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The next letter in the Bankruptcy alphabet is P, and that represents Priority Tax debt.  What is priority?  That it is better than every other debt?  No, priority is a term of art in Bankruptcy, which refers to the order which creditors get paid.

 What is a Priority Tax debt?  It is a debt for income taxes that are less than 3 years old, and for other Federal and State taxes, such as corporate withholding taxes.   Priority debt is important because it generally is debt that cannot be discharged (eliminated) in either Chapter 7 or Chapter 13 Bankruptcy.  Other types of priority debt are child support arrears, business taxes, and criminal restitution.

 If you are in a Chapter 13 bankruptcy, these debts must be paid in full during the 5- year maximum term.  If you are in a Chapter 7 bankruptcy, and the trustee is selling an asset, the trustee uses the money to pay your debts.   It is important to have the priority debts paid because they can’t be eliminated.    So, priority debts are generally paid before other unsecured debts such as credit cards.   If you are in a Chapter 13, payment plan, type of bankruptcy case, the priority debts will get paid after secured debts such as mortgage arrears and car loans, but before other loans, credit cards, and medical debts.

 It is not always easy to tell which tax debts will be Priority and non-dischargeable, and which are non-priority, dischargeable debt.  When you consult with an attorney, you should bring in all of your Federal and State income tax returns for the last 4 years, and any correspondence from the IRS and any State taxing authority.  Then, you should  consult with an experienced Bankruptcy attorney to help explain your options, and what the attorney recommends. 

 The attorneys at the Law Offices of Daniel  J Winter are experienced in dealing with tax and priority debt issues in Bankruptcy.  Call us for more information.  We have offices in Chicago,Skokie,Waukegan, and Oak Lawn.

Daniel J. Winter

LAW OFFICES OF DANIEL J. WINTER

53W. Jackson Boulevard

Suite725

Chicago,IL60604

312-789-9999

BankruptcyLawChicago.com

djw@DWinterLaw.com

Other attorneys throughout the country contributing to the Bankruptcy Alphabet:

 

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Posted on May 7, 2012 by Daniel J. Winter, Esq.

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The next letter in the Bankruptcy Alphabet is O, which stands for Objections in Bankruptcy.  This is an important concept.  An objection is a lawsuit that someone else, usually a creditor who you owe, files in your case to contest your bankruptcy.  In some cases, the bankruptcy trustee could also file an objection.  I will describe the types of objections, and how often these objections may happen in bankruptcy cases.

Two types of objections are objections to dischargeability (of a single debt), and objections to discharge (of the whole case). 

Objection to Dischageabilty is called a Section 523 objection.  (for the section of the bankruptcy code) All creditors are given a limited amount of time (generally 60 days from the date of the meeting of creditors) to file an objection.  In order to object, a creditor has to file papers called a complaint, with the bankruptcy court, and send out notice of that complaint.  There are very specific rules on how to do this, and usually the creditor hires an attorney to do this.  There are also very limited reasons that a creditor can have to complaint objecting to the discharge of your debt to them.  Some of the reasons are if they allege you committed fraud by lying on your application for credit, or if you knew when you got the debt that you couldn’t pay the debt.  The creditor has to prove very specific things in order to be successful.  The allegations in the lawsuit have to be proven to the Bankruptcy Judge, and the Judge has to rule in their favor.  If the creditor is successful in the lawsuit, then their debt has to be paid, in spite of the bankruptcy, i.e., the debt is not discharged (eliminated).  If a complaint is filed, you need to be sure to have an experienced bankruptcy attorney represent you.

The other type of objection is an Objection to Discharge, or section 727 objection.  This is the “nuclear” option, where, if successful, it would deny a person’s  whole Discharge.  That would mean that the whole case would be denied.  This is a very difficult thing for a creditor to prove. But, it would mean that the debtor (the person who filed the bankruptcy case) hid assets or lied on his bankruptcy to such a degree that he or she was abusing the bankruptcy process, at least in the eyes of the Judge. 

 These types of objections, while they do happen, are not done in most cases.  Most cases, if done right, do not have these sorts of objections. The key is to be honest and forthright with your attorney.  That attorney should be experienced in bankruptcy law. And, if you are honest about everything, that attorney should be able to predict which creditors would be most likely to give you problems in your case.

 Again, these are very complex issues, best handled by an experienced bankruptcy attorney.  If you are honest with an experienced bankruptcy Attorney about your situation, you should steer clear of these types of objections.  The key, as in most bankruptcy situations is full disclosure and honesty in preparing your case.

 If you have questions about your specific situation, be sure to call an experienced bankruptcy attorney, such as the attorneys at the Law Offices of Daniel J. Winter.  We have offices inChicago,Oak Lawn,Skokie, andWaukeganto meet with you.

DANIEL J. WINTER

LAW OFFICES OF DANIEL J. WINTER

53W. Jackson Boulevard

Suite725

Chicago,IL60604

312-789-9999

BankruptcyLawChicago.com

djw@DWinterLaw.com

 

 

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Posted on April 29, 2012 by Daniel J. Winter, Esq.

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http://finance.yahoo.com/news/jailed-for–280–the-return-of-debtors–prisons.html

In Illinois, there are a few ways a creditor can pressure a person to pay. If you ignore certain court papers, you could be arrested. Be sure to call an experienced bankruptcy attorney for advice. The attorneys at the Law Offices of Daniel J Winter are available to give you advice, and help you navigate your situation. We have offices in Chicago, Oak Lawn, Skokie, and Waukegan, and offer free first appointments.

LAW OFFICES OF DANIEL J. WINTER
53 W. Jackson Boulevard
Suite 725
Chicago, IL 60604

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Posted on April 24, 2012 by Daniel J. Winter, Esq.

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The next letter in the Bankruptcy Alphabet is N, for No Assets.  This is a very important concept in a bankruptcy case.  In a Chapter 7, or full bankruptcy, case, the goal is to eliminate debts. In return, you provide the court with a list of all of your assets.  An asset for purposes of bankruptcy is anything in the world that you own. This could mean your refrigerator, house, car, or even your cat or dog!  Does this mean I’ll lose those things?  No!  What it means is that in order to petition the court for a Bankruptcy discharge to eliminate your debts, you have to let the court (and, in turn, those companies or people you owe money to) know  everything you own.  The good news is that everyone who files bankruptcy is allowed to protect a certain amount of assets with whatever their state allows (called exemptions).  For example, in Illinois, people are allowed to protect all of their clothes (whew!), $4,000.00 worth of any other personal property (called the “wild card”), $2,400.00 worth of equity in a car, and $15,000.00 worth of equity in a house (these days, not too many people have any equity in their homes!).  Equity is the current value minus the loan balance.  This is not all of the exemptions, just a sampling of some of them. 

 Then, after you list all of the things you own, your attorney files the list (called schedules) with the court. The court assigns a bankruptcy trustee to review all of the schedules.  Then, about 4-6 weeks later you go to a court hearing called “meeting of creditors” where the trustee asks a series of questions that you have to answer under an oath of truth.  The trustee has a job to try to find out if you, the debtor, has any non-exempt (not protected) assets that can be sold and used to pay creditors.  If the trustee is satisfied there is nothing valuable to sell, he or she will issue a report to the bankruptcy court saying there are “no assets” in your case.  This is the result you want, in most cases.  And, over 90% of all bankruptcy cases are “no-asset” cases.  The trustee may want more information before deciding, or, the trustee may want to send an appraiser to your property to see what the property is really worth.  But, in most cases, the trustee files the report, and then, a few months later, your case is closed, and the companies you owe (creditors) get nothing.

If there is a no-asset report, your case will most likely be successfully completed, and the court will issue a Discharge Order.  If the trustee, in that rare case, decides to sell some of your assets, you might get a Discharge Order, but the case would remain open for the trustee to sell the assets and pay your bills.

 It is important that you review all of your assets with an experienced bankruptcy attorney.  Most cases are “no-asset” cases and people are able to keep everything they own.   But much of how a case proceeds depends on full and complete honesty and disclosure of everything to your attorney.  If you live in Northern Illinois or Southern Wisconsin, call the Law Offices of Daniel J Winter for a free consultation.  We have offices in Chicago Loop, Skokie, Oak Lawn, Waukegan and Milwaukee, for your convenience.

 Daniel  J. Winter

Law Offices of Daniel J Winter

53W. Jackson Boulevard

Suite725

Chicago,IL60604

312-789-9999

Djw@DWinterLaw.com

 For posts of other Bankruptcy Attorneys throughout the country contributing to the Alphabet Game, N:

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Posted on April 21, 2012 by Daniel J. Winter, Esq.

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Bankruptcy Alphabet – M is for Mortgage Modification

 The next letter in the Bankruptcy Alphabet, M stands for Mortgage Modification.  A Modification is a way that a mortgage company can voluntarily change your mortgage terms, such as the interest rate, length of time to repay the loan, balance, and repayment terms.  Sounds great in theory.  But, in reality only a small percentage of loans are getting modified, or changed at all.   That is because the banks’ participation is voluntary, and, it is totally up to each lender as to whether they approve your loan for a modification.   There is no magic thing you can do, or person you can talk to.  The modification process is  either done through the bank or through the HAMP program (Home Affordable Modification Program).

 Here is how the process works:  You call your lender and request a loan modification application.  The lender sends the package to you to fill out.  You have to submit paperwork such as pay stubs and tax returns to them.  Be sure you get a return receipt if  you mail the documents.  If you fax them, print a fax confirmation.  The lenders often say they lose the documents.    Once the lender gets the documents, you have to wait to see if they approve you for a “trial period”.   If you get a trial period, the lender sometimes reduces the payment, and has you make payments for at least 3 months.  Then, at some point after you make the trial payments, the lender lets you know if you are approved. Some people have paid for 6 months or more.  After the trial period, you have to submit more documents to the lender.  Then, you might get approved for a “permanent” modification.  At that point, the lender will send you a package for you to sign. They would then record the final documents with your county recorder.

 In the whole process, you do not typically need an attorney, or other agency to do this work.  In fact, if someone guarantees that they will modify your loan, it is a scam. Nobody can guarantee a modification on a home loan.

 Do you need to be behind in your payments to get a modification? No!  You can still qualify for a modification even if you are current.  In fact, being current in your payments gives you many more options, and, if you fall behind in your payments, and don’t get a modification, you might have a hard time catching up in the payments and the mortgage company could foreclose on your home! 

 Does the loan modification process stop foreclosure?  No!  The lender can promise the world, and say what could happen.  But, in the meantime, they don’t have to stop any foreclosure that is going on in court. So, watch out. 

 What should you do if you are trying for a modification, but falling behind in your payments? Or were denied for a modification?  Call an experienced bankruptcy attorney.  You need to have all of your options available, because  if you make a wrong move, you could very easily lose your house.

 Call us if you have questions, or want to set up a free appointment.

 Daniel  J. Winter

LAW OFFICES OF DANIEL J. WINTER

53W. Jackson Boulevard

Suite725

Chicago,IL 60604

312-427-1613

Djw@DWinterLaw.com

BankruptcyLawChicago.com

 

For other articles on the Bankruptcy Alphabet:

 

 

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Posted on April 16, 2012 by Daniel J. Winter, Esq.

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The next concept in the Bankruptcy Alphabet is Lien.  What is a lien? Is it like “lean on me”? or  a lean cut of beef?  No, the legal term lien refers to a process that a debt collector can go through to be sure someone pays their debt.  The process of putting a lien on someone’s property (most often their house) can be done in two ways inIllinois. The first way is if, when you take out the loan, you sign something saying that you agree that they have a security interest in the item.  This is called a consensual lien.   A good example of this is is a car title loan.  The Bank lends you the money; in return, you agree to give them a lien on the title to the car.  Another way a creditor can get a lien on property is by using a court order and recording it with the county recorder.

Bankruptcy law treats creditors who have liens differently than other creditors. 
Creditors who have a lien are “secured creditors”.  In most cases, creditors’ liens are not affected by the bankruptcy.  So, if you have a home mortgage, it will survive the bankruptcy.  So you cannot file bankruptcy, keep your house, and not pay the mortgage.  Same thing goes for cars.  The key factor is when the lien is filed with the county recorder’s office.  To be effective, it must be filed before the bankruptcy case. 

There are some limited situations where a lien can be treated differently in a bankruptcy.  For example, in a Chapter 13 (payment plan type of bankruptcy), your attorney can try to “strip down” a second mortgage if the home value is less than the balance owed on a first mortgage.  If successful, the plan would pay the second mortgage  holder whatever percentage the other unsecured creditors are getting paid. 

The lien concept is a very complicated one.  It is important that you discuss these things with an experienced bankruptcy attorney who knows how to deal with liens in your bankruptcy case.  If you live inWisconsin or Illinois and have questions about your situation, call us.

Daniel  J. Winter

LAW OFFICES OF DANIEL J. WINTER

53W. Jackson Boulevard

Suite725

Chicago,IL 60604

312-789-9999

djw@DWinterLaw.com

BankruptcyLawChicago.com

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Posted on April 5, 2012 by Daniel J. Winter, Esq.

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The K in the Bankruptcy Alphabet stands for Keeping, as in keeping your house.  Most people who file for bankruptcy want to keep their house.  Even now, with house prices so much less than the balances owed on mortgages, people ideally want to keep their house.  So how does that work?  There are two pieces to the puzzle of whether you can keep a house in bankruptcy, equity and payments.

First, in a Chapter 7 (full, or debt elimination) bankruptcy, people are allowed to protect a certain amount of equity in a house they live in, depending on the state of their residence.  For example, in Illinois, people are allowed to protect or “keep” $15,0000.00 per person worth of equity in their house.  So if you are married, you’d get to protect $30,000.00.  Equity is calculated as the current market value of the house, minus the loan balances, minus costs of sale.  You can get an idea of the market value of your house by checking internet sources like www.zillow.com, or by calling a local realtor, or by looking in the local newspaper to see what homes in your neighborhood are selling for.  You can find your loan balance by looking at a recent mortgage statement.  Costs of sale are for things like realtors’ commissions, and closing costs.  (A rule of thumb is to estimate that at 10% of the total sale price).  For example, if your house, owned with your spouse, is worth $120,000.00, and you owe $80,000.00, costs of sale estimated at $12,0000.00,  the net equity would be 120-80-12=28,000.00.  Since 2 people are allowed $30,000.00 worth of equity, you would be able to keep your house if you currently live in the house inIllinois.

The second piece of the puzzle is payments.  In order to keep your house, generally, you need to be current in your mortgage payments.  There are programs from the government and certain lenders that give people who are behind in their payments possible ways to modify or change their loan to allow them to keep their house.  However, those programs have only helped a small percentage of homeowners, and you cannot count on getting help.  The only thing you can count on is this:  if you are up to date in your payments, you will keep your house out of foreclosure.  In a Chapter 7 bankruptcy case, if you are up to date in your payments, and, if you don’t have too much equity, as we discussed above, you’ll keep your house.

If you are behind in your payments, you do have a  way in bankruptcy court to keep your house, Chapter 13.  In this type of bankruptcy case, you would meet with your lawyer to develop a “Plan” to make your current payments each month, along with a Chapter 13 payment, which can be used to catch you up in your payments over 3 to 5 years. 

All of these concepts are very important, and you need to review them with an experienced Bankruptcy attorney.  Call us if you have questions  about your situation, so that we can help your house.

Daniel J. Winter

LAW OFFICES OF DANIEL J. WINTER

53 W. Jackson Boulevard, Suite 725

Chicago,IL60604

312-789-9999

djw@DWinterLaw.com

BankruptcyLawChicago.com

 

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Posted on March 23, 2012 by Daniel J. Winter, Esq.

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When people have a legal problem, the thing they fear the most (rightfully!) is going to Jail.  Over 100 years ago in England , there were “debtors’ prisons”, back in the time of Charles Dickens.  But, in modern American law, debtors’ prisons have been abolished.  So, you cannot go to jail just for not paying your bills. 

That doesn’t stop bill collectors from jumping on peoples’ fears, just to try to squeeze more money out of them, so their company gets money.  Many bill collectors will mention the threat of Jail just to scare people.  So I get plenty of clients who still come to my office with that fear.

But, that’s not to say that going to Jail is impossible.  In Illinois, after creditors (companies you owe money to) sue someone and get a judgment (a court order saying that they are entitled to a certain amount of money), those creditors can try to enforce their judgment.  One of the things that they can do is serve a “Citation to Discover Assets”.  Once you get one of these documents, you are required to go to court, and tell the Judge and the creditor’s attorney where you work, where you bank, and everything about your financial situation.  This is so they can start to garnish your wages or sieze your bank account.  When you get one of these documents (or any court document for that matter), you need experienced legal advice.  Because, if you don’t go to the court hearing, you CAN be arrested and go to Jail.

The moral of the story is that you won’t go to jail just for not paying your bills, but, you need to be careful and pay attention to the legal documents you get along the way, and call an experienced bankruptcy attorney.   Call us if you have any questions, or need to know what to do in your situation.

 

Daniel J. Winter

LAW OFFICES OF DANIEL J WINTER

53 W. Jackson Boulevard

Suite 725

Chicago, IL 60604

312-789-9999

djw@DWinterLaw.com

BankruptcyLawChicago.com

 

Other Bankruptcy Lawyers from around the country are also writing their J in the Bankruptcy Alphabet:

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Posted on March 12, 2012 by Daniel J. Winter, Esq.

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You may ask, what do intentions have to do with Bankruptcy?  In every Chapter 7 bankruptcy case, you need to file a “Statement of Intentions” with the court.  This statement is to tell the court, and your creditors what you intend on doing with your secured debts (like house and car loans).  There are many rules on when you need to “carry out” these intentions, but the bottom line is that you need to make at least a decision when you file your case about what you want to do with your house or car, or furniture.  If you don’t  do what you say on the statement of intentions within a certain amount of time, the auto finance company may be able to repossess your vehicle!

 It is not automatic that when you file a Bankruptcy case that you  lose your  house or car.  When you speak to an experienced bankruptcy attorney, that attorney will give you options, such as keeping or surrendering (giving up) the thing.  By the time you leave my office after your first meeting, you’ll know what your options are.  Then, by the time you file your bankruptcy case, you will have to sign the “Statement of Intentions” for your attorney to file with the court.

 Once your Bankruptcy case is filed, the court sends out a notice to every company you owe.  So when your car finance company or mortgage company gets the notice, they can look at your court filing to see what you want to do with your house or car. 

 You have some choices:  You can keep and pay for the item, and sign a document called a reaffirmation agreement.  The reaffirmation agreement is like a new contract, so that, if you don’t pay later but have signed the agreement, the company can take the item and sue you.  Or, you could try to keep the item and just pay for it without signing the agreement.  Some car finance companies allow this, but most do not.  In the case of mortgages, usually, clients just keep making payments, and, if they are current, they will be able to keep their home.  The third option is to surrender the item, that is, give it back, and owe nothing further.

These are important decisions.  You should consult with an experienced bankruptcy attorney before stating your intentions in a bankruptcy cases.

Daniel J. Winter

LAW OFFICES OF DANIEL J. WINTER

53W. Jackson Boulevard

Suite725

Chicago,IL60604

312-789-9999

www.BankruptcyLawChicago.com

djw@DWinterLaw.com

 

 

For more Banrkuptcy terminology in the Bankruptcy Alphabet, see my colleagues throughout the country and their blogs

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Posted on February 25, 2012 by Daniel J. Winter, Esq.

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Here is the latest summary of the “big” foreclosure settlement from the foreclosure abuses by the banks, robo-signing documents and creating fraudulent documents:  You may be entitled to some money (maybe $2,000.00) if your house was already foreclosed on.   If so, you’ll get some forms to fill out.  The government settlement may allow you to get some money knocked off of your mortgage, but there are very strict rules.  We won’t know for 6 months or more exactly who will qualify.  And, if your mortgage is held by the government agencies Fannie Mae or Freddie Mac, you won’t qualify.  The settlement may help homeowners who are current in their loans refinance at a lower rate.

There will be more details to follow, but don’t count on much in terms of direct relief.  If you have specific questions about how to deal with your home mortgage, call us.

Daniel J. Winter

LAW OFFICES OF DANIEL J WINTER

53 W. Jackson Boulevard–Suite 725

Chicago, IL  60604

djw@DWinterLaw.com

Www.BankruptcyLawChicago.com

 

 

 

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Posted on February 10, 2012 by Daniel J. Winter, Esq.