Blog

Many individuals experiencing debt problems have deep moral or religious concerns regarding filing for bankruptcy. Consolation may be found in understanding a good deal of our modern bankruptcy laws evolved directly from the teachings of the bible. The "seven year rule" respecting the discharge of debts stems from the "Lord's Release" in the bible. In Deuteronomy, it was mandated that debts be forgiven every seven years, regardless of a person's circumstances. Deuteronomy 15: 1-3 ("At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor or his brother, because the Lord's release has been proclaimed".) Congress codified this biblical provision in the Bankruptcy Act of 1938 whereupon an individual could receive a discharge under Chapter 7 bankruptcy once every seven years. It has been changed twice since and is now eight years. Congress actually chose the number "7" to assign to "Chapter 7" of the Bankruptcy Code out of respect for the biblical precepts. The seven year rule is again proclaimed in Exodus 21:2. The Old Testament also made provisions for debt forgiveness as the year of Jubilee wherein debts were to be forgiven every 50 years. Leviticus 25:10-13. The New Testament reinforces the principles of debt forgiveness. The Lord's Prayer as taught by Matthew provides that we seek to "Forgive our debts, as we forgive our debtors." Mathew, 6:12. The importance of debt forgiveness is reinforced in Mathew 18: 21-35. Jesus promoted debt forgiveness when he punished the "money changers" (lenders) by removing them from God's temple. John 2:14-21. Jesus also said that for those who lend and expect nothing in return, their "reward shall be great." Luke, 6:34- 35. In bankruptcy, we have codified exemptions to prevent certain assets from being seized by creditors. Many of these modern exemptions also stem from the Bible. For instance, we have exemptions for: 1) necessary wearing apparel. Exodus, 22:26-27; Deuteronomy, 24:10-13; 2) tools of the trade. Deuteronomy 24:6; and 3) wages earned, but not yet paid. Deuteronomy 24:14-15, 17; Leviticus, 19:13. Finally, the Bible is replete with provisions showing compassion for debtors and admonishing heavy handed tactics from creditors. Deuteronomy, 15:7-10 (If a man is poor, do not be hardhearted or tightfisted toward him.); Psalm 15:5 (A righteous man lends money without "usury" - the charging of interest on a debt.); Deuteronomy 23:19 ("Thou shall not lend upon usury to thy brother."); Nehemiah 5:3-13 (pursuing relief from enforcement of mortgages on the homes and possessions of the Jews); Exodus, 22:25, Ezekiel, 18:13, 22:12, Leviticus, 25:35-36, Psalm: 15:5 (condemning the practice of usury). In some form or another, all major religions, including Christianity, Judaism, Hinduism and Islam prohibit usury by lenders while promoting compassion for debtors. Similarly, all religions value family preservation far more than repayment of debts. If you are confronting a moral dilemma with the prospects of seeking relief from your debts through bankruptcy, you may find great solace in the Bible or through prayer. A trusted minister or spiritual advisor is often a great source to turn to for a second opinion. The positive reinforcement can be truly uplifting.  Free Consultation With a Lawyer Contact us today for more information about your debt reduction options. We have offices in Carbondale, Marion and Mt. Vernon, Illinois, to serve you. Evening and weekend appointments are available. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

When it comes to bankruptcy in Centralia and other towns in Southern Illinois, not all debt is considered equal. Some creditors will be paid back first while others will get what’s left over, if anything. Understanding the type of debt and creditors you have is important to understanding your bankruptcy. An experienced bankruptcy lawyer can examine your situation and explain how best to proceed. These are the debts in bankruptcy: Priority debts in the Chapter 13 Bankruptcy include costs and fees associated with the Chapter 13 filing, some tax debts and domestic support obligations. These debts are the first to be paid from a repayment plan. Secured Debts are debts due and owing on a mortgage or car loan and are otherwise known as “collateralized debt.” It is very common for a Petitioner to utilize the automatic stay imputed in a bankruptcy filing to stop the foreclosure or tax sale of a home or a repossession of an automobile. The Chapter 13 Bankruptcy Plan shall provide for payment of any delinquency and/or principal balance on the secured asset (home or automobile). Unsecured Debts are the last to be paid in a Chapter 13 Bankruptcy Reorganization. The payment of unsecured debts is based on the Petitioner’s affordability. Unsecured debts, include credit cards, personal loans, deficiencies, most judgments, medical bills and many other debts. One of the greatest benefits of Chapter 13 bankruptcy is the ability for a Petitioner to minimize, based on affordability, monthly payments to unsecured creditors. At The Bankruptcy Clinic, we can help you get out from under crushing debt obligations. Whether it’s Chapter 13 or Chapter 7, we will work to find the best solution for your debt problems. For a free consultation in Carbondale, Mt. Vernon, or Marion, contact The Bankruptcy Clinic today.

When a debtor in Anna, IL files bankruptcy, the trustee and creditors will look for pre-filing sales and transfers that might be considered an abuse of the bankruptcy system. One type of questionable transfer involves fraudulent conveyances. In anticipation of bankruptcy, some debtors may try to hide certain assets or sell them off to friends or family for less than fair market value. In either case, the trustee can recover these assets for liquidation to pay towards the creditors in a Chapter 7 bankruptcy. In order to prevent this problem, it is best to speak with a bankruptcy attorney before selling or transferring property to anyone. There are two types of fraudulent conveyances, actual fraud and constructive fraud. Actual fraud occurs when property is transferred within four years of the date of filing and is made with the intent to defraud or hinder creditors. An example might be a man who has $65,000 in debt, but has $10,000 in a money market account. In order to prevent creditors from seizing this account, he transfers the money market proceeds to a friend. This may be considered actual fraud since he made this transfer with the intention of preventing creditors from seizing it. Constructive fraud occurs when a person sells property for less than a “reasonably equivalent value” and has debts outstanding at the time this transfer was made. There does not need to be any intent to defraud in this situation. An example might be a man who owns a classic car worth $10,000. He sells the car for $4,000 to a friend out of desperation in an effort to pay down the debt. If the amount received for the car was less than its reasonably equivalent value, the trustee may be able to prove constructive fraud and reverse the transfer.  The bankruptcy attorneys at The Bankruptcy Clinic can examine any transactions you have made prior to filing bankruptcy to ensure they were done properly. If it appears certain transactions are suspect and might constitute a fraudulent conveyance, we can fully explain your options. With offices in Marion, Carbondale, and Mt. Vernon, we are convenient to anyone in Southern Illinois. For a free consultation with a bankruptcy attorney, contact The Bankruptcy Clinic today

What Might Keep Me from Qualifying for a Chapter 7 Bankruptcy in Centralia IL? There are situations where a person may not be eligible for a discharge in a Chapter 7 bankruptcy. For instance, if a person has received a discharge in a C  hapter 7 case filed in the last eight years, or a Chapter 13 filed in the last six years, he or she will not be eligible for a Chapter 7 discharge. In those instances, a Chapter 13 may be more appropriate. Some may wonder if there is a minimum amount of debt required to file a Chapter 7. There is no minimum amount. What might be a seemingly small amount of debt to some may be an insurmountable amount of debt to someone else on a reduced income. It all depends on a person’s unique situation. One element that is required for a discharge in a Chapter 7 is that the debtor act in good faith. For instance, if one attempts to abuse or exploit the bankruptcy process, the bankruptcy court may deny the debtor a discharge. Similarly, if a person attempts to conceal an asset or incur sizeable debt in anticipation of a bankruptcy, he or she may be denied a Chapter 7 discharge on some or all of the debts. Another requirement a person must pass is the means test. This is an objective examination of a person’s income factored against allowable expenses to determine if a debtor has the “means” to at least pay back a portion of the debt. If a person makes more than the median income based on their place of residence and family size, there might be a presumption that the person is abusing the bankruptcy process by filing a Chapter 7. In such a case, a Chapter 13 partial repayment may be more appropriate. Our bankruptcy attorneys can examine your financial situation to determine exactly where you stand on the means test and advise you of your best options. At The Bankruptcy Clinic, we have helped thousands of clients discharge overwhelming debt. We understand the stress caused by debt problems. We work to provide both debt relief and stress relief for our clients. If you feel your debt problems have grown out of control, contact an attorney at The Bankruptcy Clinic today for a free consultation.

The Affordable Care Act is now in its second year and more people have insurance coverage than before this law was passed. Unfortunately, it did not completely end problems associated with medical coverage. People still have to dip into their pocket to pay for deductibles and out-of-pocket expenses to pay for medical care. Those bills can be substantial. For someone barely holding on, this new expense could push them over the edge. Fortunately, bankruptcy exists to help a person get their debts in order. If you have suffered a serious injury and now have medical debt, a bankruptcy lawyer may be able to help. Medical debt is considered unsecured, non-priority debt which means it can be discharged in Chapter 7 bankruptcy. This is good news for someone who meets the qualifications for Chapter 7. A bankruptcy lawyer can discuss your situation with you to determine if this form of bankruptcy is best for you. If you do have these bills, it is best to first speak to the hospital or insurance provider to see if you can work out a payment plan. They may be willing to set up a plan to allow you to pay off this debt over time. If you are working and can afford these payments, this might be the best option for you. But if your medical problems are preventing you from working or are just too much to handle, you have options. At The Bankruptcy Clinic, we know how difficult it can be to suffer a serious medical problem. If you live in Anna, IL. Centralia, IL. Or Harrisburg, IL we can help! When a person is sick or injured, they often can’t work. When you combine this with a large bill from medical providers, this is a recipe for disaster. We can explain your options and find the right solution for you debt problems. For a free consultation to discuss your situation, contact The Bankruptcy Clinic today.

Some clients come to speak with a Anna Illinois Bankruptcy Lawyer about liens. A lien is a legal claim filed against a piece of property to secure a loan. With a car loan, for instance, the lender will assert a lien against the vehicle. The same is true of a mortgage, where the lender will place a lien on real estate. These liens generally survive a Chapter 7 case unless the property is sold or returned to the lender. Other types of liens, such as those placed on pre-owned household furnishings, can be removed or stripped off in a Chapter 7 or Chapter 13 bankruptcy, Stripping Real Estate Liens through Chapter 13 with a Anna Illinois Bankruptcy Lawyer Some liens on real estate, such as a second or third mortgage, can be stripped off or stripped down through a Chapter 13. If the lien is on a primary residence, a lien can be stripped off only if it can be proven the value of the home is fully encumbered by a first or primary mortgage. Lien stripping rules are more liberal for the debtor if there is collateral other than just a primary residence pledged. If a lien can be stripped off or stripped down, the balance of the loan will be treated as unsecured. It can then be reduced and/or discharged in the bankruptcy. Lien removal can be a tremendous benefit for a homeowner in that it can completely eliminate mortgage payments – something that might prove to be the difference in saving a home. Properly addressing liens and understanding how to treat secured property is a critical aspect of bankruptcy practice. In speaking with a Anna Illinois Bankruptcy Lawyer , we can help you determine if a lien removal might be feasible through a Chapter 13. We can also explain alternatives available through a Chapter 7. By fully understanding your options, you’ll be sure to make the right decision for you and your family. At The Bankruptcy Clinic, we work to ensure you can keep your most valued possessions while taking control of the debt. To learn more about how a Anna Illinois Bankruptcy Lawyer can help with your secured debt problems, contact The Bankruptcy Clinic today for a free consultation.

While some people may automatically assume Chapter 7 is the best bankruptcy option, there are a number of consumers who are better served through Chapter 13. This form of bankruptcy lets a person keep their assets while making payments over a period of time (typically 3-5 years) to the bankruptcy trustee. This trustee then uses that money to pay back creditors. When the bankruptcy period is complete, unsecured debt is discharged and the creditor can no longer collect on that loan. A Centralia IL Debt Management Attorney can discuss your particular situation and determine which bankruptcy option is the best for you. Centralia IL Debt Management Attorney on Filing Bankruptcy as a Homeowner Many people who choose to file Chapter 13 bankruptcy are homeowners who face foreclosure. In this case, some of the benefits to filing include: Automatic Stay, allowing a person to remain in their home for a period Stripping of second and third mortgages Potentially allowing a person to catch up on any arrearage while making their mortgage payments This last option is potentially the best reason for a homeowner to file Chapter 13 instead of Chapter 7. If a person makes enough income to pay any passed-due mortgage payments while staying current during the bankruptcy proceedings, they can stay in their home when their bankruptcy is complete. A Centralia IL Debt Management Attorney can discuss your income and find whether you have the means to make these back payments as well as your current mortgage payments. If you are a homeowner or someone with other assets you don't want liquidated, there is still relief for your debt. A Centralia IL Debt Management Attorney can discuss your options and find a solution that can let you live stress and debt free. To learn how bankruptcy can give you a fresh start, contact a The Bankruptcy Clinic today. Home if foreclosure? Contact a Centralia IL Dept Management Attorney Call the Bankruptcy Clinic today at (618) 549-1100

Most people in Centralia Illinois don’t closely monitor their credit. They assume everything reported to the reporting agencies is accurate. Only after attempting to make a major purchase on a car or a home does one learn there is a problem. By annually checking your credit report, you can be sure it is accurate and does not contain major errors or problems. This way, when you do make that big purchase, you won’t suffer an unexpected surprise. Every American has the right to check their credit report from the three major rating agencies once every 365 days. It is highly encouraged people take advantage of this. Identity theft is a growing problem. In addition, many creditors report false or incorrect information on your credit report purely by accident. This can unnecessarily drag down your credit score. Since it can often take months to clear up issues like this, it is best to get these corrections identified and remedied as quickly as possible. Some might hesitate to check their report out of fear that checking it might bring their credit score down. While it is true that inquiries do play a role in determining your credit score, the reporting agencies generally only count “hard” inquiries. These are inquiries by third parties for new lines of credit on a car, credit card, mortgage, etc. When you check your own credit report, this is a “soft” inquiry and generally has no impact on your credit score. If you want to obtain a free copy of your credit report with no strings attached, the only reporting agency we would recommend is Annual Credit Report.com (www.annualcreditreport.com). Many other providers purport to be “free”, but require you to pay for ongoing credit monitoring services. If you find, however, your debt problem is worse than you can manage, it may be time speak with a bankruptcy lawyer. When we file your case, we run your credit report for you. We provide you a complimentary copy of your report, your current credit score, AND your estimated credit score one year following your bankruptcy filing. It has been our experience that the vast majority of our clients do have improved credit scores one year following their bankruptcy filing.  At The Bankruptcy Clinic, we can examine your debt situation and work to find the best solution for you and your family. If you have an unmanageable debt problem, contact The Bankruptcy Clinic today for a free consultation. We proudly serve the Centralia Illinois area

Foreclosure can be a daunting experience. A home is often our most valuable asset. It is the symbol of the American dream, and oftentimes, the most expensive purchase we will ever make. Unfortunately, some homeowners suffer a setback such as a job loss, divorce, illness or unanticipated event which might make it difficult to keep current on house payments. After falling behind by more than two months, the bank may then refuse to accept further payments, and instead, refer the matter out to their attorneys for foreclosure proceedings. If you are behind on your mortgage, there may be options available outside of bankruptcy. For instance, a lender may be willing to renegotiate the terms of the mortgage. Although a bank is under no obligation to renegotiate terms, it would often seem in their best interest to at least consider it. Once a foreclosure starts, however, it can be very difficult to stop in the absence of filing a bankruptcy. Through a bankruptcy proceeding, we can take steps to delay or stop a foreclosure altogether. Our experienced attorneys can explain your options and help you make the right decision for you and your family. By filing a Chapter 13, we can stop a foreclosure completely. The homeowner is then afforded an opportunity to catch up on the arrearage owed on the home in a structured manner over an extended period of time. A Chapter 13 bankruptcy can also be utilized to strip a second or third mortgage from a home in certain situations. If it is not cost effective to save a home through a bankruptcy, the automatic stay will still provide a homeowner with additional time to save money for the expenses associated with moving and establishing new living arrangements. At The Bankruptcy Clinic, we have helped countless clients throughout Murphysboro Illinois save their home from foreclosure proceedings. We understand how difficult this time can be and how much stress it places on a person. We work hard to keep our clients in their homes whenever it is feasible and in their best interest to do so. To speak with an attorney about your situation, contact The Bankruptcy Clinic right away.