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How to File for Bankruptcy When You Can’t Afford an Attorney

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While many bankruptcy issues involve significant complexity, not all cases require a bankruptcy attorney. A bankruptcy attorney is especially warranted when a case is complicated. Filing for bankruptcy, though not always easy, can be done even when you can’t afford an attorney.

What Does a Bankruptcy Attorney Do?

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Attorneys who specialize in bankruptcy cases provide sound legal advice throughout the process and inform clients about specific risks. Those filing for bankruptcy should know what to expect from a bankruptcy lawyer and determine if they can handle these tasks on their own.

Upon submitting necessary paperwork, such as income, assets and expenses, an attorney will present the information to the courts before an established deadline. Missing a bankruptcy deadline could result in a dismissal of the case or delay the entire process.

All debtors are required to attend hearings, known as the 341 meeting of creditors. A bankruptcy lawyer represents the client at these hearings. Types of common hearings include Chapter 13 confirmation hearing, Chapter 7 reaffirmation hearing, and motions filed by the debtor or creditors.

When the debtor earns an income that is above the state median, owns a business or has significant assets, hiring a lawyer is advised. Situations like these complicate the case, and the debtor risks facing a lawsuit, his case dismissed in court or his assets seized and sold.

Complex bankruptcy cases occur when a debtor owns a small business, is involved in bankruptcy litigation, or files either a Chapter 13 or Chapter 7 case. In difficult cases, the abovementioned services provided by a bankruptcy lawyer are important to help the debtor reach his or her financial goals.

1. File Pro Se

A debtor can represent himself in court (aka pro se) in lieu of paying an attorney to do the same. However, circumstances determine if filing pro se is in the debtor’s best interests. A debtor must be willing to perform extensive research, have few assets and little income when filing.

A simple Chapter 7 bankruptcy case can be completed and discharged independent of an attorney. A pro se case may be successful if debtors comply with certain criteria, such as having a household income that is less than the state median; and, creditors must not allege fraud against the debtor.

The American Bankruptcy Institute offers innumerable bankruptcy resources. Debtors who visit the website learn about bankruptcy procedures, which is a critical step to proceeding with a pro se case properly, additional details about bankruptcy processes and information about the end of cases.

The Northern Illinois Bankruptcy Court, while posting local rules for filing pro se, recommends that debtors hire an attorney instead. Rules for filing are extremely technical. If handled improperly, the debtor may lose the right to file another case or lose protections in a subsequent case.

2. Get a Free Consultation

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A debtor who accepts a lawyer’s free consultation gains legal insight. Alternately, attorney fees can be paid through a Chapter 13 repayment plan. Remember, filing a Chapter 13 bankruptcy requires an understanding of extensive bankruptcy laws, necessitating the services of a lawyer.

Speaking with a lawyer can result in reduced attorney’s fees, especially if the debtor is low-income. A debtor may be able to negotiate a lesser fee with a lawyer and pay what is feasible. Debtors are also encouraged to obtain multiple quotes from various attorneys to compare fees.

3. Consider Legal Clinics

Upon failing to find a bankruptcy lawyer with acceptable fees or avoiding filing pro se, debtors might consider the services provided at free legal clinics or legal aid societies. These clinics have resources to serve the legal needs of low-income individuals.

Legal Aid Chicago works in partnership with volunteer attorneys to provide legal services to people throughout the city of Chicago. Free walk-in clinics are offered in various local areas. No appointment is necessary to speak to an attorney about legal issues.

4. Locate a Pro Bono Lawyer

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Every year, many attorneys accept a certain number of pro bono cases, which means the lawyer either provides legal services for free or at a significantly reduced rate. The Illinois State Bar Association or Chicago Bar Association have resources to find a pro bono lawyer.

Pro bono services may also be found from local organizations like the Legal Assistance Foundation of Metropolitan Chicago, the Chicago Volunteer Legal Services Foundation or Chicago Legal Clinic Pro Bono Program. Suburban programs include the DuPage Bar Legal Aid Service.

As mentioned, bankruptcy cases can be challenging to file on one’s own. Especially in Chapter 13 bankruptcy, debtors are required to complete a series of official paperwork and create a proposed repayment plan. The latter is difficult to complete without the pricey software attorneys use.

Be aware that the majority of Chapter 13 cases filed without legal representation are dismissed in court. Such cases are so complex that even some attorneys limit their practice to Chapter 7 bankruptcy. Debtors should strongly consider bringing on a lawyer when filing for bankruptcy.

Consult a Trusted Bankruptcy Attorney

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Filing a bankruptcy case without a lawyer requires heavy research into the law, attending hearings and filling out detailed paperwork. For many debtors, the process is time-consuming and too intimidating to handle independently. Instead, consult a bankruptcy lawyer from Berry K. Tucker & Associates, Ltd.

With over 50 years of combined experience and expertise in all facets of bankruptcy law, the attorneys at Berry K. Tucker & Associates, Ltd. will guide you through your bankruptcy process from start to finish. We evaluate your unique circumstances, offer beneficial legal advice and let you know your options.

Berry K. Tucker & Associates, Ltd. has successfully handled both Chapter 7 and Chapter 13 bankruptcy cases. Whether your situation involves car repossession, credit card debt or medical debt, we’ll represent your best financial interests in court. We’ll also help you set up a workable repayment plan.

Based in Oak Lawn, Illinois, Berry K. Tucker & Associates, Ltd. serves the bankruptcy needs of residents in the surrounding communities. Proceed prudently with your bankruptcy case by contacting a bankruptcy attorney from our reputable firm. We’ll help you navigate the complex bankruptcy process.

Get a Free Consultation

To schedule a free consultation with our bankruptcy attorneys in the Oak Lawn, IL area, please give us a call at (708) 425-9530.

Most Common Causes of Bankruptcy

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Keeping up with bills can be difficult, especially if you’re months behind. While deadline extensions are limited, there is another option that’s available: filing for bankruptcy. But before making any quick decisions, it’s important to speak with a bankruptcy attorney to make sure that it’s the right move for you.

When it comes to filing bankruptcy, Chapters 7 and 13 are among the most common.

Most Common Causes of Bankruptcy

1. Medical Debt

Due to the increase in medical care costs, it’s becoming increasingly harder for patients to keep up with their bills. In fact, much of this care has left Americans with additional costs they didn’t anticipate. According to a Harvard study, 62 percent of all bankruptcies have been spurred by medical debt.

2. Loss of IncomeMan-Pulling-Debt-Boulder-Rock

The second biggest cause of bankruptcy includes either a loss or significant decrease in income. As many as 22 percent of all cases are due to unemployment. Without the necessary funds, people will use their credit cards – often with high interest rates – to provide temporary relief. But long term, they are digging themselves into a deeper hole.

Aside from unemployment, decreased hours can still lead to other financial problems, like legal fees, divorce, student loans, mortgage, and any other large expenses. A bankruptcy attorney can also help to provide guidance out of debt.

3. Credit Card Debt, Mortgage, and Other Debts

Another common reason that Americans file for bankruptcy includes credit card debt, mortgage, and other major expenses. While it can create major financial problems, much of this is caused  by uncontrollable spending. It’s often the case that many credit unions and banks are too eager to lend out the money with the expectation that they would be paid back with high interest rates.

But credit card and mortgage debt is also a problem that can be relieved with the help of a bankruptcy attorney. However, it’s not common that many Americans seek the help of an attorney.

4. Legal Fees

Believe it or not, legal feels accounts for about 8 percent of bankruptcy cases. These fees can include anything from child support payments to alimony. The hard part is that these fees cannot be “written off” with bankruptcy, however, others can, which allows the filer to focus on paying these fees.

5. Natural Disasters

If you have ever experienced a tornado, fire, flood, or any other kind of disaster, you’ll know well that they are expensive. Especially if your homeowner’s insurance doesn’t cover the expense or you don’t have insurance, you’ll find yourself quickly buried in restoration bills.

On the other side, almost all homeowner’s insurance policies cover disaster cases. Just be ready to pay the deductible, which may also be significant, depending on your policy.

Least Common Causes of Bankruptcy

You may be surprised that these reasons even constitute for bankruptcy. But while they are rare, they still happen and it’s important to be aware of them.

1. Foreclosure

Many Americans love their home so much that they file for bankruptcy to prevent foreclosure. In the process, they can also alleviate some of their other debts so they can catch up on their mortgage payments. So in many cases filing for bankruptcy to alleviate multiple accounts of debt can be the best option.

2. No Structured Financial Plan

While the number of Americans that file for this reason is low, it includes those that have set no budget or boundaries for themselves. In these cases, uncontrollable spending will quickly send people into financial distress.

3. Utility Bills

You might be surprised but utility bills account for 1 percent of all bankruptcy cases, including electricity, gas, trash, and water. For bills so inexpensive, some people do not consider these a priority, thus, letting them pile up while they pay the minimum charge to keep everything running. For some, filing for bankruptcy can provide them with a “fresh start” to catch up on their living expenses.

4. Student Loans

With college tuition already sky high, it may seem shocking that only 1 percent of Americans file for bankruptcy. But the reason for this is because student loans cannot be discharged through bankruptcy (or else everyone would be doing it). On the other hand, few people do in order to eliminate or restructure other debts so they can catch up on their student loan payments.

5. Car Repossession

The last reason for bankruptcy includes the reason to avoid car repossession. With as many as 3 missed payments, the creditor can easily take the car away. But as soon as you file for bankruptcy, they must return your car as well as any other property that was taken.

Life After Bankruptcy

Filing for bankruptcy can feel like a failure at first, but afterwards, it can be such a relief to get rid of all that debt. Simply working with a bankruptcy attorney cannot only lead you to a “fresh start” long term, but also provide immediate relief like prevent foreclosure and repossession.

After all, you need a place to stay and means of transportation to work and pay for these expenses. So if you are worried that you might lose these things in the near future, filing for bankruptcy can stop this process, even allowing you to keep more than you think.

Work with a Bankruptcy Attorney

Financial turmoil is depressing and can easily lead to other problems like divorce due to arguments caused by financial distress. If you are contemplating declaring bankruptcy, be sure to speak with an experienced bankruptcy attorney to make sure that this is the right step for you.

If you live near the southwest Chicago, IL area, contact the attorneys at Berry K. Tucker & Associates, Ltd. Our attorneys are not only experienced but stay updated on all current laws. They have also worked in a number of diverse cases, you can feel comfortable as they guide you to make the best financial decision.lawyers-in-oak-lawn-il

When working with our bankruptcy attorneys, they will answer all of your questions, provide legal advice that is tailored to your unique situation, help filling out all documents, and provide deadline reminders.

Schedule a Consultation

To speak with an experienced bankruptcy attorney at Berry K. Tucker & Associates, Ltd., contact us directly at (708) 425-9530 or fill out a contact form. We will be in touch with you shortly!

How Bankruptcy Affects a Cosigner

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Major life events can trigger a bankruptcy. Divorce, illness, or losing a job may push people to the brink of financial ruin. Bankruptcy offers a strategic path out of financial disaster. Individuals, spouses and corporations can file for bankruptcy. Federal courts handle all bankruptcy cases in accordance with the US Bankruptcy Code.

Bankruptcy Classifications

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Bankruptcy falls into two primary classifications for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy. The former, Chapter 7 bankruptcy, wipes out certain debts completely, giving debtors the chance to start anew, without the burden of repaying debts.

Be aware that Chapter 7 bankruptcy discharges only certain forms of debt. Such debt includes medical bills, credit card balances, and personal loans. Non-dischargeable debt falls under such categories as income tax acquired over the past three years or more, student loan debt, and child or spousal support.

Chapter 13

Chapter 13 bankruptcy requires the debtor to repay a portion of the incurred debt. The debtor has an obligation to develop a repayment plan and to repay monetary dues over the course of 3 to 5 years. Factors that affect the minimum payment amounts include how much income is earned, the value of the individual’s nonexempt property and the sum of money owed.

Debt limits exist in Chapter 13 bankruptcy cases. Those eligible for filing for Chapter 13 bankruptcy cannot have over $1,081,400 (figure is as of 2018) in secured debt. Secured debts include any purchased items, like boats, houses and vehicles, that are linked to property.

The Role of the Cosigner

Qualifying for a loan may require a cosigner. The critical role of the cosigner is to repay any part of the debt that goes unpaid. First time borrowers, those with poor credit histories and people who are starting new businesses almost always experience obstacles when attempting to secure funding. Loans are acquired more readily when a cosigner signs the dotted line—giving the lender assurance that the loan will be repaid. Cosigners are those who earn higher incomes, who possess good credit and who own greater assets.

Unsecured loans are not associated with collateral, such as property. Examples of unsecured loans are credit card debt, personal loans, and student loans. Unsecured loans pose as a greater risk for lenders. The increased risk prompts the lender to require a cosigner prior to offering borrowers an unsecured loan.

In the unfortunate event a debtor must file for bankruptcy, the part of the cosigner comes in. Cosigners are just as affected by a bankruptcy as the debtor. A cosigner is legally the co-debtor and is responsible for repaying the debt as the borrower. Should the amount of debt owed exceed what a cosigner is able to repay, as in the worst scenario, the cosigner may also struggle with the decision to file for bankruptcy.

Cosigner Protection

Chapter 13 Bankruptcy—Codebtor Stay

A borrower can make efforts to protect a cosigner by filing for Chapter 13 bankruptcy. Cosigner debts are often discharged under Chapter 13 bankruptcy proceedings. Chapter 13 bankruptcy allows the debtor to repay the loan, thereby protecting the cosigner.

The Chapter 13 codebtor stay provides protection to the cosigner. Once bankruptcy is filed, creditors cannot take actions to recoup the loan. Simultaneously, a stay is also placed on the cosigner in a Chapter 13 bankruptcy filing. The codebtor stay prevents creditors from collecting from the cosigner. The cosigner is protected until the courts reach a final decision in the bankruptcy case.

Under certain circumstances, creditors can request the courts to lift the codebtor stay. Instances when a lender can request the courts to remove the codebtor stay include when the cosigner benefits from the debt instead of the creditor, when the creditor’s interests are harmed if the codebtor stay remains in effect and when the debtor, under the Chapter 13 bankruptcy repayment plan, fails to repay the debt.

Cosigners can qualify for a codebtor stay: The cosigner must be an individual, not a corporation; and, the debt for which a cosigner signed should be consumer debt and unrelated to business debt.

Failing to repay the debt under a Chapter 13 bankruptcy could jeopardize the cosigner’s protection under the codebtor stay, especially if the debt is not discharged. In such a case, the creditor has the right to pursue the outstanding debt from the cosigner.

Chapter 7 Bankruptcy—Repaying & Reaffirming Debt

When filing a Chapter 7 bankruptcy, all collections against the filer stop. Collectors, however, are free to collect the unpaid debts from the cosigner. A debtor can protect the cosigner by voluntarily paying off the debt in the event of a Chapter 7 discharge.

Reaffirming debt in a Chapter 7 bankruptcy also protects the cosigner. By once again becoming liable for the original debt before the debt is discharged, the cosigner can no longer be pursed for the money owed. Possessions such as jewelry, computers and furniture can be returned if the purchase cost remains unpaid.

Work with Bankruptcy Attorneys

In the unforeseen event you file for bankruptcy, either Chapter 7 or Chapter 13, make sure you are represented by highly qualified, experienced bankruptcy attorneys. Financial interests are heavily at stake. The bankruptcy attorneys at Berry K. Tucker & Associates, Ltd. are skilled negotiators, who will help you under numerous Chapter 7 bankruptcy scenarios, including vehicle repossession, medical debt, credit card debt, and home foreclosure judgements.

Our qualified team of bankruptcy lawyers will also see you through Chapter 13 bankruptcy cases, assisting you with developing a workable repayment plan.

Knowledgeable in all current Illinois laws surrounding bankruptcy, the attorneys at Berry K. Tucker & Associates, Ltd. will expertly guide you through the complicated bankruptcy process when you elect to file. Our team of bankruptcy lawyers offer professional, legal advice that will help you navigate the complex bankruptcy filing proceedings.

Schedule a Consultation

Berry K. Tucker & Associates, Ltd. is committed to serving the legal needs of individuals who are considering filing for bankruptcy and who reside in Oak Lawn, IL or its surrounding communities.

To schedule a consultation with one of our experienced attorneys, give us a call at (708) 425-9530.

Filing Bankruptcy to Prevent Foreclosure

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Filing for bankruptcy in order to save your home from foreclosure may sound too good to be true – but it’s not! Bankruptcy cannot only stop foreclosure threats, but end debt collector harassment, allowing borrowers extra time to make up for the missed payments and review their financial situation. For some situations, filing for bankruptcies can also help those who have mortgages save their homes completely.

What to Keep in Mind Before Filing for Bankruptcy

Filing for bankruptcy can prevent a home foreclosure but it is not the solution to all problems. Be sure to check out these conditions.

Just because bankruptcy can save homeowners from foreclosure, it is not the solution to all problems. The exception is that if the homeowner does not have enough money to make the payments, bankruptcy will not save them.

But for homeowners that have ongoing income and are able to make payments, filing bankruptcy would be an ideal solution.

Preventing Foreclosure

After filing bankruptcy, the first and most important step is to put the foreclosure process to a halt. Legally, lenders are not able to foreclose or even try to collect the debt from the borrower without the permission from the court.

Two Types of Bankruptcy

There are multiple chapters of bankruptcy, but Chapter 7 and 13 are among the most common.

Chapter 7. This type will delay the foreclosure process, but not prevent it. In most cases, most assets will be liquidated and almost always ends in the owner losing their home.

Despite this downside, some bankruptcy attorneys recommend Chapter 7 because it gets rid of all unsecured debt, leaving behind secured debt, such as mortgages. This allows homeowners to start with a clean slate, so they can then afford to pay other debts.

Chapter 13. Preferred by many professionals, this type of bankruptcy is more effective when it comes to allowing borrowers to keep their homes. They are given more time to review and fix their financial situation, around 3 – 5 years, while given an income-based budget to make monthly payments to trustees.

The trustees then use the money to pay bills, starting with the secured debt, then the unsecured debt, including credit cards and medical bills. But after this, there’s little to no cash left, so they are paid off at a low percentage of the full rate.

But as long as they keep up on their payments, borrowers are able to come back from bankruptcy and still keep their homes.

The Powers of the Courts

While the courts have significant power, they are not allowed to reduce the mortgage debt to the net worth of the home. They are also not able to lower interest rates or lengthen the term of the mortgage.

On the other hand, they can remove second mortgages, such as lines of credit or home equity loans, as long as the net worth of the home falls below the first mortgage balances.

For borrowers, this is a big relief. For example, a homeowner may have $300,000 balance on the first mortgage and $75,000 from the home equity loan. During the time that the homeowner was unable to make payments, the home’s value dropped below $300,000, the court may rule that the $75,000 is unsecured debt. This allows the home equity loan to be paid off at a significantly lower rate than the original $75,000.

Keep in mind there are other downsides. Filing for bankruptcy can knock off as much as 240 points from a credit score. They can also stay on the reports for 10 years, while other problems disappear after 7 years or less.

Tax Advantage During Bankruptcy

Yet another pro of filing for bankruptcy compared to undergoing foreclosure. If the home is foreclosed and the lender forgives the remaining balance of the mortgage above the market value, there is a tax liability. If there is a difference between what borrowers borrow and what they pay, it is considered income in the eyes of the court.

Although Congress is temporarily allowing this unpaid debt to be forgiven, this is only for the money that was specifically spent on the home; it doesn’t not cover any additions, remodeling, or improvements.

Free Money is Still Taxable

It’s common for homeowners to refinance mortgages and take out additional home equity loans to pay for other things, like college tuition, fancy vacations, and nice cars. But the kicker is that the money is still taxable.

In the case of foreclosures, say if a homeowner had purchased a home for $1 million but had taken out another loan for $2 million, most of which is not spent on the house, the money is taxable. But if the homeowner files for bankruptcy right afterwards, the deficiency is discharged. That’s the key.

Filing for Bankruptcy

While not for everyone, filing for bankruptcy has saved many American homeowners from losing their homes. As it provides them with a “fresh start,” they are able to focus their payments strictly on their mortgages.

But before filing, it is crucial to meet with a bankruptcy attorney to ensure that this is the best option for you. The last thing you will want to do is file and find out that you still have to undergo the foreclosure.

Simply meeting with an experienced bankruptcy attorney can provide a lot of relief to your situation. They can review your documents and options while discussing the best plan of action according to your specific situation.

When it comes to providing tailored solutions, the bankruptcy attorneys at Berry K. Tucker & Associates, Ltd. not only have years of experience, but have worked with

diverse cases. When meeting during the initial consultation, we will listen closely to each detail while applying our knowledge of updated laws in order to reach a solution that works in your best interest.Cheri-Costa-Family-Child-Custody-Attorney-Oak-Lawn-IL

Schedule Your Consultation

For more about filing bankruptcy or determining whether it is the best option for you, contact the bankruptcy attorneys at Berry K. Tucker & Associates, Ltd. at (708) 425-9530 to schedule your initial consultation. We proudly serve the residents Oak Lawn, IL and the surrounding areas.

Every Case is Unique

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Oak Lawn, IL 60453

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