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Bankruptcy Doesn't Need To Be Stressful
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Grayslake Real Estate And Bankruptcy Law Blog

Bankruptcy filings are expected to increase

The strong economy has kept personal bankruptcy filings down for over a decade. Since the dark days of the 2008 recession, bankruptcy filings first went on the decline and then flattened out around 2016 and later.

Now, there's every indication that recent economic unrest -- especially that related to the tumble the stock market has taken in early 2020 -- could drive personal bankruptcy rates higher again.

How will bankruptcy affect your employment opportunities?

Perhaps you are looking for a new job with more opportunities for advancement, but there is a problem: You have decided to file for bankruptcy.

You have weighed your options, and bankruptcy is the most logical solution for resolving your debt. Will this decision make your job search more difficult?

There are different ways to organize and pay off debts

It can feel like an uphill battle to try to pay off debts. For people in Illinois, getting out of debt may require an understanding of how to pay things off in the most efficient way possible. Debt is money owed by one party, sometimes called the debtor, to another party, sometimes called the creditor. There are many different forms of debt. A person who purchases more with a credit card than they are able to pay off each month will be carrying credit card debt. A person who takes out a mortgage to buy a home will have mortgage debt.

Among the first steps in any attempt to pay off debts is for the debtor to determine how much debt he or she has. It can be helpful to make a list of quick facts about each debt, including the type of debt, the amount owed, the minimum payment required and the annual percentage interest rate. Personal debt has a direct impact on a person's credit score because it is used to calculate the credit utilization ratio, which is the ratio of the amount of credit used versus the total amount of credit available to the person.

Is selling a home for cash a good idea?

Some people in Illinois may be in a hurry to sell their houses, and the signs that offer to buy homes for cash may hold major appeal. People may wonder if the offers are legitimate or if there is some kind of scam involved. While most of these companies are engaged in a legitimate business, people may also realize that they could receive significantly less than their property may be worth. The companies that buy homes for cash often insist that sellers sign a contract with minimal, if any, opportunities for negotiation.

In most cases, businesses offering quick cash purchases of a home also aim to "flip" the property, quickly renovating it and putting it back for sale at a higher price. Of course, many sellers who work with these companies might also receive more money for their own homes if they update their properties, work with a broker and list their home for showings. Still, many may find the offers appealing, especially if they want to sell their home quickly and do not want to engage in an extended sales process.

Trustees can play a key role in a bankruptcy proceeding

After a consumer files for bankruptcy, a trustee will be assigned to oversee the matter. This person has a variety of roles and responsibilities to both the debtor and its creditors, and the exact role a trustee plays depends on the type of protection a person seeks. For instance, those who file for Chapter 7 bankruptcy may have some or all of their non-exempt assets liquidated.

Therefore, the trustee would be responsible for determining which assets are not exempt from liquidation, selling them and giving money to creditors. In a Chapter 7 case, a trustee might also need to handle creditor claims or object to an attempt to discharge a debt. This person's role is slightly different in a Chapter 13 proceeding because an individual is less likely to lose assets. As with a liquidation bankruptcy, the trustee in a Chapter 13 case could be called upon to handle claims or complaints made by a debtor or creditor.

How to effectively stage a home

Staging a property is an important part of the home sale process as it can maximize the chances that it is sold in a timely manner. Homes that are free from odors and clutter tend to be easier to sell, and buyers tend to want to see homes that are presented as a blank slate. Therefore, it is a good idea to remove family pictures or other personal belongings from bedrooms, bathrooms and kitchens.

It may also be a good idea to rent living or dining room furniture that is neutral in style and color. This may further help a buyer imagine what they could do if they were to purchase the property. Finding ways to add natural light to a home may make it feel warmer and more inviting. Adding light to a home can also make it feel larger and more organized.

What can bankruptcy’s automatic stay protect you against?

When your finances begin to spiral out of control, you may find that it interferes with numerous parts of your life. Depending on how far in debt you are, you may be losing some of your professional earnings to wage garnishment. You may also find yourself on the receiving end of repeated phone calls from creditors.

While these and other possible repercussions associated with falling behind on your bills may prove frustrating, you may be able to seek temporary relief by filing for bankruptcy. Once you begin your bankruptcy case, something called the automatic stay takes effect. During this automatic stay period, certain creditors may no longer lawfully come after you. Just what types of protections does bankruptcy’s automatic stay allow?

Tips for selling a home in a timely manner

The average home stays on the market for 68 days before it is sold. However, there are steps that Illinois sellers and others can take in an effort to get their homes off of the market as quickly as possible. For example, it may be a good idea to consider selling to investors who purchase homes in their current condition. This may allow a homeowner to sell without having to spend time or money on repairs. Homeowners may also be able to avoid paying an agent to help with the transaction.

Those who are planning on upgrading their homes before putting them on the market should focus their efforts in the kitchen, bathroom and bedroom. These are the spaces that buyers tend to be the most interested in when evaluating a property. Sellers are encouraged to get rid of as much clutter as possible inside the home. Doing so makes it easier for potential buyers to imagine how they would use a living room or kitchen.

Brunner test used for discharging student loans

Collectively, current and former students in Illinois and across the country are carrying student debt of $1.59 trillion. Many of these borrowers are struggling to stay current with their repayment obligations, and some are considering bankruptcy as a way out. Bankruptcy may successfully discharge many different types of debt, but student loans are among the most difficult to discharge.

Chapter 7 bankruptcy may allow for the discharge of student debts, but the borrower has a hard road to travel. The person must pass the means test; this compares the income of the bankruptcy filer, also referred to as the petitioner, to the median income for comparable households in the relevant state. After passing the means test, the petitioner will have to demonstrate that he or she will be unable to pay off the student loan debt or that paying it back would be an undue hardship.

Mistakes to avoid during the home purchase process

Home buyers may assume that they are going to be able to move into their homes soon after their offers have been accepted. However, the transaction is not official until the closing date. Therefore, it is important that buyers don't make mistakes that could result in losing a mortgage or otherwise jeopardizing their chances of getting their dream home. Ideally, those who are about to purchase a home in Illinois or anywhere else will not open a new credit card account.

They should also refrain from getting a car loan or adding any other debt to their credit report. Cosigning for a loan is generally not a good idea prior to purchasing a home. This is because it will increase a buyer's debt-to-income (DTI) ratio even if that person is not the primary borrower. Buyers who currently have debt should not refinance their loans or consolidate existing balances.

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