Filing for bankruptcy in Chicago does not mean that you lose your home. You can often maintain your home by making current payments under either chapter 7 bankruptcy or chapter 13 bankruptcy. If you do wish to surrender your home and you have filed chapter 7 bankruptcy, you still have time in your home. Under+ Read MoreThe post How Filing For Bankruptcy In Chicago Intersects With Foreclosure appeared first on David M. Siegel.

There are times when filing chapter 7 bankruptcy would be a mistake. The most common type of mistake made in filing a chapter 7 bankruptcy is the fact that assets are going to be taken by the chapter 7 trustee. In the state of Illinois, you are allowed to protect a certain amount of property+ Read MoreThe post When Not To File Chapter 7 Bankruptcy appeared first on David M. Siegel.

Filing Chapter 7 bankruptcy can eliminate most unsecured debt. Unsecured debt is debt that is not secured by any kind of property. This means that if you don’t make a payment, there is no property that can be taken back by the creditor. Unsecured debt is typically credit card debt, medical bills, utility bills, and+ Read MoreThe post What Type Of Benefits Can Be Achieved Through Filing Chapter 7 Bankruptcy? appeared first on David M. Siegel.

Filing bankruptcy in Chicago  is not too difficult provided that you have proper representation and a good foundation going forward. You are going to want to find an experienced bankruptcy attorney to assist you in the filing of your chapter 7 bankruptcy case. Do not choose a bankruptcy attorney simply based on the lowest price.+ Read MoreThe post How Hard Is It To File Bankruptcy In Chicago? appeared first on David M. Siegel.

CREDIT One of the biggest concerns that I hear from clients who are interested in filing for bankruptcy is whether or not they’re going to be able to get credit again in the near future. It’s amazing that someone who is struggling financially will worry about future credit before they have even gotten out of+ Read MoreThe post Concerns From A Person Filing For Bankruptcy appeared first on David M. Siegel.

What we know so far about domestic support obligations in bankruptcy is that they are non dischargeable and the bankruptcy court has the last word as to what is and is not support. But we just scratched the surface in looking at support when we considered obligations from one spouse to another. Debts owed to an extended cast of supporting characters may be “support” as well, non dischargeable and carrying a priority for payment. Supported party’s professionals While support to a former spouse may be a monthly obligation, don’t overlook family court orders that one spouse pay a fixed sum to the other party’s lawyer.  If based on need or disparity between the financial capacity of the spouses, that award of the other party’s attorneys fees  may be in the nature of support as well.  Anderson, 300 B.R. 831 (WD NY). You can expect that attorneys fees incurred to establish, modify, or collect support will themselves be found to be in the nature of support. Professionals appointed to represent the interests of minor children may have claims that are in the nature of support.  In Chang, the 9th Circuit held that the state court order requiring payment by the debtor to the child’s guardian ad litem was non dischargeable support, despite the fact that the statute on its face speaks of debts owed “to” a spouse or child.  The nature and purpose of the fees here were held to be a debt to the child.  Chang, 163 F.3d 1138 (9th Cir. 1998). Payments to other third parties Bankruptcy courts have found that judgments requiring payment by the debtor of obligations to third parties whose claim arose quite outside the divorce proceeding to be support: Mortgage payments:  debt service on the house the ex spouse lives in may be support.  Maitlen, 658 F.2d 466 (7th Cir. 1981). Payment of spouse’s debts:  obligation may be support despite label as “property settlement”.  Williams, 703 F.2d 1055 (8th Cir. 1983) Educational expenses of children: such obligation may be support even if the expenses will be incurred after the offspring reaches the age of majority.  Boyle, 724 F.2d 681 (8th Cir. 19840 Public benefits provided children  State’s claim to recover overpayment in aid to children held to be DSO; Anderson 439 BR 206.  watch also for govermental expenses for children in protective or punitive custody. Why the determination may not matter Having spent all this time working out whether a debt is support, and therefore non dischargeable, in many of your cases for a debtor in a no asset  Chapter 7 case, it doesn’t matter. Enter Section 523(a)(15), making non dischargeable debts  to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit; So, if the debt is incurred to (or “for the benefit of”  we can add in light of the case law) a spouse or child in the course of a separation or divorce, it isn’t dischargeable, regardless of its characterization. But, wait! wait!  There’s more: Section 523(a)(15) isn’t included in the debts not dischargeable in Chapter 13! So, the issue of whether an obligation is a domestic support obligation is chiefly important in Chapter 13, where it would be dischargeable without necessarily being paid in full, or, in a Chapter 7 asset case, where the non dischargeable support obligation might be paid in full or in part. With that, we’ll call it quits, and take up more about family law in bankruptcy cases another time. The Bankruptcy Family Law Series:  ♦ Spouses as source of Conflicts   ♦ Starting with support Image courtesy of Wikimedia.

The starting place for our exploration of bankruptcy and family law is support. Whether it’s called alimony, maintenance, or support, any amounts due at the commencement of a bankruptcy case are non dischargeable. Actually, since BAPCPA, it’s called a domestic support obligation.  It got a statutory definition, as well: (14A) The term “domestic support obligation” means a debt that accrues before, on, or after the date of the order for relief in a case under this title, including interest…  that is— (A) owed to or recoverable by— (i) a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative; or (ii) a governmental unit; (B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child’s parent, without regard to whether such debt is expressly so designated; (C) established or subject to establishment before, on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of— (i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and (D) not assigned to a nongovernmental entity…   §101(14A) Section 523(a)(5) makes a domestic support obligation non-dischargeable.  That message is echoed in §1328(a)(2). So, if it’s a domestic support obligation, it can’t be discharged. Is it really support Just when it looked simple, you need to acknowledge the power of the bankruptcy court to look past the labels that the former spouses or the family court attached to an obligation.  Those labels don’t necessarily control the characterization of a debt. For example, in Shaver, 274 F.2d 1314, the 9th Circuit upheld a Montana bankruptcy court dealing with a divorce decree entered in Indiana, by which the non debtor spouse got $197,000 payable over 10 years in satisfaction, said the decree, of the wife’s “marital and dower rights”.   Payments would end if the wife died during that 10 years.  Despite the label, it was non dischargeable support said the court. Likewise, the debtor’s divorce obligation to pay the taxes on the half of his military retirement benefits awarded to his wife of 31 years was likewise found to be in the nature of support when the debtor filed Chapter 13.  Denis, 25 F.3d 274. Even in the face of a state court denial of spousal support in a short term marriage, the 9th Circuit BAP found that the award to the non debtor spouse of  $185,000 in attorneys fees incurred in a custody battle to be in the nature of support.  Gionis, 170 B.R.  675. Bankruptcy courts will generally look at both the intent of the parties, the function the payments serve, and any events that terminate the obligation to pay, such as remarriage or death in determining if an obligation is support. No relief from existing order Clients sometimes appear with an old support order on which there is an outstanding balance.  Despite changes in the spouses’ relative prosperity since the order was made, your prospective client has not returned to family court to get relief from the support order. The client is unlikely to get relief from that order in bankruptcy court.  While bankruptcy courts are not constrained by collateral estoppel when it comes to the characterization of payments flowing (or not flowing) between ex spouses, the bankruptcy court will not typically revisit the amount of the periodic obligation. If such relief is necessary, it has to be obtained from the family court or the party to whom the support is now owed. Next time, we’ll look at the bankruptcy treatment of amounts owed to attorneys and other professionals as a result of proceedings in family court. Image:  Fotolia.com 

Rebuilding after bankruptcy is a process. It starts with not incurring any negative credit after such time you file for bankruptcy. For example, after your bankruptcy case is over, you want to make sure that you do not incur any negative credit items on your credit Bureau. This would include not falling behind on any+ Read MoreThe post How To Rebuild After Filing For Bankruptcy? appeared first on David M. Siegel.

Being a bankruptcy attorney is a unique situation.  It is one of the few areas of law where the attorney can actually assist the client and at the end of the service, the client is 100% pleased with how everything went. In most areas of law, whether it be contract law, divorce law, criminal law,+ Read MoreThe post Why I Love Being A Bankruptcy Attorney In Chicago appeared first on David M. Siegel.

If you are someone who is considering filing for bankruptcy, then the most important decision that you’re going to make in that process is deciding which attorney you are going to hire. In some cities, there are literally hundreds of bankruptcy attorneys that are advertising their services in directories, on the Internet, and newspapers. But+ Read MoreThe post Helpful Tips To Select A Bankruptcy Attorney appeared first on David M. Siegel.