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Recent Blog Posts
Why bankruptcy may be your best hope
Oh, the shame. Imagine what people will say when they find out you are bankrupt. There is a stigma attached to bankruptcy, but there shouldn't be. Read the news, millions of people like you are losing their jobs, all across the world. Big-name companies are on their knees.
The difference between you and the big companies is that the government always seems willing to bail them out, using the taxes you and everyone else pay. Remember how the government bailed the banks out in the last recession? Did you see them doing that for people like you?
The world is not going to work if everyone files for bankruptcy continually, but you deserve a chance to start with a clean slate. Filing for Chapter 7 bankruptcy may be the answer.
What does a Chapter 7 bankruptcy do, and what does it not do?
- A Chapter 7 bankruptcy can clear your unsecured debts such as credit card debt and medical bills.
Can bankruptcy stop foreclosure?
You start getting foreclosure notices in the mail. It's no surprise. You lost your job and have not been able to make your mortgage payments.
When you tell one of your friends that you are worried you're going to lose your home, they tell you to file for bankruptcy. They claim that doing so will stop the foreclosure. Is this true?
It's not entirely true, but there is some truth within your friend's claims. A bankruptcy filing puts an automatic stay on all other financial legal actions pending against you, such as a foreclosure. This delays the case. It cannot move forward until you get through your bankruptcy case.
Now, a bankruptcy case may take months, and you get to stay in your home at that time. Plus, if your bankruptcy eliminates the other types of outstanding debt you have — credit card debt, etc. — then you may find that your mortgage is affordable again. You may be able to work out an agreement with your lender so that you do not lose your home after all.
Can you keep your home if you go bankrupt?
When financial pressures mount, the anxiety you feel can quickly escalate — especially if you're worried about losing your home. You think bankruptcy may be your only solution, but you hate the idea of giving up the home you've loved, tended and lived in for years.
Take heart. As long as you can afford the payments, there's a fair possibility that you will be able to keep your home. Here are some of the factors that will ultimately determine what happens:
- The value of your home: If you have a lot of equity in your home, that could be considered assets that can be used to pay off your debts — although exemptions sometimes apply.
- The type of bankruptcy you file: Chapter 13 bankruptcies are more flexible and let you reorganize your debt, while Chapter 7 bankruptcies do not. If you file Chapter 13, you may be able to keep your home even when it has a bit of equity.
Understand how bankruptcy might impact you
Life's circumstances sometimes aren't the best. When your money is impacted by things out of your control, you might feel helpless. You know that your bills need to be paid, but you don't have a way to make that happen. Your focus then becomes making sure that you're doing your best to take care of necessities. Other bills, such as credit cards and medical accounts, might go untouched.
For some people, the situation becomes too much to handle, and they know they need to do something. Filing for bankruptcy is one option that they have in these cases. Consumers will typically either file a Chapter 7 or Chapter 13. The primary difference between these two is that the Chapter 7 bankruptcy liquidates nonexempt assets and doesn't require the person to make any payments. A Chapter 13 liquidates some assets, but the person has to make payments to the bankruptcy trustee on a set schedule.
One benefit that both bankruptcy types offer is the automatic stay. Once you file, creditors can't contact you to demand payment. This puts a stop to phone calls and collection letters, so you can have peace of mind while you're getting your finances back in order.
Don't forget to update your beneficiaries
When it's time to update your will and your estate plan, take a moment to update your beneficiary designations, as well. This is something that people often forget, and it can prove very costly.
For instance, your life insurance company asked you to pick a beneficiary when you bought the policy. You probably picked a child or your spouse. That's what most people do.
Say that you chose your spouse, wanting to support them even if you passed away. However, you and your spouse have since gotten a divorce. You updated your estate plan to leave items to your children and cut out your ex. However, if you don't update that beneficiary designation, the life insurance payment could still go to your ex — and not your kids.
One potential issue here is that your beneficiary designations carry precedence over your will. People sometimes write in the will that they want to move the life insurance money to someone else, but they'd don't contact the insurance company to change their paperwork. The insurance company only cares about what they have on file. If it is in conflict with your will, they're going to ignore your will and follow the directions that you gave them specifically.
Questions to answer when choosing a guardian
You're a young Illinois couple, in perfect health and having a baby. You're focused on fixing up the nursery, buying the safest car seat on the market and picking a name. But there's one more thing all expectant or new parents must add to their to-do list: Choose a guardian in case the unthinkable ever happens.
Many young people probably haven't thought about creating an estate plan but having a baby makes it an essential. If the parents unexpectedly pass away without naming a guardian, courts will decide who should raise your child.
That should be a parent's choice.
When considering who to name as a guardian for your child, think about the following:
- Who will raise your child the way you would have? Who shares your personal values – the ones you'd like your children to learn? Who would mimic your parenting style?
Can you pass the Illinois means test for Chapter 7 bankruptcy?
Chapter 7 bankruptcy is the most aggressive and fastest kind of bankruptcy available to individuals and married couples. It also gets called liquidation bankruptcy, as the courts can order the liquidation of assets as a means of repaying creditors during Chapter 7 proceedings.
Typically, those who successfully file for Chapter 7 bankruptcy can receive a discharge after the courts review their request, all without any requirement to repay their creditors. As a result, there are very strict limitations on who can file for Chapter 7 protection. In order to prevent abuse of this form of bankruptcy, it is necessary for individuals to pass a state-based means test prior to filing.
How does Illinois' means test work?
The basic premise of a means test involves comparing the individual's adjusted income to the state median income for their household size. The individual filing can make certain adjustments or reductions to their overall income for certain expenses, meaning that those who are quite close to or just over the income limit may still be able to pass the means test.
Types of trusts and their uses
A will is an important part of any estate plan — but it doesn't have to be the focal point. Trusts have become increasingly popular vehicles for preserving wealth and passing it on to the next generation as people increasingly try to avoid the complicated (and expensive) process of probate.
There are a lot of different kinds of trusts out there, each suitable for different goals. If you're just starting to consider the usefulness of a trust as part of your estate plans, it may help to have a passing familiarity with the following kinds.
Revocable trusts
Revocable trusts are pretty much exactly what they sound like: You retain control over them during your lifetime and can end them at any point. Their chief advantage is their flexibility — and the fact that the assets inside them are distributed according to the trust's terms without going through probate.
Irrevocable trusts
3 compelling reasons to start estate planning instead of waiting
The creation of an estate plan or last will is an important protection for both you and the people you love. Far too many people make the preventable mistake of delaying the creation of their estate plan indefinitely, which may mean that they died intestate or without a last will.
There are many different reasons why creating a last will sooner rather than later will benefit you, but there are three benefits that are nearly universal reasons to start estate planning now.
Your legacy may be how people remember you
You want to make a profound and lasting impression on people while still alive. Your legacy could include your professional, artistic or academic works, your family, or local community contributions, such as volunteerism or donating to charity.
While you can't control how people perceive you, you can control the legacy you leave behind when you die. The creation of an estate plan that considers the needs of the people you love and the change you like to make in the world can leave a lasting positive impression. From funding a trust to pay for your children's college to leaving money for a charity about which you are passionate, the options for your legacy are nearly endless.
Who handles the responsibilities for your estate?
Estate planning is never on anybody's list of “favorite things to do,” but it's really important to have those plans in place — just in case something happens. However, choosing the right people to manage those responsibilities can be complicated, especially if you don't know what each person is supposed to do.
Here's what each person involved in your estate will need to do:
The executor
Your executor is the person who acts as your personal representative. Their job is to secure your assets, pay your debts and follow the distribution guidelines of your will. While that sounds fairly simple, it can sometimes put them into conflict with family members (especially if they aren't happy about the will). A good executor is someone who lives close enough to be practical and well-trusted.
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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