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

What do you need to know about a short sale before you buy?

When a homeowner in Illinois cannot continue to make payments on the property, and the lender gives permission, he or she may sell the house for less than the amount owed to the mortgage company. In this case, you may be able to purchase the real estate for a very low price. 

However, it is a bad idea to assume that you are getting a good deal just because it appears that the house is selling for far less than fair market value. According to Bankrate, there are several common mistakes people make when they purchase a short sale house. Here is how to avoid them.

Making the most of the holidays during bankruptcy

The holidays can be a time of family and great joy. It can also be a time of great spending. For those in the process of a bankruptcy, this can pose an issue.

Whether you are currently undergoing a bankruptcy or contemplating it, having a plan may help to put your mind at ease. There are a few things you can do that may aid you in making the most of the holidays during the bankruptcy process.

What are you legally required to disclose when selling your home?

As someone who is currently in the process of placing your Illinois home on the market, you may be learning as you go and discovering something new at every turn. If you are like many home sellers who are navigating their way through today’s housing market, you may also have questions about what, exactly, the law requires that you disclose to potential buyers.

According to Forbes, failing to disclose something about your home when the law requires that you do so can come back to bite you in a big way, and it can lead to substantial financial and, potentially, even legal, hardship. Thus, it is critical that you recognize the types of matters and details you have to disclose when selling your home, and you must do so even if the disclosures might make it more difficult to find a buyer.

Will bankruptcy cover my student loans?

Like a vast number of Americans, you might have student loan debt that is crushing you. However, you may have heard that your student loans can’t be discharged through bankruptcy. Is this true, and if so, what can you and other Illinois residents do to relieve this financial burden?

As the U.S. Department of Education explains, you cannot get rid of your federal student loans through bankruptcy. This news can be very discouraging if you have significant student loan debt. However, before you despair, you may want to take note of the following points:

  • In rare cases, federal student loans may be forgiven for those who suffer a catastrophic injury or illness that leaves them unable to work due to a permanent disability.
  • You may gain some relief from your federal student loan debt if you worked as a teacher or in a public service government position for a certain period of time.
  • You may not be able to eliminate your student loan debt through bankruptcy, but a personal bankruptcy could free some of your resources to make your student loan payments easier to bear.

Is your homeowners’ association unreasonable?

As you may know, homeowners’ associations, or HOAs, exist to preserve the image and property value of the homes under the association’s jurisdiction. However, many Illinois homeowners resent their HOAs, saying the organizations exert excessive control, unreasonable demands and outrageous fines and penalties against homeowners.

As Realtor.com explains, HOAs can be useful if they keep your neighbor from letting weeds grow on his property and becoming an unsightly mess, or if they don’t allow outlandish decorations like a giant sports team flag tacked to the garage door or Christmas decorations on the lawn well past the holiday season. On the other hand, some HOA board members take things to the extreme by fining or filing lawsuits against residents or even kicking them out of condos for such trivial offenses as the following:

  • Having a dead lawn during a drought in which water restrictions are in place
  • Installing landscaping or yard decorations without getting approval from the board
  • Parking in one’s own driveway
  • Making improvements on a house or painting before gaining board approval
  • Having a pet that is slightly larger than the size restrictions imposed on pets
  • Imposing restrictions on landscaping or parking but exempting themselves from the same restrictions

Why gray bankruptcy is on the rise

At the Law Office of Paul R. Idlas in Illinois, we have noticed that more and more of the people who come to us for help in filing bankruptcy are senior citizens. Even the New York Times has reported on this new “gray bankruptcy” phenomenon, reporting that seniors like you now represent 12.2 percent of all bankruptcy filers whereas you represented only 2.1 percent in 1991.

Unfortunately, a number of factors have coalesced into a perfect storm that often prevents your senior years from being your golden years, including the following:

  • Longer waits for Social Security benefits
  • Skyrocketing medical costs
  • Medicare coverage gaps
  • Extensive debt
  • Little or no savings

How divorce and bankruptcy are related

Divorce is an extremely difficult life situation to face, with emotional as well as financial stresses. In fact, the financial impact of a divorce can sometimes be so severe that it leads to the necessity of filing for bankruptcy.

While not all divorces necessarily end up in bankruptcy filings, there is a significant number of people who do end up having to file for bankruptcy due to the financial hardship brought on post-divorce. Here is some more information about how divorce can sometimes lead to the need for a bankruptcy filing, and ways to mitigate the situation where possible:

How do Americans feel about their personal debt?

If you are an Illinois resident who believes your household has never fully recovered from the 2009 financial crash, you are not alone. Despite frequent news reports of an economic recovery, many people across the nation have failed to feel its effects. If you are one of them, your amount of debt likely has increased in the past decade while your salary or wages have not kept pace.

Surprisingly enough, however, the results of a recent survey reported by Discover.com, show that while 80 percent of Americans reported having at least one type of debt, the majority of them do not think that they have too much debt. The figures break down as follows:

  • Only 40 percent of survey responders believe they have too much debt, with 47 percent of these between the ages of 35-54.
  • Only 43 percent of responders making less than $25,000 annually believe they have too much debt; the figure decreases to 34 percent for those making more than $75,000 annually.
  • The percentages split almost evenly between those with a high school education or less and those with a college or higher degree; 39 percent of the former believe they have too much debt, and 38 percent of the latter express the same opinion about their own debt.
  • Of the people who believe they have too much debt, however, only 18 percent of them are happy about their personal financial situation.

Can you strip a lien from your house?

In you are like many Illinois homeowners, your debts have gotten so out of hand that you cannot pay them and you fear losing your home to foreclosure. But what if you could strip the lien from your home that your second mortgage represents? As Home Guides explains, that may be exactly what you can do by means of a Chapter 13 bankruptcy

Unlike a Chapter 7 bankruptcy that discharges virtually all of your consumer debt, a Chapter 13 bankruptcy is a reorganization whereby you can renegotiate the terms and payment amounts of many of your debts, including your first mortgage. Once you file Chapter 13 bankruptcy, you have approximately 120 days during which you must come up with a plan to repay your debts over an extended period of time, usually three to five years. Your creditors cannot hound you for debt payments during your bankruptcy period, nor can your mortgage lender foreclose on your home.

What you know about Chapter 7

If you are considering bankruptcy as a way to regain hold of your finances, you are not alone. More than 796,000 people across the nation decided to file for divorce from June 2016 to June 2017. Of these filers, approximately 489,011 chose to file for Chapter 7 bankruptcy, or liquidation bankruptcy. As the most common type of bankruptcy, Chapter 7 has definite advantages and disadvantages when compared to other types of financial debt relief. Chapter 7 is designed to wipe out most of your debt, including medical expenses, credit card debt and other bills, and help you start fresh with a clean financial slate. Student loans, delinquent child support payments and money owed to the government cannot be eliminated in a chapter 7 bankruptcy.

In some cases, liquidation bankruptcy could mean that you lose certain items, such as your vehicle or home, during the course of the proceedings. The trustee who is assigned to the case will determine whether you have any valuable assets, property or items that are not protected. These items may be repossessed and sold for assets that will be distributed to creditors. You may be able to refinance your home or vehicle loan and not lose these items during bankrutpcy. Before this can occur, however, the trustee will determine whether you are eligible to file for Chapter 7. Once you qualify and have turned in your divorce paperwork, you will be asked to attend a creditors’ meeting and discuss your debt relief options to the court-appointed trustee.

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