Law Offices of David P. Leibowitz LLC
Lakelaw is a registered assumed name for Law Offices of David P. Leibowitz LLC
So many of our bankruptcy clients fear losing their house to mortgage foreclosure. We have done a good job of teaching our clients that chapter 13 bankruptcy can save your home from mortgage foreclosure. You can catch up with payments you haven’t made to your mortgage company.
In Illinois, you can lose your house even if you’ve made every one of your mortgage payments? How can this be? If you don’t pay every cent of the taxes you are obligated to pay on your house, a tax purchaser can literally pay those taxes for you. Then you must pay back the tax purchaser through the county clerk with very hefty interest charges. If you don’t do this, the tax purchase may pay taxes on your house for you for several years after that. You may not even know that this is happening. At the end, the tax purchaser has the right to be paid in full with very high interest for the taxes paid on your behalf for all those years. You might not have enough money to pay these taxes back all at once. So the tax buyer then has the right to get a deed to your house – literally stealing it from you even if you have a great deal of equity. This frequently happens to older people or people not fully conversant in English. They simply don’t understand the complicated legal papers they receive about tax sales.
This is where Lakelaw comes to your rescue. You can file chapter 13 bankruptcy to save your house. You can pay back all those taxes, maybe with substantially reduced interest, over a period of up to five years. All you have to do is to file the chapter 13 case before the property “goes to deed.”
Bankruptcy Judge Janet Baer wrote a very important decision about this issue in the United States Bankruptcy Court for the Northern District of Illinois here in Chicago. These cases called Romious and Watts established the very important principal that a tax sale was more like a lien until the actual deed in favor of the tax purchaser was recorded. Because the tax sale position is so secure, the tax buyer has nothing to lose as long as the owner is making payments under the chapter 13 plan. You can find the Romius-Watts decision here:
So if you are facing a tax deed, don’t despair. Call David Leibowitz at Lakelaw, 847 249 9100 and get the help you need immediately.
If you are filing for bankruptcy, either under chapter 7 or chapter 13, your income matters. Why? People who make more than the median income – the income more than 1/2 of the people make – are presumed to be abusing the system if they file a bankruptcy under chapter 7. For an individual, that’s around $40,000 and for a family of 4 that’s around $80,000. It’s better for most people to file chapter 7 than chapter 13 because in chapter 7, you are done with your bankruptcy in 4 months. In chapter 13, you pay more fees and you make monthly payments to a chapter 13 trustee toward payment of your debts for 5 years. This can be a good deal if you are trying to save property or catch up with mortgage arrears. It’s not such a good deal if you have a very little non-exempt property which you might lose in a chapter 7.
When you make more than the median income, we have to figure out if you overcome the presumption of abuse. We do that by analyzing your income and expenses under the government’s Means Test as adopted by the Bankruptcy Code.
Many of our clients are married. Frequently, one person in a marriage has debt and needs to file for bankruptcy but the other does not. Then what happens?
It’s not all that simple.
We have to figure out your projected disposable income. To figure this out, we need to know not only what you make and what your expenses are, we also need to know what your spouse makes and what your spouse’s expenses are. That’s because anything your spouse makes beyond your spouse’s own separate expenses are deemed to be available to you as disposable income to allow you to pay some of your debts. This additional disposable income might make a difference in determining (a) whether you are eligible to file a case under chapter 7 or (b) how much you’ll have to pay as a monthly payment if you have to file a case under chapter 13.
It might seem unfair that your spouse’s income must be considered if you are filing a bankruptcy case and your spouse is not. But Congress has spoken and we must help you obey the rules.
The good news is that if you file a bankruptcy case and your spouse does not, your bankruptcy case has no adverse impact on your spouse’s personal credit.
It’s complicated when one spouse files for bankruptcy and the other does not. Lakelaw’s board certified bankruptcy attorneys have great experience with complex cases like yours. Count on us to help you when you have tricky bankruptcy questions. Call Lakelaw in Chicago or Waukegan at 847 249 9100 or in Milwaukee or Kenosha at 262 694 7300.
On January 15, 2014, the Seventh Circuit Court of Appeals held that a party, who is not a creditor and did not elect to bid at an auction sale, does not have standing to contest the approval of the sale. In re New Energy Corp., Case No. 13-2501 (Seventh Cir. January 15, 2014). New Energy Corp. (“Debtor”) operated an ethanol plant in South Bend, Indiana. After filing chapter 11 under the Bankruptcy Code, the Debtor proposed to sell most of its assets through a public auction. In order to post a bid and participate in the auction, a potential purchaser was required to post a bond of $250,000. The auction was held on January 31, 2013 and the winning bid of $2.5 million came from a joint venture of Maynards Industries (1991) Inc. and Biditup Auctions Worldwide, Inc. The Debtor, along with the U.S. Trustee’s Office, on behalf of the Debtor’s creditors, and the Department of Energy (the largest single creditor), asked the bankruptcy court to confirm the sale.
Natural Chem Holdings, (“Natural Chem”), was not a creditor and did not post the bond per the Debtor’s bid procedures. Natural Chem opted to not post a bond because, under the terms of the auction, if it had been the high bidder and not come up with at least $3 million as soon as the sale was approved, the bond would have been forfeited as partial compensation for the creditors’ losses from delay and the need to re-run the auction. Natural Chem opposed confirmation of the sale, as it wanted to lease the plant for a year with an option to buy it for $4 million or more. Natural Chem’s proposal was incompatible with the cash-up-front structure of the proposed auction.
Natural Chem asserted the joint venture amounted to collusion between bidders that spoiled the true nature of the auction sale process. The bankruptcy court overruled Natural Chem’s objection. Natural Chem did not seek a stay in the bankruptcy court, so the sale closed. On appeal to the district court, Natural Chem argued, pursuant to section 363(n) of the Bankruptcy Code, that “the sale price was controlled by an agreement among potential bidders at a sale.”
This is a serious allegation. Section 363(n) provides that there must be an agreement, among potential bidders, that controlled the price at bidding. Boyer v. Gildea, 475 B.R. 657, 662 (N.D. Ind. 2012). If collusion is found a sale may be avoided, or the Debtor (or party brining the motion) may recover consequential damages, costs, attorneys’ fees and punitive damages. 11 U.S.C. §363(n). Also, the parties found liable for collusion could also be criminally prosecuted under certain provisions of title 18 of the U.S. Code. Id.
The district court affirmed the bankruptcy court, and provided that only the trustee can assert an objection to an auction sale premised upon section 363(n). Section 363(n) specifically states that a “trustee” has the power to void a §363(b) sale. Natural Chem then filed an appeal to the Seventh Circuit.
The Seventh Circuit upheld the bankruptcy court’s determination. Here, Natural Chem did not preserve its right to object. Further, it confused why collusion among bidders is forbidden. Judge Easterbrook provides, “collusion is a form of monopsony that depresses the price realized at auctions.” Collusion by two bidders would have depressed the price at auction, and made Natural Chem’s offer more attractive – assuming it posted a bond. Simply, a reduction in the high bid would have harmed the Debtor’s creditors, not Natural Chem. This is the trustee (or potentially a creditors’ committee) would be correct party to protest a collusive sale.
Even if Natural Chem had standing to assert collusion under section 363(n), the agreement, or joint venture, between the bidders weighed against a finding of collusion. As with In re Edwards, 228 B.R. 552 (Bankr. E.D. Pa. 1998), the motivation of the collaborating parties is not always to control the price, but rather, can be an attempt to obtain a favorable settlement agreement. In this regard, the Seventh Circuit noted that “joint ventures have the potential to improve productivity as well as the potential to affect prices. . . .”
In short, Natural Chem chose to not play by the auction’s rules. That was its right – but, because it did not bid, it also was not harmed by the outcome. New Energy at p. 3. In order to preserve objections to an auction process, a party must bid, or otherwise be a creditor with standing to object to the proposed sale. While some courts take an expansive view as to the type of parties that can bring an action under §363(n) of the Bankruptcy Code, the Seventh Circuit did not endorse such a perspective. “[T]he trustee rather than the bidder is the right party to protest collusive sales.” Id. at 4. Natural Chem’s proposal that the Seventh Circuit disregard the plain reading, “runs smack into the Supreme Court’s insistence that judges implement the Bankruptcy Code as written, rather than make changes that they see as improvements.” Id. (citing RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S.Ct. 2065 (2012).
At Lakelaw, we have filed a joint bankruptcy petition for a same-sex couple. We had a couple we’ll call Daniel and Anthony. The couple married in a state that permits same-sex marriage, since their home state, Wisconsin, does not. Still, we filed the bankruptcy for them as a couple instead of filing separate bankruptcy petitions and consolidating (linking them together). Thus far, the case has been a success and has met no objection from the Chapter 13 Trustee or United States Trustee.
With news this weekend that the Attorney General of the US will recognize same-sex marriage and expand the benefits for lawful same-sex marriages nationwide (link to http://www.cnn.com/2014/02/08/politics/holder-same-sex-marriage-rights/), this process will soon be even easier for thousands of same-sex couples in marriages from around the nation. .
Illinois is one of the 16 states that already recognizes same-sex marriage. So a joint bankruptcy petition for a lawfully married couple regardless of their sexual orientation should not be a problem, as long as the couple meets the other requirements of the chapter of bankruptcy they seek. It’s a good idea to speak with an attorney before filing to discuss those requirements from the bankruptcy code.
We predict more states, even those like Wisconsin that do not recognize gay marriage, will see many more joint bankruptcy petitions from gay and lesbian married couples. The new threshold question won’t be “are you in a marriage defined as a man and a woman?” but “is your marriage ‘lawful’?” As more and more states permit same-sex marriage, the answer that question will more and more be yes.
The changes don’t just impact bankruptcy. The changes mean that spouses in same sex marriage get federal survivorship benefits and don’t have to testify against one another in a criminal trial. But one of the biggest impacts will be the ability to go hand-in-hand toward financial relief by filing bankruptcy together.
We filed a chapter 13 bankruptcy case for a couple we’ll call Larry and Laura. This allowed them to pay their debts off with one monthly payment over a period of 5 years. But things went south for them. Larry lost his job and one of them had to go to the hospital. The co-pays and deductibles were more than they could handle. They could no longer afford to make chapter 13 payments. But they still wanted to get out of debt. So we decided together to convert, or switch, their case to a Chapter 7 even though they weren’t eligible to file for chapter 7 when we first met them. That’s because they were making enough money back then that the Bankruptcy Code would call their case an “abuse” under the “means test”.
The US Trustee didn’t like Larry and Laura’s idea to discharge their debts in chapter 7. That’s because they used to afford a chapter 13 case and five years’ worth of payments. The US Trustee thought it was Larry’s fault he lost his job and that they couldn’t pay their hospital bills.
We help people file for bankruptcy in chapter 7 and for bankruptcy in chapter 13. We help individuals and married couples determine what kind of bankruptcy is right for them. If you are eligible for chapter 7, we help you file for immediate relief. If you are eligible for chapter 13, we help you figure out the lowest payment you are legally required to pay.
Whenever we file a bankruptcy, the Office of the United States Trustee, a part of the Justice Department, reviews the bankruptcy paperwork. What does the US Trustee’s office do? The US Trustee’s job acts as a gatekeeper and make sure that filers are entitled to a “discharge” of debts in bankruptcy. The office also reviews the “means test” and other schedules to see if Chapter 7 filers should be in Chapter 13. Sometimes, they believe someone doesn’t deserve a bankruptcy discharge and in even extreme cases, they will refer cases where people may have committed bankruptcy crimes to be prosecuted by a U.S. Attorney in federal court.
When the US Trustee objected to Larry and Laura “converting” their case from chapter 13 to chapter 7, Lakelaw went into action.
Lakelaw proved to the Milwaukee Bankruptcy Court that Larry and Laura lost income because Larry lost his job. Not only that, we established the hospitalization was something they didn’t want to happen. So even through their original income was very generous, it wasn’t enough to pay creditors now.
The Bankruptcy Judge agreed with Lakelaw, so Larry and Laura are now eligible to file for chapter 7 and get a prompt discharge of most of their debts. The US Trustee’s unreasonable position was defeated. We did this for Larry and Laura as part of our normal services. When you hire Lakelaw for your bankruptcy, we advocate for your interests from start to finish. Count on Lakelaw to stand up for you. The US Trustee acts to fight cases it thinks are wrong, but we fight for people who deserve a bankruptcy discharge. Call or e-mail us to tell you how we can fight for you.
It is a good idea to consult with an experienced Chicago bankruptcy attorney before acting. Bankruptcy is a big decision and can provide the financial freedom you desperately need. However, it should not be entered into lightly. Bankruptcy does require planning before you file your case
These are just a few of the mistakes that you should avoid before filing for bankruptcy. If you are considering bankruptcy, you should consult with a Waukegan bankruptcy attorney if you are thinking about filing for bankruptcy in Lake County, Illinois.
Sam and Sally were victims of payday loans in Wisconsin. The payday lenders were sucking large sums of money from their bank accounts every month. Lakelaw filed bankruptcy for Sam and Sally to stop the payday lenders. The automatic stay for bankruptcy in Wisconsin serves as a legal stop sign. If a creditor tries to collect a debt even after we file a chapter 7 case in Wisconsin or even a chapter 13 case in Wisconsin, Lakelaw can sue that creditor for damages and attorneys fees to make them stop.
Bankruptcy stops payday lenders from collecting. Bankruptcy stops payday lenders from taking money from peoples’ bank accounts. But Sam and Sally’s payday lenders ignored the law. They took money from Sam and Sally’s bank account after Lakelaw filed their bankruptcy. Sam and Sally got hit with bank fees and overdraft charges.
Lakelaw informs creditors after a bankruptcy filing our client has filed a bankruptcy case, whether under chapter 7 or chapter 13. This way, the creditor can’t complain they didn’t know about the case. If they keep collecting anyway, it’s a willful violation of the automatic stay. We also tell our clients to stop any automated withdrawals from their bank account. We frequently tell our clients to close their bank accounts and open new ones so the creditors can’t get their hands on their money.
Most honest creditors stop collection right after we file the bankruptcy case. But Lakelaw will sue and collect from those who insist on doing the wrong thing,
Creditors with no notice of filings might not be willingly ignoring the bankruptcy stay when they act, but if they get notice and still refuse to correct their behavior, a court can rule they were liable for their actions after getting the notice.
Lakelaw helps our clients recover money taken from them after filing, even if it means extra time on the phones and fax lines. It’s part of completely representing our clients from start to finish and providing them with true debt relief.
Lakelaw also protects people after bankruptcy taking advantage of consumer protection laws such the Fair Debt Collection Practices Act, the Telephone Collection Practices Act and by enforcing the discharge injunction. After a bankruptcy is complete, creditors can’t collect on claims which arose before the bankruptcy. Lakelaw insists that such creditors stop. And if they don’t we sue them and collect for our clients.
We also help our clients restore credit after bankruptcy by reviewing their credit reports and correcting errors.
When facing financial crisis, whether in Wisconsin or Illinois, let Lakelaw fight for you. Remember, Lakelaw is your financial life-saver ™. We help people with bankruptcy and foreclosure in Illinois and Wisconsin.
You want to file your bankruptcy case right now. Maybe you even found www.filenow.com. If you did, your lawyer has a problem. Your lawyer’s problem now is your problem. If your bankruptcy attorney has been disbarred, you may feel lost and abandoned. Perhaps you’ve paid a large fee. But a disbarred lawyer can’t file your Chicago bankruptcy case.
It’s not right to charge you more for legal services than you agreed to pay. A bankruptcy attorney must give you a contract which describes what he or she will do for you. And then he or she must perform these services. There should be no extra charges for your bankruptcy case unless you agreed to them in writing. And a bankruptcy lawyer in Chicago should handle all normal aspects of your chapter 7 bankruptcy from start to finish for the agreed upon flat fee.
For most chapter 13 cases in the Northern District of Illinois, you’ll sign a form contract called the “Court Approved Retention Agreement.” This is the only agreement allowed if your lawyer wants to receive a $4,000 flat fee for your chapter 13 case. There
can’t be any side deals or side agreements if your lawyer wants a $4,000 flat fee.
What can you do if your Chicago bankruptcy lawyer has been disbarred or convicted of a crime? You can find an ethical, competent, highly acclaimed Chicago bankruptcy attorney at Lakelaw. For example, David Leibowitz is board certified by the American Board of Certification as a consumer bankruptcy attorney and a business bankruptcy attorney even though this is not required to practice law in Illinois. He has been retained as an expert witness in legal malpractice cases concerning consumer bankruptcy. He chaired of the American Bankruptcy Institute’s Consumer Bankruptcy Committee for two years. Now he is coordinating editor of the Consumer Corner column of the American Bankruptcy Institute Law Journal. He has been selected to write on bankruptcy ethics by Bloomberg Law for its soon-to-be-published bankruptcy treatise.
If you have been victimized by a disbarred Chicago bankruptcy attorney, or an Chicago bankruptcy lawyer convicted of a crime, Lakelaw will take over your case at a reduced fee. And we’ll try to recover unearned fees for you too.
And as always, David Leibowitz will represent you with care, kindness, courtesy, respect, professionalism and dedication, just as he has for thousands of clients for almost 40 years.
Ask a businessman or attorney outside of Wisconsin about Chapter 128. They will probably shake their head or look confused. But ask Milwaukee bankruptcy attorneys or lenders in Wisconsin, and they can tell how Chapter 128 can be a blessing for debtors and lenders.
Chapter 128 contains two processes that are only found in Wisconsin. The first creates a receivership, with a party appointed (the receiver) to manage a business, sell its assets, pay the creditors, and ultimately liquidate the business or sell it outright. Like a bankruptcy, the filing creates an estate, the business’s assets and the right to receive funds. The receiver acts like a bankruptcy trustee and distributes payments to creditors based on the law’s order of distribution. Administration costs to run the estate; federal, state and local taxes; and employee wages get a higher rank than general creditors who are unsecured and have no liens.
The second process creates a receivership for individuals with incomes. This “amortization of debts” by “wage earners” works like a Chapter 13 bankruptcy, with payments made to a trustee and paid to creditors. But it is limited to 36 months (3 years) and only applies to some debts. For instance, we routinely file Chapter 128 plans to pay credit card debt, medical bills, payday loans, deficiencies for surrendered cars, and old utility bills. Our Milwaukee bankruptcy attorneys at Lake Law advise that this would not be an appropriate way to pay on a car loan or a mortgage.
Businesses: Creditors can apply to have a debtor company placed into the receivership involuntarily, meaning against their will. They may prefer this to a bankruptcy and get a receiver they trust to get a business under control before the principals sell assets off. Also, the process can be cheaper than a bankruptcy filing. It may be a win-win for everyone, especially if there are only a few major creditors. It provides an orderly way to wind down and save expensive costs of a lawsuit.
Individuals: For individuals, Milwaukee bankruptcy attorneys look for specific people to benefit from a Chapter 128. People who have repaid family members or friends over the last year and don’t wish to see that money returned to a trustee, people who have valuable assets they don’t want to surrender to the bankruptcy trustee for sale to the creditors, and people with little or no secured debt (or secured debts completely current) and willing to pay a monthly payment to only deal with specific creditors.
As an example, we recently filed a Chapter 128 for a debtor who had paid a relative back for a loan. That relative would probably have been sued by a bankruptcy trustee to get that money back. Also, she had valuable equity in a home and other possessions. She would not have been a good candidate for a Chapter 7, and would have probably paid too much in a Chapter 13 bankruptcy because of her equity. So our Milwaukee bankruptcy attorneys advised her to file a Chapter 128 and pay plan with the most important and pressing creditors.
Chapter 128s don’t work for everyone. They don’t protect the debtor from all creditors and not every creditor understands what a Chapter 128 is, since it isn’t a bankruptcy. But it is often cheaper and more orderly than a bankruptcy or any other attempt to smoothly liquidate a business. Talk to the Wisconsin attorneys at Lakelaw to see whether a Chapter 128 petition is right for you or your business.
Posted by Ryan Blay on August 16th, 2013 in Bankruptcy
You’ve been struggling with the mortgage on your commercial real estate or industrial building. Now the bank has started a foreclosure in Illinois. You’re in a state of shock as it is. Now the bank has filed an emergency motion in court to appoint a receiver. What does this mean? What can you do about it?
When you signed your mortgage on an apartment building, commercial or industrial real estate in Illinois, you also agreed that if you didn’t pay the bank what you were supposed to when due, the bank could start mortgage foreclosure proceedings. You also agreed that the bank could ask the court to appoint a receiver. In Illinois, the lender’s right to a receiver is just about absolute. The only defense you might have is that you are not in default and the lender doesn’t really have the right to foreclose. But the lender will get the benefit of the doubt. It is a good idea to consult with a Chicago foreclosure attorney to discuss your next move.
So who is a receiver?
A receiver must be qualified to take possession and to operate the real estate. Typically the receiver is a real estate professional with a track record as a property manager for the type of real estate he is taking over. A receiver of an apartment building is typically a property manager for apartments. A receiver for a shopping center might be a shopping center developer. A receiver for industrial property might be an industrial property expert.
What can a receiver do? What does a receivership mean to you?
A receiver must post a bond with the court. That’s because the receiver is acting for the benefit of all parties involved in the foreclosure, not just the bank. The receiver acts as an officer of the court. He must be honest. He must account for all rents collected and all expenditures made. So the bond protects all parties against any dishonesty by the receiver. The receiver can’t sell the property – that would be a short-cut to the mortgage foreclosure process, and if any actions to sell the property arise, it is imperative to contact a Chicago foreclosure attorney immediately. However, the receiver can collect rents, enter into leases, contract for the maintenance and repair of the real estate. A typical order appointing a receiver will specify exactly what the receiver can do without court authority. If the receiver wants to do something which is not within the authority granted in the order appointing him as a receiver, he will ask the court’s permission. A receiver will frequently employ an attorney to represent him in matters which come before the court.
Who pays the receiver?
The lender pays the receiver initially. However, all expenses for the receivership are added to the loan and become the borrower’s responsibility if the loan is “with recourse.” Even if the loan is “without recourse”, the expenses of the receivership are added to the loan and become additional indebtedness against the real estate.
Can a Chicago Foreclosure Attorney Help Me?
The bank wants a receiver because it does not trust the borrower to take care of the property itself. If you file a bankruptcy case in chapter 11, you can try to get the property back from the receiver. However, our Chicago foreclosure attorneys warn you that the lender and the receiver have the right to keep the property in the hands of the receiver even if you filed a chapter 11. So if you are worried about keeping the property out of the hands of a receiver and think you have a reasonable possibility of success in chapter 11, file your bankruptcy case before the receiver is appointed.
For more information about receiverships, foreclosures and chapter 11 bankruptcy, including real estate reorganization, single asset real estate and real estate bankruptcy contact the Chicago foreclosure attorneys David Leibowitz or Jonathan Brand at Lakelaw.