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Recent Blog Posts
Credit counseling requirements in a Chapter 7 bankruptcy
Unexpected events can often result in significant financial stress, leading to a higher amount of debt. Bankruptcy can be a practical and viable option for Chicago area residents who find themselves with debts that have become unmanageable. Deciding to file for bankruptcy is a major decision and the process can be confusing. Therefore, it is important to understand your bankruptcy options, the requirements and the steps involved.
Chapter 7 bankruptcy can be the fastest and best way to eliminate debt, but this type of bankruptcy doesn't work for every person and every form of debt. For instance, credit card debts and overdue utility or medical bills can be discharged, but, debts such as child support, student loans or tax obligations cannot.
Credit counseling is required as part of the Chapter 7 bankruptcy process. The counseling must be done through a Department of Justice approved credit counseling agency and can be completed on the phone or online. The goal of the counseling is to provide an understanding of the bankruptcy process and the impact and potential future consequences of filing for bankruptcy.
When can an executor use the small estate option for a will?
Most people have no experience with wills or the probate process. As a result, if you've been named the executor of a will, you're likely wondering what you have to do, what is the process like and whether there is any way to simplify things. There may be, but it depends on a few different factors.
What is the small estate option?
Illinois understands that going through probate can be a complex and time-consuming process. In light of this, a streamlined process was created for instances where the estate is small enough – to alleviate some of the burden on surviving family members. When an estate qualifies, an executor can file a small estate affidavit and avoid probate entirely.
What are the requirements for a small estate affidavit?
At the outset, the value of the deceased's assets must be less than $100,000. This is not always obvious at first glance – what may appear to be an asset could legally pass to another person or entity without ever going through probate. For instance, if the deceased owned property jointly with someone else, it may pass automatically to the other owner and not be considered an asset for the purpose of probate.
Essential estate planning documents
The passage of time occurs more quickly than anticipated and unexpected events can arise anytime. Regardless of your level of wealth, you should start an estate plan and have these documents prepared.
Power of attorney
A durable power of attorney is one of these essential estate documents. It authorizes an agent to make legal and financial decisions on your behalf if you ever become incapacitated.
A durable power of attorney allows the agent to assume these tasks immediately.
Health care directive
This is also known as medical power of attorney and allows for the appointment of an agent to make healthcare decisions when you cannot. Agents may also communicate on your behalf with health care providers.
A living will is a similar document that authorizes an agent to make end-of-life decisions. This helps assures that a medical professionals comply with a person's wishes.
What are Chapter 7 bankruptcy exemptions?
Chapter 7 bankruptcy is a liquidation bankruptcy process. There are different Chapter 7 bankruptcy exemptions that can protect some of the filing party's property from the process of selling property to repay creditors. Those interested in Chapter 7 bankruptcy protection should be familiar with what the Chapter 7 bankruptcy exemptions are.
Chapter 7 bankruptcy exemptions
There are several categories of Chapter 7 bankruptcy exemptions including:
- Homestead exemption – the homestead exemption allows the filing party to protect equity in their home. A consumer filing for Chapter 7 bankruptcy protection can exempt up to $15,000 in equity in their home from the bankruptcy process. The amount of equity they can protect goes up if the filing party is a married couple filing for bankruptcy jointly.
- Wage exemption – filing parties can exempt a certain percentage of their wages.
What if I have a child after executing my will in Illinois?
It is a wise and responsible decision for Illinois residents to have an estate plan. Even if it is a barebones will that details how the person's property will be distributed at the time of death, it is a key document to have. This is true for people of any age. For some, however, there are life changes that arise after they have completed a will. That might include getting married, divorced and having children. For those who have completed a will and have a child after it has been executed, there are certain legal facts to know.
Understanding how having a child impacts a completed will
For the testator, the contents will not be relevant for the child except in certain circumstances. If, for example, the child is left out of the will because it was not updated to reflect the birth, he or she will still be entitled to get the portion of the estate upon the testator's death. It will be the same amount as if the testator had died intestate (without having completed a will). The share the child will receive depends on the rest of the family. For example, there might be a spouse and other children who will be entitled to portions of the estate. A different issue is if the testator intended to leave the child out of the will. Disinheriting the child would need to be addressed in the will.
How does Chapter 13 bankruptcy work?
There are many unexpected events that occur throughout people's lives in Illinois. Some of these unexpected events can be pleasant surprises and benefit people. This is not always true though. Some of the unexpected events can create hardships for people. It could be a car breaking down or appliances breaking down. People may be involved in an accident and suffered injuries or developed an illness or disease. They may have close family members suffer sever injuries and illnesses that require extra care or many other types of unexpected events.
The unexpected events that cause hardships also tend to be costly financially as well. It cost money to repair or replace things that break down. When people suffer injuries or illnesses people may incur medical bills which can add up quickly. If they lose a job, they lose income. When people incur these extra expenses, it can cause them to fall behind on monthly obligations and people may need to turn to credit cards to keep up and before they know it they may be overwhelmed with debt.
What does it mean to liquidate my assets?
Filing for bankruptcy can be overwhelming, particularly when an Illinois resident does not understand the process. They may hear terms related to bankruptcy and experience confusion when they attempt to understand what it all means. Readers should understand that the information contained in this post does not provide any legal advice and the best answers that they can get to their bankruptcy questions may come from bankruptcy attorneys.
However, one important concept that readers can learn about before filing for bankruptcy is liquidation. This post will only touch on the topic and further inquiry is encouraged for those who are considering filing for Chapter 7 bankruptcy.
Selling off property to satisfy creditors
Chapter 7 bankruptcy's liquidation provisions are premised off the idea that those who use Chapter 7 bankruptcy do not have disposable income to use to pay off their debts. Unlike Chapter 13 bankruptcy, which reorganizes an individual's income so that they may pay down their debts, Chapter 7 bankruptcy presumes that a debtor has no extra money with which to use to reduce their outstanding financial obligations.
When is a good time to estate plan for business owners?
The old adage of the only things guaranteed in life are death and taxes continue to be as true today as it ever was before. And, the realities of death have never been more acute than they have been in recent memory. This is why we often get questions from business owners about the best timing for estate planning.
When is the best time to estate plan for business owners?
Now! We never know how many days we have left on Earth. That is simply a fac of life. But, think about the effect the sudden loss of an owner or even a key employee, who knows all the ins and outs of a business. Think about the chaos that loss will invite. And, think about the family that is left behind to fight over that business. Would it survive? Would those family relationships survive? This is why estate planning, or more accurately, transition planning, is so important for business owners.
Three steps to take after you have executed your estate plan
You may have executed what you believe is a comprehensive estate plan including a will, living trust, power of attorney, advance medical directive and other important documents. But just having an estate plan is not the end of the story. There are additional steps to take to ensure your final wishes are carried out.
Communicate your intentions to your loved ones
If your loved ones do not know of your estate plan it can cause delays when it comes to carrying it out or it can lead to the mismanagement of assets. It is important to educate your loved ones about the contents of your estate plan as well as your intentions. This can avoid unwanted surprises upon your passing. Sudden wealth can lead to bad decisions, so if your heirs know well in advance what they are to inherit they can make plans to handle this windfall wisely.
Anticipate drama
Many families in the U.S. struggle with medical debt
The year 2020 was a tough economic time for many in Geneva, especially if they were furloughed or lost their jobs. This financial predicament was only escalated when they acquired a significant amount of medical debt that they have no means of paying back. They are not alone. According to U.S. Census Bureau data many families have problems with medical debt.
What is considered medical debt?
In 2017, 19% of households in the U.S. had some type of medical debt. Medical debt was defined as costs people could not pay up front or when they were treated. Of households carrying medical debt in 2017, the median amount of medical debt was $2,000. When households had significant medical debt, they may not have been able to afford the essentials such as food, utilities or their rent or mortgage. Moreover, medical debt forced some families to forgo necessary medical care because they could not afford it. Some people even filed for bankruptcy due to unmanageable medical debt.
From our office in Geneva, Illinois, we serve clients throughout the region, including the communities of St. Charles, Batavia, Aurora, Elgin, Elburn, Sugar Grove, North Aurora, South Elgin, West Chicago, Fox Valley, Winfield, Wayne, Big Rock, Naperville, Wheaton, and Downers Grove, as well as other municipalities in Kane County and DuPage County.
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