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Monthly Archives: May 2009

How do I get my Wisconsin driver's license reinstated after bankruptcy

Posted by David Leibowitz on May 18th, 2009 in Uncategorized,

Wisconsin has an online system to help you reinstate your driver’s license after suspension or revocation.    

The requirements vary depending upon the reason for the revocation or suspension.  Here’s a page where you’ll find most situations and responses outlined.

If your operating privilege was suspended under the safety responsibility or damage judgment laws after April 9, 2001 you will also need to file proof of insurance (SR22 form) with the Department. Contact an insurance company licensed to do business in Wisconsin for the insurance form. Motor carrier insurance may be furnished for commercial motor vehicle operation.

After the suspension period is over, you can confirm that your fee has been received and your Wisconsin driving privilege is valid by calling (608) 264-7133 or checking your status online. You will need your Social Security number and date of birth to access this information.

If you are not a Wisconsin resident or perhaps moving to Wisconsin from another state, this information applies to you:

If you are an out-of-state resident, you are required to pay the reinstatement fee. Make checks payable to Registration Fee Trust and mail to the address below. Be sure to include your full name, date of birth, Social Security Number, and your current address.

Wisconsin Department of Transportation
Driver Information Section
4802 Sheboygan Avenue, Room 301
P.O. Box 7983
Madison, WI 53707-7983

After the suspension or revocation period is over, you can confirm that your $60 has been received or your Wisconsin driving privilege is valid by checking your driver’s license statusor by calling (608) 264-7133 (for a recorded message, 24 hours a day). You will need your Social Security number and date of birth to access this information.

 

For bankruptcy help in Kenosha and Racine Counties, call now Lakelaw at 262. 694 7300.


Can I get my Illinois driver's license back through bankruptcy?

Posted by David Leibowitz on May 18th, 2009 in Life After Bankruptcy

Cllients often ask – how can I get my driver’s license back after bankruptcy.  Thanks to our friends at the Legal Assistance Foundation of Chicago, we have answers for this and many other driver’s license related questions.

The Illinois Secretary of State will suspend your drivers’ license if you have an accident while uninsured.   The Illinois Safety Responsibility Law allows the Secretary of State to suspend your driver’s license if you do not have insurance and have been involved in a car accident that results in personal injury, death of any person, or greater than $500 in property damages.  The Secretary of State can suspend your driver’s license if you are uninsured and cannot guarentee of payment of the damages. Your driver’s license can also be suspended if you are sued, the judge awards the pther person a civil judgment against you, and you fail to pay the judgment.

 

Paying off the Judgment in full

If you choose to pay off the judgment in full, you must get a signed “Release and Satisfaction of Judgment” from the creditor’s attorney. The Release and Satisfaction of Judgment must be filed with the clerk of court that entered the judgment. When filing your Release with the Clerk, you need to request a certified copy for the Secretary of State. To get your driver’s license reinstated, you must deliver the following documents to your local Secretary of State’s office:

  • A certified copy of your Release and Satisfaction of Judgment
  • A completed SR-22 insurance verification form which you can obtain from your insurance company as proof that you are currently insured
  • Payment of at least a $70.00 reinstatement fee

Entering into a court ordered payment plan

You may agree to a payment plan to pay off the judgment over time. In order to reinstate your driver’s license, the payment plan must be entered as a court order that is signed by the judge. After the order is entered, it must be certified by the clerk in Room 601 of the Daley Center. A certified copy of the payment plan must then be delivered to your local Secretary of State’s office along with the SR-22 proof of insurance form and $70.00 re-instatement fee mentioned above. Be cautious about entering into a payment plan that you cannot afford. If you sign an agreement, and fail to make the payments on time, your license can be re-suspended.

Filing a Bankruptcy

You may file a Bankruptcy to discharge this judgment and other debts. Your license can only be reinstated after the bankruptcy has been completed and the judgment is discharged. You must deliver a certified copy of the Discharge in Bankruptcy (including a schedule naming the creditor) to your local Secretary of State’s office along with the SR-22 proof of insurance form and $70.00 reinstatement fee mentioned above. A bankruptcy cannot be accepted in alcohol-related cases that result in personal injury or death.

Prove the judgment was entered in error

If the judgment was entered against you in error, you must file a Motion to Vacate or Dismiss the judgment in the trial court. You should consult an attorney for assistance with this process.

Once an order vacating or dismissing the case is entered, you must take a certified copy of the order to the Secretary of State along with the SR-22 proof of insurance and $70.00 reinstatement fee.

Prove the Judgment is more than 7 years old

If your judgment is more than 7 years old, and has not been revived, your suspension can be removed. Go to Room 601 of the Daley Center and give the clerk your case number. The court will order your file. After the file is obtained, make a photocopy of the half sheet located inside the file and get the half sheet certified by the cashier. Go to the Secretary of State and present a copy of the half sheet. You will also have to provide SR-22 insurance from your insurance agency.

If you can’t afford the damages you will have to pay as a result of the uninsured accident, you may be forced to file a bankruptcy case.

If you do end up filing bankruptcy and need any help getting your license reinstated, please contact us and we’ll help you through the process.


What is cash collateral?

Posted by David Leibowitz on May 13th, 2009 in Chapter 11

When we file a chapter 11 case, one of the first questions our clients ask is whether they can use the cash they have in the bank and the cash they get when collecting their accounts receivable.

Usually, the client has a bank or other creditor which holds a lien on substantially all of their assets.  Property like inventory, machinery and equipment and the like is called “hard collateral”.  Such items can be used and sold in the ordinary course of business in chapter 11. 

Liquid assets, like cash, bank accounts, and accounts receivable, however, are a different matter.  These are called “cash collateral”.  And cash collateral may not be used over the objection of a secured party without a court order.  This order is called the “cash collateral order”.  Typically, in order to use cash collateral, the debtor must assure the creditor that the value of the collateral will not decline during the course of bankruptcy.  This is called “adequate protection”.  And in addition, if the creditor is fully secured, the creditor is entitled to interest for the use of collateral during bankruptcy.  The creditor is also entitled to attorneys fees to the extent provided by contract.  

Use of cash collateral in chapter 11 is typically conditioned upon following an agreed upon budget.  Any excess cash can be swept into an account for the benefit of the creditor to the extent necessary to provide the creditor with adequate protection.  The creditor can be given a replacement lien in post-petition accounts receivable to provide additional adequate protection for loss of pre-petition accounts receivable.

If there is debtor in possession financing, cash collateral issues can become more complicated.  But that is a topic for another entry at another time.

In the meantime, if you are a business debtor in chapter 11, don’t even think about using cash collateral without consent of the bank or a cash collateral order approved and entered by the Bankruptcy Court.

Watch for more information about chapter 11 and chapter 11 practice here at Lakelaw.


Can I pay back my mother before bankruptcy?

Posted by David Leibowitz on May 12th, 2009 in Bankruptcy procedures,

In bankruptcy, payments to family members within a year of bankruptcy can be a problem.  A trustee in bankruptcy can claw-back these payments by suing mom or dad.  The recovery is then divided equally among the creditors.

We just celebrated Mothers’ Day.  And of course, if our kids need help, they always feel like they can turn to Mom.  So it’s natural that when they can pay back Mom for a loan, the kids want to do what’s right.

In bankruptcy, Mom is an “insider”.  So is Dad.  So are Brother and Sister.  So are husband and wife.  So are children. And a lot of other family members.

Why do we care who’s an insider?

In bankruptcy, if you pay back an insider even for a legitimately owed debt within one year prior to bankruptcy, the trustee can sue your relative to recover the payment.  This is called recovery or claw-back of an insider preference.  We see a lot of this around tax refund time.  People recover their income tax refunds and use them to pay back mom or dad just before filing a bankruptcy case.  This is a problem.  If the trustee asks about it and finds out, the trustee will sue mom for the amount you paid her.  

So prior to bankruptcy, do contact us at Lakelaw.  We can advise you as to what you can do and what you can’t.


What is a reaffirmation agreement?

Posted by David Leibowitz on May 10th, 2009 in Bankruptcy procedures, BAPCPA, Chapter 13, Chapter 7,

If you are buying something on credit, like a car or a house, this is called a secured debt.  In bankruptcy, you need to make choices about your secured debt.  There are three options and maybe a fourth one too.  These are called:

  • Reaffirm or reaffirmation
  • Surrender
  • Redeem or redemption
  • “Pay and Retain” or “Ride-Through” – the 2005 bankruptcy law tried to abolish this but was not completely successful

Here’s a brief explanation of each one:

Reaffirmation:  In this instance, you, the debtor, agree to continue to pay the debt to the secured creditor, like GMAC or Ford Motor Credit.  In exchange, you keep your car and keep paying  your monthly payments just as you did in the past.  Sometimes, your bankruptcy lawyer can help you negotiate a better deal with the lender in order to persuade you to reaffirm the debt.  Maybe the lender will agree to do this because it is better off with you paying than it is for the lender to sell the car at a loss at auction.  If you don’t reaffirm a debt secured by a vehicle, you run the risk of having the car repossessed or taken away from you outside of bankruptcy.  This will almost certainly happen in Illinois and is likely to happen in Wisconsin too.  Laws do vary in other states.

If you decide to reaffirm, your lawyer needs to certify that you can afford to do so.  That’s why we charge a little extra for each reaffirmation agreement – we need to be sure we can give this certification taking into account your economic situation after bankruptcy.  Otherwise, you’d have to go to court to explain to the judge why you can still afford this secured debt.

Surrender:  Here, you decide that you can’t afford to keep a property securing the debt.  Maybe your car is too expensive, or not worth much compared to the loan.  Maybe it would pay you to give up the car and try to get another less expensive vehicle rather than keep paying on it.  In this case, you’d give up the car and be discharged from debt on the balance.  Surrender is often the right choice when you are deeply underwater or “upside-down” on your the mortgages on your house.

Redemption:  This is sometimes a good choice when you have a late model car which has substantially declined in value compared to the loan, especially when you have a high interest rate.  If you have the money, maybe from an IRA or even better, from a new loan, you can pay off the loan on your car for the present value of the car.  For example, if your car is worth $15,000 and the loan is $30,000, you can get a new loan for $15,000 and discharge the remaining $15,000 in your bankruptcy case.  This could result in a much lower payment for the balance of your loan.  Ask us about redemption.  We know how to do this – there’s an additional fee but in many cases, it’s worth it.

“Pay and Retain” or “Ride-Through” You can’t do this any more for personal property. However, we have found that you don’t have to reaffirm a debt secured by your house in order to keep paying it as normal.  This is a good option since you maintain your mortgage as normal, but no longer have personal liability in the event that you default in the future.  Ask us about this too.

Statement of Intention: One of the papers you’ll sign in your bankruptcy case is a “Statement of Intention”.  On this paper, you’ll tell your creditors whether you want to keep your property and keep paying on it, surrender the property and be discharged from the debt or redeem the property by paying the current balance.  Look this paper over carefully and make sure it’s correct

Some retail stores claim a security interest or lien in items like jewelry or computers.  If you have this situation, let us know.  We have some ideas which can help you.

Act on your intentions – Remember, you have to act on your intentions promptly, so when we send you a reaffirmation agreement, read it, make sure you agree with the terms, sign it and return it right away.  And call us if you have any questions about any aspect of a reaffirmation agreement.


Lakelaw Celebrates 10 Years of Service

Posted by David Leibowitz on May 2nd, 2009 in Uncategorized, , , ,

May 1, 2009, marks ten years since Lakelaw opened its doors.  We started in a tiny one room office in Waukegan.  Now, we have served thousands of clients in Illinois and Wisconsin with five offices from Chicago to Waukegan and from Kenosha to La Crosse.

We are proud of our people and the high quality of representation we have provided to our clients and communities. We also take pride in our clients – recognizing that as lawyers, we are only as good as our clients allow us to be.  Our clients entrust their lives and futures in us.  We take great pleasure in helping people resolve their financial difficulties and putting them on the road to success for the rest of their lives.

Today, Lakelaw is at the forefront of mortgage foreclosure defense.  We have offered seminars for attorneys in Wisconsin and Illinois.  Now, we are preparing a new seminar in our hometown – Waukegan – for attorneys in Lake County, under the auspices of the Lake County Bar Association.  This program will soon lead to a help desk at the Circuit Court for the Nineteenth Judicial Circuit in Lake County Illinois.

Lakelaw also is at the forefront of consumer bankruptcy.  We publish in blogs and journals.  We speak at conferences nationwide.  We innovate.  We seek to be at the cutting edge of our practice.  And we share our best practices with others.

We at Lakelaw look forward to serving our clients in Illinois and Wisconsin for many years to come and we thank our clients, referral sources and friends for all of their suppport during the past ten years.


I am paying 100% in my chapter 13? Must I pay 100% of my disposable income?

Posted by David Leibowitz on May 1st, 2009 in Chapter 13, , , , ,

If you are paying 100% to your creditors in a chapter 13 case, you can take up to 60 months to do so – even if you aren’t paying 100% of your disposable income every month.

Lakelaw just won a case in Rockford, in the Western Division of the Northenr District of Illinois, proving this point for our client.  

For years, the experienced and able  Chapter 13 trustee in Rockford had been taking the position that a debtor had to pay 100% of disposable income to her every month, even if it would result in a chapter 13 plan being paid in full in less than 60 months.  It was her belief that debtors were acting in bad faith if they wanted to be fair to their families as well as to their creditors. From this trustee’s point of view, it was more important for the creditors to be paid quickly than it was that the creditors were being paid in full over the term of the plan.

However, the Bankruptcy Code provides that the debtor in a chapter 13 must pay all of his or her disposable income to a chapter 13 trustee only if the plan pays less than 100% to creditors.  If a plan pays creditors in full, the requirement that debtor pay 100% of disposable income does not apply.

Judge Barbosa had the courage and wisdom to reconsider his prior views on this issue in light of the plain language of the statute as well as recent precedent in other jurisdictions.  Debtors throughout Northern Illinois, from Woodstock to Galena and all points in between will benefit from this new precedent and the clarity of thought Judge Barbosa demonstrated from the bench.

Lakelaw went to the mat for our clients before Judge Barbosa and against the Chapter 13 trustee.  And we’ll go to the mat for you too.  In the meantime, we hope that the Rockford trustee will post Judge Barbosa’s decision on her recent decisions page so that everyone in the Northern District of Illinois, Western Division, will become aware of Judge Barbosa’s new ruling.


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