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.
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.
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.
As an attorney who’s been practicing in consumer bankruptcy for five years now (in Illinois and Wisconsin), it’s heartbreaking and frustrating to see the huge amount of lies and misinformation about bankruptcy.
Some of these mistakes come from gossip or bad experiences in bankruptcy (including lying, bad attorneys, or other frustrations). Others come from rumors spread by the financial services industry to try to keep people out of bankruptcy (even though lenders can write off the uncollectable debt and take a tax break for it). Even worse are errors from hacks – er, attorneys/writers – who blatantly skew statistics and facts about bankruptcy filings for their own purposes. We can assure you that while nothing is ever certain with the law, the overwhelming majority of bankruptcies are successful, peaceful, and bring financial relief to our clients.
Here are some common statements about bankruptcy and the truth.
Statement 1: Why not just settle debt? It’ll be better for your credit report and you won’t have to pay a lawyer to settle debts for 40-50 cents on the dollar.
Answer: If your sole major debt is a $4,000 credit card and you can afford to pay a lump sum of $2,000, a credit card company may take it and waive the rest. To do so, you’ll have to show you have a serious hardship (not just because you don’t feel like paying) and submit financial records to prove it. You’ll also have to come up with a lump sum or a few significant payments, not a long term payment plan. Unless you’re insolvent, you’ll have to pay tax on the forgiven debt. But in the situation above, that’s fine because bankruptcy’s costs for a lawyer and the filing fees would make a bankruptcy unnecessary. Where bankruptcy absolutely becomes necessary is if you are in the same financial situation but have $50,000 worth of credit card debt and medical bills.
Even if you get every card or hospital to settle for 10 cents on the dollar (an unrealistic goal for most clients), and even if you can avoid the tax on the 1099 for the forgiven debt, that’s still at least 2-3 times what you’d pay for a bankruptcy to discharge the debt altogether. With so much debt, settlement is not only unrealistic, but it costs significantly more than a bankruptcy filing. For an attorney not to disclose that is tantamount to malpractice.
2. You cannot discharge student loans in bankruptcy.
Answer: This is another major misstatement, largely perpetrated by student loan lenders. In order to discharge student loans, there is a very high standard (possibly relaxed by a recent decision in the 7th Circuit Court of Appeals for Illinois/Indiana/Wisconsin) where you have to demonstrate a good faith attempt to make payments and a serious reason why it’s impossible to pay anything back. Essentially the situation is for people who are unable to earn a significant income, will likely never have the means to do so, leaving the possibility of repayment fruitless. That’s a high standard for sure, but it’s by no means impossible. (Think a 60 year old disabled person with only $700 per month in social security/disability coming in, with expenses of $1000 per month and $60,000 of outstanding student loans). With or without an attorney, people have successfully discharged significant private and government-backed student loan debt.
3. I want to file bankruptcy, but if I do, I’ll lose my (car, boat, beagles, RV, bank account, retirement accounts, etc.)
This aggravates me this most because it assumes that the point of bankruptcy is to take everything from the debtor. The exact opposite is true: an honest but unfortunate debtor gets a fresh start (in Chapter 7, or a repayment plan in Chapter 13) in exchange for listing, valuing and exempting assets. Every state has a scheme of exemptions (with some, like Wisconsin, allowing federal exemptions, while others, like Illinois, do not). The easiest way to find out what you can maintain: Talk to a competent bankruptcy lawyer. Call us at Lakelaw or e-mail us. Even if we don’t practice in your jurisdiction, we can refer you to a qualified consumer attorney in another area. You’ll be surprised, but typically 90% of Chapter 7 cases or so are no-asset 7 cases where the filing debtor turns over nothing.
The moral of this story: Speak with an attorney and learn the truth before believing what people write and say to scare people away from bankruptcy. It may not be for everyone, but for most debtors, it’s a huge relief and worthwhile decision.
When a bankruptcy is filed, any schedules and statements that aren’t filed with the basic paperwork are due within 14 days from the case filing. For almost everyone, that is plenty of time to gather paperwork, meet with an attorney, and get the rest of the documents in. The Court may extend the deadline on a motion by the debtor under Rule 1007, but it doesn’t automatically have to grant it. The Court needs “cause”. One judge in the Eastern District of Wisconsin has strongly suggested he won’t grant “boilerplate” motions without support.
Judge Halfenger’s decision in the Brown case expressed frustration when the motion simply stated the debtor was “gathering documentation”. There was no affidavit or explanation why the motion was filed on the very last day with no affidavit or support. In plain English, explain why 14 days is not enough, or the Judge may simply say it’s too late and dismiss the case for failure to file required documents.
Don’t let your case get dismissed. File your schedules on time or have a very good reason why not. Speak to a Lakelaw attorney to determine what falls under “cause” to extend the time frame.
A few years ago, the US Supreme Court decided a case called United Student Aid Funds, Inc. v. Espinosa. The decision held that even when a Chapter 13 plan violates the Bankruptcy Code, the creditor must object within a set time or else they won’t get to object later, when the bankruptcy is done. Apparently creditors still haven’t learned.
In a recent decision by Judge Kelley in the Eastern District of Wisconsin, the Court held that the creditor, American Family Mutual Insurance Company, was too late when it moved to reopen a long completed Chapter 13 to challenge an improper plan. Even though the case was completed before the Espinosa decision, the principle still applied.
Creditors who receive a Chapter 13 plan should ALWAYS review them. That is free advice from counsel for Chapter 13 debtors.
“After losing the standing argument in state court, it is beyond frivolous for the Debtors to file bankruptcy, reiterate the same losing arguments and now claim, not only that the Note is invalid, but that the foreclosing creditor and its attorneys are liable for RICO violations for filing the Note as an exhibit to the foreclosure complaint.”
- Rinaldi, et al. v. HSBC Bank USA, N.A., as Trustee, et al. (12-2412, Feb. 22, 2013, Hon. Susan V. Kelley)
As the Eastern District of Wisconsin has made clear over the last year, you cannot litigate and lose a state court foreclosure case, then turn around and relitigate the case in bankruptcy court. The Rooker-Feldman doctrine (as described here in this previous blog post) prevents this second bite at the apple.
This decision was quite thorough because in addition to standard objections to the proof of claim and standing arguments, the debtors/adversary plaintiffs also alleged common law fraud, RICO violations, and other claims against the original lender, the servicer/proof of claim filer, and numerous individuals and law firms. Thus, the judge was required to analyze the merits of each before ultimately dismissing each and every claim.
The moral here: If you believe you are the victim of foreclosure fraud, please contact us immediately. If you have a judgment of foreclosure entered in state court, it is extra important that this be discussed before you decide to challenge it in bankruptcy court. Contact a Lakelaw attorney for more information.