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Reverse Mortgages and Baby Boomers – No free lunch

Posted by David Leibowitz on March 24th, 2014 in Uncategorized

Baby Boomers are signing up for reverse mortgages at record levels.  They’ve taken out $15.3 billion worth in 2013, an increase of 20 percent from the year before.

Baby boomers who have saved nothing for retirement  – almost 77 million of whom are going to retire fuel growth in reverse mortgages.

Just because boomers are getting reverse mortgages, it doesn’t mean that they are getting out of their debts.  Bankruptcy remains the best and surest way to eliminate debt and secure a retirement free from hounding debt collectors.

If you are thinking about a reverse mortgage, call us at Lakelaw 847 249 9100  to discuss how it fits into your overall scheme.  Remember that these are high-fee loans. Remember that you will lose all equity in your house.  Remember that you’ll have nothing to pass on to your loved-ones and nothing to show for your years and years of hard work.

Just because Henry Winkler looks so sincere in TV ads hawking reverse mortgages doesn’t mean that its the right thing for you.  Ask us to tell you the whole truth about reverse mortgages.  You may be able to keep possession of your house but from an economic standpoint, it won’t be yours – it will be the bank’s.  Don’t forget this.



Divorce and Bankruptcy – It’s complicated

Posted by Justin Storer on February 20th, 2014 in Uncategorized

Divorce is complicated. Bankruptcy is complicated.  Divorce and bankruptcy together are really complicated.

The Bankruptcy Code is a series of trade-offs. The interests of creditors are balanced with those of the Debtors who need relief.  Some debts can’t be wiped out in bankruptcy.  Rights arising from divorce are treated with great respect in bankruptcy. Here are some debts which can’t be3 discharged in bankruptcy.

  • recent tax debt
  • debts where the debtor lied or committed fraud
  • student loans
  • debts arising from divorce – domestic support obligations in particular
  • debts arising from intentional wrongful acts – like assault and battery
  • debts arising from justifiable reliance on a false financial statement
  • debts arising from embezzlement or defalcation.

The Bankruptcy Code is sometimes much more complicated in practice than it is as written. An example of this is found at sections 523(a)(5) and (a)(15) both of which deal with debts arising from dissolution of marriage or divorce..

Bankruptcy Code section 523(a)(5) is straightforward: Not dischargeable is any debt for a “domestic support obligation.” So child support, alimony, and so forth are not dischargeable in bankruptcy. 523(a)(15) specifies that not dischargeable is any debt “to a spouse, former spouse, or child of the debtor” that isn’t child support, but that is made “in the course of a divorce or separation or in connection with a separation agreement, divorce decree, or other order of a court of record…”

When representing a debtor in bankruptcy, an attorney needs to review the divorce decree. But the analysis doesn’t stop there.

Because 523(a)(15) has been interpreted more broadly than it reads. What if, for example, a divorce decree specifies that one spouse will be 100% responsible for a joint credit card?

That wouldn’t be a debt to the (ex-)spouse. It’s a debt to the credit card issuer. It seems like it shouldn’t be 523(a)(15) debt – but it is.

Imagine: A family court Judge has already found one partner responsible for payment of the debt. If that partner doesn’t pay – if that partner is discharged in bankruptcy – the debt doesn’t just evaporate. The other partner retains the obligation to pay. For that reason, even though this hypothetical obligation to pay is not a debt “for a domestic support obligation,” and it’s not “to” the spouse, former spouse, or child, it’s still a 523(a)(15) debt. But it’s not, interestingly enough, 523(a)(5) debt.

Not that it makes sense; It’s complicated. There are options. A chapter 13 discharge may, in fact, discharge 523(a)(15) debt, just like it can discharge parking tickets (523(a)(7)) that a chapter 7 can’t discharge. A lawyer needs to be both sophisticated and ready for a swashbuckling argument with the other partner’s attorney. Settlement is possible. The point is, in this and so many other ways, the Code has nuances and a client filing for bankruptcy needs a lawyer who can explain them, and can make them work best for the client’s needs.

Lakelaw and Social Media

Posted by Ryan Blay on May 23rd, 2012 in Uncategorized


Lakelaw remains committed to serving our clients and protecting their confidentiality.

That said, like many firms, we are expanding our social media presence.  In addition to this blog and our websites, we also can be found on Facebook ( and on Twitter (@davidleibowitz for our founding attorney David Leibowitz, and @LakelawKenosha for updates from our Wisconsin operations).

Please check us out, comment on our pages, tweet us and re-tweet our posts, and spread the word about our services.

Thanks to all our dedicated followers.

Bankruptcy is Bad….Unless You’re a Mortgage Servicer

Posted by Ryan Blay on May 14th, 2012 in Uncategorized


Nobody comes to our office proud to be filing bankruptcy.  Bankruptcy to many people evokes shame, financial flaws, mistakes, and humiliation.  More than anyone, creditors have been driving these feelings to associate with bankruptcy so consumers will try everything possible to avoid it – including liquidating 401Ks, borrowing from friends, family and payday loan stores, and incurring mental anguish if they do choose to file.

How the mighty have fallen.  Today, a company you may never have heard of called Residential Capital, LLC (commonly called “ResCap”) filed for Chapter 11 Bankruptcy relief in New York.  For most people, Chapter 11 business bankruptcies aren’t that interesting.  The first day alone consists of dozens of motions and emergency hearings that would drive the average reader to boredom or worse.  But this might interest people for two reasons.

First, ResCap is a division of Ally Financial (formerly known as GMAC).  Ally is doing well in its banking and its auto loan divisions.  But its mortgage division, ResCap, left a lot to be desired.  Ally was one of the five major mortgage servicers to settle a substantial lawsuit with the state Attorneys General a few months ago.  They were accused of robo-signing and committing other substantial bad acts.

Second, you are a creditor of ResCap.  So am I.  So are all of your friends and family.  The federal government, through the Treasury Department, loaned Ally about $17 billion.  Let’s just say the bank is in no way ready to pay the remaining $12 billion back now.  Nor is the government ready to shed its significant investment in ResCap.  This is the ultimate point of interest:  How much will the government recover from its investment it made to avoid a financial collapse?

Bankruptcy offers companies, as well as individuals, a fresh start and a chance to reorganize.  It’s a little interesting how individuals are treated with contempt when they file, but businesses don’t hold themselves to the same standards when they require the same protection.  That double standard won’t change any time soon.

I’ve Already Filed for Bankruptcy But I Need Financial Relief Again

Posted by Ryan Blay on May 3rd, 2012 in Uncategorized


People routinely come into our office concerned about filing a bankruptcy because they have filed for bankruptcy in the past. If the filing was over 8 years ago, it’s not going to impact our options to help.  But  the Bankruptcy Code prevents continuous bankruptcy filings. After filing a Chapter 7 bankruptcy, you must wait 8 years to file another Chapter 7 petition (measured from the date of filing of the original case) or 4 years to receive the full benefits of a Chapter 13 bankruptcy. After filing a Chapter 13 bankruptcy, you must wait 6 years to file a Chapter 7 or 2 years to file another Chapter 13. Even though the full benefits of bankruptcy might not be possible because of a previous filing, there still may be answers for you.

Two of the best ways to receive financial help are filing a “no-discharge” Chapter 13 or filing a Chapter 128 State law remedy. A “no-discharge” Chapter 13 allows you to file for bankruptcy but not receive the full benefits of a discharge (where your debts are forgiven). The “no-discharge” Chapter 13 would be the best option left if you fell behind on a car payment while out of work but recently got re-hired. If the company you’re paying for your car payment tried to repossess your car, you could file a Chapter 13 and prevent the creditor from taking your car – or return it if it’s been repossessed but not sold yet. You would get 3 to 5 years to make up the payments you missed on the car, while also taking care of any debts you’ve received since your last bankruptcy filing. The only catch with the “no-discharge” Chapter 13 is that you have to pay back everything in full.

The Wisconsin residents we serve have another option:  the State law Chapter 128 remedy. You would use a Chapter 128.21 Petition to Amortize Debts if you have fallen behind on bills that were not secured by property.  This means we can’t take care of furniture on credit, car loans/title loans, mortgages, and tax debts.

But most bills, like medical bills, high-interest payday loans and credit card bills can be included. With a Chapter 128 you pay back the bills you choose over three years. Like the “no-discharge” Chapter 13, you also have to pay the bills back in full.  The good news is that interest stops and your wages and bank accounts can’t be touched by the creditors you list.

If you need financial help but are unsure what to do because of a previous bankruptcy filing, give the professionals at Lakelaw a call. We help people in financial difficulty find the right solution for them and do so by using Care, Kindness, Courtesy, Respect, Professionalism and Dedication.

This article was drafted by Lakelaw associate Nicholas D. Strom

If I declare Chapter 7 bankruptcy, how long will it take me to get my finances back in order?

Posted by Ryan Blay on April 27th, 2012 in Bankruptcy, Bankruptcy Information, Chapter 7, Illinois, Life After Bankruptcy, Uncategorized, Wisconsin


While each situation is different, it is possible for you to get back on your feet very quickly after a bankruptcy – maybe even as fast as a few months.  There are certain steps you should take while also being careful not to get yourself right back into financial trouble.

The first way to build your credit back up is by reaffirming debts within the bankruptcy. A reaffirmation is simply an agreement to keep paying a debt even though you declared bankruptcy. You shouldn’t take this idea lightly and should discuss all of the pros and cons with your attorney. But if you do reaffirm a debt, your credit report will reflect the positive payments you make on the debt.  This is why we say it’s possible to file bankruptcy and still keep a car or home.

Another way to improve credit is to take out a credit card and pay off the balance every month. This way you will show potential creditors that you borrow money but are a good risk because you always pay it back. These payments will show up on your credit report and make a positive impression. However, this is something that should be done with caution. You will not be able to declare bankruptcy again for several years so it is important to pay off the balance every month. This is another important discussion to have with your bankruptcy attorney.

Finally, a good way to rebuild your credit is to take out a small secured debt. A secured debt is a debt where you and the creditor agree that if you don’t pay the creditor can have the property back (like a car loan). While it might be hard to take out a large loan for a car you can probably take out a small loan for a television, washer or dryer or have a debt tied to a bank account or credit union account so long as you show the creditor that you have some money in the bank.

Taking on debt after a bankruptcy is a big decision.  Many people are afraid to borrow again because they are afraid they will be back in the bankruptcy court again. Other people need to take on debt or want to take on debt to establish credit and possibly make a big ticket purchase in the future, for instance a home. Any decision to take on debt after bankruptcy should be made after consulting with your bankruptcy attorney.  The only way to earn credit is to borrow and successfully pay off debts, whether the debts are for utilities, gas credit cards, or car loans.

This post was authored by Lakelaw associate Nicholas D. Strom.

A Warm Thanks to Our Clients and Colleagues For the Holidays

Posted by Ryan Blay on December 21st, 2011 in Uncategorized

Dear Friends:

Lakelaw wishes to extend our sincerest thanks this Holiday season to the colleagues, clients, staff, and administrators who make our jobs so rewarding. So often we hear complaints – about sloppy attorneys, rude judges, untrustworthy clients – and there is much that needs to be done to fix the justice system and make it accessible for everyone. But we are fortunate here to have a fine legal system with dedicated professionals helping to ensure the processes run smoothly. The staff, judges, clients, and others we’ve encountered have been helpful and dedicated to public service, and we appreciate this.

Bankruptcy and foreclosure defense in particular are areas of law that deal with very sensitive concerns – the loss of a home, the loss of a lifestyle, threats from creditors. We recognize the need to be sensitive and compassionate and hope that we meet the high standards we hold for ourselves. The genuine thanks of our clients and the opportunity to see consumers obtain a fresh start and relief from debts are two of the benefits we enjoy above all.

So thank you all again and we will be here to help in 2012 and beyond.

Saving Your Home Through Bankruptcy

Posted by Ryan Blay on December 19th, 2011 in Bankruptcy Information, Chapter 13, Foreclosure - Saving Your Home, Illinois, Mortgage Foreclosure Defense, Mortgage Modifications, Uncategorized, Wisconsin

While each bankruptcy case is different we attorneys at Lakelaw see a common theme among many bankruptcy filers: the threat of losing a home in foreclosure. This post tries to explain some of the options debtors have when facing foreclosure.

The first question anyone must answer is whether or not to try and save the home. Someone wishing to walk away from their home without a final foreclosure could have two options: Attempting a Deed in Lieu of Foreclosure or agreeing to a Short Sale

In a Deed-in-Lieu, the offer is to give the home back to the bank to stop the foreclosure. However, mortgage defense attorneys have not seen much success with this lately. Due to so many homes already foreclosed (and those that are still going to be foreclosed on any day now), banks are often refusing to accept a Deed in Lieu of Foreclosure.

A second is a short sale. A short sale involves a homeowner, with the help of a realtor, finding a buyer who is willing to buy the home at a reduced value. The bank would then have to agree to waive the difference between what the home sold for and what was owed—the deficiency—or the homeowner would have to bring money to pay the difference at closing. Banks like the idea of having a waiting buyer instead of waiting through months of foreclosure, but they do not like the idea of walking away from the deficiency amount.

What if you want to try and keep your home? If you and your bank are working well with each other, a home modification could be an option. The bank would be willing to work with the borrower and try to find a payment plan that works. It should be noted that the Wisconsin branch of Lakelaw has seen some promise in mortgage modification within the Chapter 13 modification program set up in the Eastern District of Wisconsin bankruptcy court).

Another option is Chapter 13 Bankruptcy. This may be the best option a debtor has to save their home. When the debtor files a Chapter 13 bankruptcy an automatic stay goes into place. This means the bank must stop the foreclosure and the borrower can stay in the house as long as they are making payments to the trustee and a payment to the mortgage company after the bankruptcy filing. The goal is to find a way to cover the regular monthly mortgage payment plus an additional amount to catch up on the arrearage. A Chapter 13 bankruptcy is a difficult process and is different for each person, so it is always best to speak with an attorney about your particular situation.

If you have questions about saving your home, the professionals at Lakelaw are here to help. We serve our clients with Care, Kindness, Courtesy, Respect, Professionalism and Dedication. We can be reached at 1-800-LAKELAW in Illinois and 262.694.7300 in Wisconsin. Give us a call so we can help you with your finances and your home.

This post was drafted by Attorney Nicholas Strom

Improve Your Credit In Four Easy Steps

Posted by Ryan Blay on September 6th, 2011 in Life After Bankruptcy, Uncategorized

We’ve consulted with thousands of people who often ask us a version of the same question: “How do I improve my credit?” Whether you are coming out of bankruptcy, in foreclosure, or just a typical consumer, there are several easy steps you can take, as seen on sites such as this,  to improve that all-important credit score. 

1. Fix your payment history by paying as many bills as possible on time, responding immediately to collection agencies when they call or write about a debt, and paying certain debts in full so they no longer have a balance owed.

2. Avoid excessive balances on credit cards and loans that are simply too expensive (or have too high an interest rate) to repay in full. That includes loans for furniture and other items where “no money down!” is promised, but interest rates immediately become outrageous the moment the promotional period ends.

3. If you have a credit or charge card you pay every month on time, keep it open. Positive payments are your friends. Also, start early if you can by taking out very small limits on credit cards when you are young (but not going overboard with using them) to establish a good history from an early age.

4. Check your credit report periodically (our firm recommends Annual Credit Report because it is free) and avoid paying to view the reports. There is no need to pay $20 per month or more for a company to “monitor” your credit report and send you the same reports you can get for no cost every year. 

The bottom line is that credit is a statistic, a figure or number you can help manipulate and stay strong to help you when you need it. Beyond the obvious advice to pay everything on time, you can manage which debts are outstanding, which are closed and which carry large balances to be a smarter, strong consumer.   For more information, contact Lakelaw at 866-LAKELAW ((262) 694-7300 in Wisconsin), or a trusted financial advisor.

Los Angeles Dodgers File for Chapter 11 Bankruptcy – Lessons for Small Business

Posted by David Leibowitz on June 27th, 2011 in Bankruptcy, Chapter 11, Uncategorized

The Los Angeles Dodgers couldn’t make payroll. The McCourts, their owners, are involved in a nasty divorce. They are having trouble with their franchisor – Major League Baseball. This is making headlines. But it could be anyone’s story. Divorce, cash flow difficulties, franchisee problems and an inflated payroll have been the downfall of many businesses. But when it happens to a major league baseball team, it’s a big story.

What does the Dodger’s chapter 11 mean to you?

  • Chapter 11 can be caused by turmoil in the personal lives of the owners
  • Costly financial commitments can be a problem – they need to be addressed in chapter 11
  • A franchised operation must make peace with the franchisor
  • Financing is critical in any chapter 11 case

Look how this plays out with the Dodgers.  Divorce is frequently accompanied by financial stress. It’s certainly a distraction to the management of any business. The McCourts don’t seem to have their eye on the ball, figuratively or literally. They have a great big contract with Manny Ramirez. It doesn’t seem like he is going to perform up to the standards set for him. But the Dodgers still have to pay.

They say that all they need is to sign up their $3 Billion (that’s with a “B”) television contract and everything will be OK. Of course, this TV contract seems not to be OK with the franchisor, Major League Baseball.

What lessons can we learn? Big business frequently has the same problems as little ones.

Chapter 11 may be a good answer for the Dodgers. Small businesses can take advantage of chapter 11 too. In order to be successful, you need counsel who knows how to deal with small businesses in chapter 11, one who will work efficiently and cost effectively. David Leibowitz has close to 40 years of experience representing debtors large and small.


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