Card Charges, Installment Loans & Medical Bills Cause Bankruptcies to Soar
It’s a nasty habit. Even an addiction. It costs a fortune. And it’s causing bankruptcies to skyrocket. What is it?
Buying things on credit, aka buying things “on time.”
Here’s what often happens. (Does the following sound familiar?)
You start charging things to your credit card. Month after month, the amount you owe increases. Your minimum payments get bigger and bigger. When you run out of cash each month, you use your credit card for living expenses. And your balances keep rising.
Your savings account bottoms out. Money you had planned to save now goes to credit card payments. You see that month after month you’re making payments on items you bought years ago! So that big-screen TV that you bought 3 years ago for $2,000 because it was “on sale” has already cost you $3,000, when you add the interest.
Now, where will you get the money to repair your car? For your son’s college tuition? Your daughter’s wedding? Or that special vacation you promised your spouse?
Interest -- whether on a credit card or an installment loan -- is expensive. It will cost you a fortune. For example:
With a balance of $3000 on one credit card at an interest rate of 19%, your monthly minimum payment of 2.5% of the balance with no other charges is $75. With only a minimum payment month after month, it will take you 283 months to pay off that one debt -- more than 23 years. For one card with a $3000 balance! And making just a minimum payment each month will cost you $4,729.44 in interest! Most Americans have 6-10 credit cards.
Credit purchases cause all sorts of problems: They choke the life out of the buyer until the item is paid off. They increase the cost of the item bought on credit. And they raise the amount of money needed to pay monthly bills.
The result?
Credit card debt and “on-time” installment purchases are causing bankruptcies to skyrocket. Because the debt has grown so big that the buyer can no longer pay it off.
If the buyer/debtor cannot work out an affordable plan to get out of debt, I suggest he consider Chapter 7 or Chapter 13 bankruptcy. Chapter 7 (liquidation) erases most of the person’s debt. And Chapter 13 (repayment) allows the debtor to negotiate a payment plan with creditors and then, with the Bankruptcy Court’s approval, start paying down his debt.
Another huge problem that forces bankruptcies is medical bills, which resulted in half of the 1,458,000 personal bankruptcies in 2001. (Study published in the journal Health Affairs.)
According to the study -- carried out by researchers at Harvard Law School and Harvard Medical School -- medical bankruptcies impact 2,000,000 Americans each year, including debtors and their families. And while over 75% of these families had health insurance when the illness began, 38% lost coverage -- some only temporarily -- by the time they filed bankruptcy.
Families that filed bankruptcy endured many hardships: 30% had at least one utility cut off. And when medical care was needed, 61% chose to go without.
The bankrupt families were mostly middle class. 56% owned a home and 56% attended college. Often, illness forced income-earners to take time off work, resulting in lost income and lost health-insurance benefits.
If you want more information about bankruptcy and non-bankruptcy options, talk with an experienced financial rescue and bankruptcy lawyer.
You’re Invited to Call or E-mail.
“If you have questions about bankruptcy, foreclosure, credit card debt, loan modifications,
tax liens or other financial problems, please send your e-mail today to
rich@chicagomoneylawyer.com or call 312-969-0730.” -- Rich
RICHARD FONFRIAS, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Money problems solved. Peace of mind protected.
Founder & Managing Partner
FONFRIAS LAW GROUP, LLC
First National Plaza 70 West Madison Street, Suite 1400 Chicago, Illinois 60602
Telephone 312-969-0730 Facsimile 312-624-7954
www.chicagomoneylawyer.com
e-mail: rich@chicagomoneylawyer.com
Buying things on credit, aka buying things “on time.”
Here’s what often happens. (Does the following sound familiar?)
You start charging things to your credit card. Month after month, the amount you owe increases. Your minimum payments get bigger and bigger. When you run out of cash each month, you use your credit card for living expenses. And your balances keep rising.
Your savings account bottoms out. Money you had planned to save now goes to credit card payments. You see that month after month you’re making payments on items you bought years ago! So that big-screen TV that you bought 3 years ago for $2,000 because it was “on sale” has already cost you $3,000, when you add the interest.
Now, where will you get the money to repair your car? For your son’s college tuition? Your daughter’s wedding? Or that special vacation you promised your spouse?
Interest -- whether on a credit card or an installment loan -- is expensive. It will cost you a fortune. For example:
With a balance of $3000 on one credit card at an interest rate of 19%, your monthly minimum payment of 2.5% of the balance with no other charges is $75. With only a minimum payment month after month, it will take you 283 months to pay off that one debt -- more than 23 years. For one card with a $3000 balance! And making just a minimum payment each month will cost you $4,729.44 in interest! Most Americans have 6-10 credit cards.
Credit purchases cause all sorts of problems: They choke the life out of the buyer until the item is paid off. They increase the cost of the item bought on credit. And they raise the amount of money needed to pay monthly bills.
The result?
Credit card debt and “on-time” installment purchases are causing bankruptcies to skyrocket. Because the debt has grown so big that the buyer can no longer pay it off.
If the buyer/debtor cannot work out an affordable plan to get out of debt, I suggest he consider Chapter 7 or Chapter 13 bankruptcy. Chapter 7 (liquidation) erases most of the person’s debt. And Chapter 13 (repayment) allows the debtor to negotiate a payment plan with creditors and then, with the Bankruptcy Court’s approval, start paying down his debt.
Another huge problem that forces bankruptcies is medical bills, which resulted in half of the 1,458,000 personal bankruptcies in 2001. (Study published in the journal Health Affairs.)
According to the study -- carried out by researchers at Harvard Law School and Harvard Medical School -- medical bankruptcies impact 2,000,000 Americans each year, including debtors and their families. And while over 75% of these families had health insurance when the illness began, 38% lost coverage -- some only temporarily -- by the time they filed bankruptcy.
Families that filed bankruptcy endured many hardships: 30% had at least one utility cut off. And when medical care was needed, 61% chose to go without.
The bankrupt families were mostly middle class. 56% owned a home and 56% attended college. Often, illness forced income-earners to take time off work, resulting in lost income and lost health-insurance benefits.
If you want more information about bankruptcy and non-bankruptcy options, talk with an experienced financial rescue and bankruptcy lawyer.
You’re Invited to Call or E-mail.
“If you have questions about bankruptcy, foreclosure, credit card debt, loan modifications,
tax liens or other financial problems, please send your e-mail today to
rich@chicagomoneylawyer.com or call 312-969-0730.” -- Rich
RICHARD FONFRIAS, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Money problems solved. Peace of mind protected.
Founder & Managing Partner
FONFRIAS LAW GROUP, LLC
First National Plaza 70 West Madison Street, Suite 1400 Chicago, Illinois 60602
Telephone 312-969-0730 Facsimile 312-624-7954
www.chicagomoneylawyer.com
e-mail: rich@chicagomoneylawyer.com
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