One of the biggest benefits of a bankruptcy case is that the debtor can get a discharge of most, if not all, of his debts. Another benefit which is often overlooked is the right to get property back which someone else may have taken away. 

In order to better understand that, you want to know what the Bankruptcy Code means by the term “custodian”.

Under the Bankruptcy Code, a “custodian” means:

•  receiver or trustee of any of the property of the debtor, not in bankruptcy
• assignee under a general assignment for the benefit of the debtor’s creditors; or
•  anyone who to takes charge of property of the debtor to enforce a lien against such property, to sell it for benefit of the debtor’s creditors.

Why is this important to you?  Well, it can be vital if somebody repossessed your car just before you filed a bankruptcy case.  This happens pretty often.  The Seventh Circuit Court of Appeals, covering Illinois, Wisconsin and Indiana recently decided in Thompson v. GMAC that a creditor who repossessed a debtor’s car prior to a bankruptcy case but had not yet sold it was a “custodian” .  This was vital to the debtor because under the Bankruptcy Code, a “custodian” must give back to the debtor, or the trustee as the case might be, any property which it may have in its possession on the day the case is filed. 

If you’re thinking about filing a chapter 13 case or keeping your car in a reaffirmation agreement, you can claim that the creditor was acting like a custodian when it took back your car before your bankruptcy.  Make your lawyer get it back.

Lakelaw helps people keep their cars in bankruptcy in Illinois and Wisconsin.

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Clients frequently ask if they can keep a credit card after they file for bankruptcy under chapter 7.  They often think that just because they have a zero balance, the credit card company will still allow them to use the credit card after bankruptcy. 

Unfortunately, we can’t be sure whether or not you’ll be able to keep using your credit cards?

Why? 

Credit cards give you the opportunity to incur debt in the future.  From the standpoint of the credit card company, a credit card is a “financial accommodation.”  Why is this important?  A “financial accommodation” is a special kind of a contract when it comes to bankruptcy. When you file a bankruptcy case, the company which extends you a “financial accommodation” is not under any obligation to continue to do so.  So the credit card company might allow you to keep using it – but then again, it might not. 

If you have “closed end” credit – where you owe money but can’t borrow new money – you’ll have the opportunity to reaffirm the debt and pay it off after bankruptcy.  In exchange, you won’t be held in default and you won’t lose your collateral.  But for “open end” credit, there’s no assurance that you’ll be able to pay as normal and borrow new money after bankruptcy.

So when filing your bankruptcy case, be prepared to move to a cash economy until you rebuild your credit.  And you will rebuild your credit.  Lakelaw Cares and will help you rebuild your credit after bankruptcy.

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My grandfather Jacob was born in Romania.  There, he was known as Jakub Lebu.  That’s because he was Jacob, the son of Leb.  Had he been born in Germany, he’d be Jakob Liebsohn.  In Romania, the “u” at the end of the name is the same as “son” in English.

When he arrived at Ellis Island, they changed his name to Leibowitz – to make it more “American” sounding.  Now that’s pretty funny.  People tend to have a hard time with my name, even though it’s rather common now.

There are a lot of people named David Leibowitz around.  There’s a journalist in Phoenix and a stock analyst in New York.  There’s a pastry chef and quite a few physicians too.  There’s even a bankruptcy lawyer named David Leibowitz in London and a state representative named David Leibowitz in San Antonio (his middle name is McQuade – and he’s a personal injury lawyer too – very Texas) – I bet he has a black San Antonio cowboy hat and boots to go along with it.  You’re more likely to find me in hiking boots and a baseball cap.  There’s also a David Leibowitz who is an Assistant United States Attorney in New York.

People spell Leibowitz in a lot of interesting ways:

Like these:

• David Leibowitz
• David Liebowitz
• David Lebowitz
• David Lebowicz
• David Libowich

Lots of people want the “w” in my name to be a “v” and they pronounce it that way too.  Like this:

• David Leibovitz
• David Liebovitz
• David Lebovitz
• David Lebovich

Some people think my name is “David Lee Woods” but most of those people come from the South.

In Chinese, it’s hard to say my name, so they use three Chinese utterances:

• Li
• Bo
• Tze

Here are helpful hints on how to say my name:

It has three parts:

• “Lee”
• “Bow”
• “Itz”

The emphasis is on the first syllable.  Most people can say these three syllables.  And most of my friends and clients can say the whole thing together too.

We at Lakelaw have had the honor to represent people of every nationality imaginable.  We are interested in knowing you and also where your family came from.  We want to know your customs and culture because we want to give you the best possible representation.  If we can, we’ll speak your language.  So just like we want you to know what’s in our names, we want to know what’s in your’s too.  One recent Saturday, we saw people from Mexico, Armenia and India as well as people of Irish and Italian ancestry. 

Lakelaw offers solutions to bankruptcy problems for  people from all over the world – no matter what your name might be.

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Today, I’m speaking at a panel of the National Association of Consumer Bankruptcy Attorneys in Tucson, Arizona.  Our panel is teaching hundreds of lawyers from all over the country how to fight fraudulent claims that mortgage lenders and mortgage servicers make in bnakruptcy cases.  It’s bad enough that they are pushing you around in mortgage foreclosure.  But when we file a bankruptcy case in chapter 13 to protect you.  We are teaching lawyers throughout the US how to challenge bogus claims, junk fees, failure to credit your loan payments to your mortgage and lots more.  We are teaching NACBA lawyers how to fight back in chapter 13 cases too. 

You want to save your home.  Lenders have armies of lenders fighting to throw you out of your house.  We’re the few good men and women who are fighting for your rights, in the trenches every day to help you keep your home.

Lakelaw defends people against foreclosure in Illinois and Wisconsin.  Call us now at 1 -866 – LAKWLAW (525 5359),

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Your bankruptcy attorney should take pride in his work.  And your bankruptcy lawyer’s work should be professional and competent.  We at Lakelaw take pride in our work. And we put our money where our mouth is too.  We carry more than $1,000,000 in malpractice insurance.  So far, after 35 years, our carriers have never had to pay a claim!

You can check to see whether your Illinois bankruptcy attorney carries malpractice insurance at www.iardc.org.

We were surprised to find that some of the biggest names in the industry don’t carry malpractice insurance.   This is no reflection on the competence of their work.  But you, the consumer, have the right to know.  And you have the means to find out.

We at Lakelaw stand by our work.  And we stand by you, our valued clients.

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Bankruptcy can help people with debt.  Bankruptcy doesn’t solve problems for people without income.

In this horrible recession, we frequently see clients who are facing bankruptcy and foreclosure because they have lost their jobs.  Bankruptcy allows an honest debtor to get a fresh start.  However, bankruptcy can’t solve the problems of those who don’t have adequate income with which to live.

Recently, I met a prospective client who has been solidly a member of the upper middle class.  He made more than $100,000 per year.  He and his wife own a nice home in a nice neighborhood.  His wife raised their three children as a full time mom and homemaker.  Now he has lost his job. He works part time in retail.  His wife works part time in retail.  Their combined family income is less than $2000/month.  They can’t pay the mortgage any more. It will even be hard for them to pay their rent, eat and live on the income they make.  They will almost certainly lose their home to foreclosure.  No loan modification can possibly work as 31% of their income isnlt even $700/month – not enough to sustain any mortgage on their moderately priced home – a home which has gone down in value more than 30% since the market peak.

What can be done for this middle-age couple and their family?

Bankruptcy alone is not the solution. Aside from their mortgage, they have hardly any debt.  They will have to sell their house and may have a hard time doing so because of the market. Their house may have to be sold in a short sale. 

The problem here is less debt related and more income related.

The Solution – Retraining and re-education

People are resilient. They can learn new skills.  Community colleges can help people evaluate their skill-set and set them on a course of retraining to productive work for which there is a demand.  We can no longer be a nation of consumers and store clerks.  We need to produce goods and services which people need and leave us and others around them better off.  Every community college can help people learn the skills they need to be able to survive and thrive in the the 21st century information economy. 

Never give in

The words of Winston Churchill have never been more apt – “Never give in.  Never give in. Never, never, never, never – in nothing, great or small, large or petty – never give in, except to convictions of honor and good sense.”

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People often ask if they can file a bankruptcy case without their spouse joining in the petition.  The answer is “Yes, you can file a bankruptcy without your spouse, and even without your spouse’s permission or knowledge.”

Of course there are a few catches.

The most important catch is the so-called “means test.”  In 2005 when Congress amended the Bankruptcy Code, they decided that people who could afford to pay something to their creditors should be more or less forced to work for them for 5 years.  To put it another way, if you make more than the median family income for a family your size, you are presumed to be abusing the bankruptcy system if you try to file a chapter 7 case and pay nothing to your creditors.  Even if you have no assets for your creditors, if you are an above average earner, your earning capacity is deemed to be something to which your creditors are entitled.

Here’s the catch.  Supposing you  make maybe $35,000 a year.  If you were single, you could easily file a bankruptcy case under chapter 7.  You make less than the median income in most states.  Suppose you were married to a postal worker who makes $60,000 a year and have no children.  Even if your spouse doesn’t file, you are considered to have a household income of $95,000 a year, well above the median.  Your spouse’s income is included for the means test even if you spouse is not filing along with you.

You are entitled to exclude from your non-filing spouse’s income whatever he or she demonstrably spends on himself or herself – this is called the “marital exclusion.”  Your bankruptcy will not appear on your wife’s credit report.  And your bankruptcy will not affect your non-filing husband’s credit.

The United States Trustee looks this type of case over carefully.  You can see that it takes us longer and it is more complex to deal with a case where you file by yourself without your spouse.  We almost always have to charge you more for such a case.

We can work this out with you in most cases.  But it is time consuming and surprisingly complex.

Lakelaw can help you file a bankruptcy case even if your spouse is not included in the petition.  Call us toll-free at 1-866-LAKELAW (525-3539)  for help in metropolitan Chicago, Southeast Wisconsin, and in the Coulee- 7 Rivers Region around La Crosse.

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Is the statute of limitation for credit card debt 10 years or 5 years in Illinois?  For years, credit card companies and debt buyers from credit card companies have tried to collect debts up to 10 years old in Illinois.  This is because the statute of limitation for a debt arising from a written contract is 10 years in Illinois.

However, the statute of limitation for a general account stated is only 5 years in Illinois.

Which one applies?

In a very important recent decision of the Illinois Appellate Court, Portfolio Acquisitions v. Feltman, No. 1-07-3004 (May 20, 2009) 3rd div. the court held that the five year statute of limitations for accounts stated, rather than 10 year limitations period for written agreements, applies in a complaint by debt collector against defendant for collection of credit card account balance.

Debt collectors frequently try to collect debts beyond the statute of limitation.  They try to trick, lure or otherwise persuade people to pay even a little bit of the debt to revive the statute of limitation.  They act friendly.  They call you a client.  This is a scam.  It is a violation of the Fair Debt Collection Practices Act.  Click here to learn more about the FDCPA.  We often refer to this sort of debt as “zombie debt” becauise it seems to arise from the dead to haunt you.

Lakelaw can help defend you against credit card debt.  If you get sued for “Zombie Debt”, we’ll sue the debt collector back and seek damages and attorneys’ fees.

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The main reason to file a bankruptcy case is to discharge, eliminate and wipe out debt.  And of course, as we have explained in previous posts, in bankruptcy, an honest debtor can get a fresh start through the discharge in bankruptcy.

However, in bankruptcy, some debts are not dischargeable.  The reason for this can be found in Section 523(a) of the Bankruptcy Code.

Some debts are never discharged in bankruptcy.  A creditor doesn’t have to do anything  for these debts to remain valid after bankruptcy.  Here are some examples of non-dischargeable debt:

• Certain types of taxes and particularly taxes where the debtor filed a fraudulent return tried to evade or defeat the tax and particularly income taxes less than 3 years old.
• Debts which the debtor did not list in his bankruptcy papers in a case where the creditor might otherwise have recovered a dividend – commonly referred to as an asset case
• Debts for a domestic support obligation – arising from a divorce or other family law sort of situation
• Other debts, such as property settlements – arising from a divorce or other family law sort of situation
• Most fines, penalties or forefeitures payable to a governmental unit
• Student loans except in extraordinary cases
• Personal injury claims arising from use of alcohol or drugs
• Criminal restitution
• Condominium or homeowner association assessments due after the debtor files his bankruptcy case.  For more information about post-petition liability to homeowners or condo associations, click here.

In addition to these problems, a debtor could be sued in a complaint to determine dischargeability of debt during the course of a bankruptcy case.  Debts for these types of claims are discharged in bankruptcy unless the creditor timely files and thereafter wins a lawsuit during the course of the debtor’s bankruptcy case.  The normal attorneys’ fee for the bankruptcy case will most certainly not cover the cost of defense.  A creditor can file a lawsuit to force the debtor to pay these kind of debts:

• debts procured by fraud or false pretense
• debts procured by a false financial statement
• debt for luxury goods or services obtained within 90 days of a bankruptcy are presumed to habe been obtained by fraud or false pretense
• cash advances for more than $750 within 70 days of a bankruptcy case are presumed to have been obtained without the intent to repay.
• debts procured by breach of trust
• debts arising from a willful or malicious injury to another or their property.  In this situation, the debtor must have had the actual intent to harm.  Mere negligence or even recklessness is not enough to make a debt non-dischargeable.

You should discuss any of these situations with your bankruptcy attorney.  Some of these debts might be dischargeable in chapter 11 or chapter 13.  Other remedies might be possible to help you address the problems you face from otherwise non-dischargeable debt.

Lakelaw represents people in bankruptcy.  Not only do we defend people against claims that their debts are not dischargeable, we also pursue claims asserting that debts might be nondischargeable.  

For help with potentially nondischargeable debt, call Lakelaw now at 1 866 LAKELAW (1-866-525-5359).

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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.

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