• Questions to Ask Yourself Before Filing Bankruptcy

    If you are like most people, you like to pay your bills on time, fill up the gas tank when it gets low and enjoy happy hour with friends and co-workers. However, sometimes, life in Chicago goes sideways. Suddenly, bills are unpaid, late fees are accruing and things are getting out of control. You may think that filing bankruptcy is the best thing to do to buy some breathing room.

    Money Crashers reports that bankruptcy can save you money, provide peace of mind and get you back on track, financially. However, it is not always the right step. In addition to having a huge impact on your credit score, it can be expensive. At Benjamin Brand, LLP, we often help our clients decide if bankruptcy is right for their circumstances.

    Filing Chapter 7, 11 or 13 can have long-term effects on many aspects of your life. You may not be able to buy a new car, get a mortgage or pass the background check for a new job. Unfortunately, waiting until you’re completely broke before declaring bankruptcy can also work against you. Here are some questions to ask yourself when the bills are piling up, and you’re not sure if bankruptcy is right for you.

    Do you know where your money goes?

    If you don’t follow a budget, you may not know where your money goes on payday. How much of it goes toward bills such as utilities and rent? How much goes towards food? Do you have a car that guzzles gas? Tracking your expenses by using a budget program can help you see where your money goes and shows you how to make small changes that can make a big difference.

    Can you find the money another way?

    Picking up a second or third job may not be on your list of favorite things to do. If it’s temporary and it can help you get the breathing room you need, it may be worth it. Getting a part-time job and putting that paycheck toward bills can put a big dent in your debt.

    Is your situation temporary?

    Life happens! Unemployment, illness and other events can drain your bank account quickly. If you’ve lost your job, do you qualify for unemployment? What are your new job prospects? Consider waiting a few months to see if your situation improves.

    Have you approached your lenders?

    Lenders don’t want you to lose your house or file for bankruptcy. Many have programs you may qualify for that can help you stay afloat without filing for bankruptcy. Loan modification programs for Chicago mortgages and low fixed rate interest on credit cards can lower payments. These programs may change your repayment schedule or tie your payments to your income level. In either case, these options can help you preserve your credit score and still save you money.

    Have you tried credit counseling?

    Consumer credit counseling agencies can help you negotiate with lenders, create a realistic budget and help you develop a pay-down plan. There are many shady firms out there, so check with the Department of Justice for approved agencies so that you get the help you need, not a scam.

    Filing for bankruptcy is a time-consuming process, and it requires that you meet specific requirements. It can also affect your day-to-day life, ensuring your disposable income goes to pay debts. The court has strict guidelines about what is considered “disposable.” Talking with an attorney experienced in bankruptcy and foreclosure can help you determine if bankruptcy is right for you, based on your circumstances. 

    Located west of the Circle Interchange, our office is easily accessed from S Morgan St off I-290. There is street parking on Jackson Blvd and S. Morgan St. There is also pay for parking at 222. S Sangamon St, across the street.

  • What to Look for in a Student Loan Repayment Plan

    If you are an Illinois student entering your college senior year this month, congratulations! With only two semesters left, you are about to embark on the rest of your life. You may already be worried about how you’re going to make student loan payments in 2020. For those with federal student loans, there are several repayment plans. At Benjamin Brand, LLP, we are experienced in handling federal student loan issues and helping clients get back on track with payments that fit your budget and your life.

    Nearly two-thirds of all college graduates finish school with $30,000 or more in debt. Choosing the right plan for repaying student loans can make the difference between being able to afford the monthly installment and debt that escalates and balloons out of control. Although it may be tempting to choose the plan that gives you the lowest required payments and be done with it, that may not be best for your long-term goals.

    The first payment is due six months after you leave school, whether you graduate or not. If you do nothing, you will be placed on a standard repayment plan. This is your student loan amount and interest added together then divided into 120 installments, which is 10 years. For example, if you have $60,000 in loans, the payments will be in the vicinity of $515 per month, depending on the actual interest rate.

    If you prefer a different payment option, you should apply 46 to 60 days before the bill is due. If you graduate in May, the first bill is due in November, which means you should plan on addressing the plan options in September. A lot can happen in ten years and you can switch plans as needed. Re-evaluating your needs every few years, or when there is a major life event, such as a wedding or new job, can help you maintain control over your student loan debt.

    For federal student loans, there are currently eight repayment plans. However, if you have private loans or you are a parent with PLUS loans, there are not as many options. Typically, you cannot alter payment terms with private loans, unless you default. An attorney with experience in student loan law can help you select the terms that help you pay off your loans and preserve your credit.

    We help clients with student loan debt, avoid foreclosure and assist with filing bankruptcy. Our Chicagoland offices in the West Loop area are near loft residences, shopping and professional services near West Jackson Blvd and Morgan Street. Contact us or call 312.853.3100 to learn more about or to schedule an appointment.

  • Can Bankruptcy Discharge Tax Debt?

    Bankruptcy can help Chicago businesses and individuals that cannot pay their debts. Three common bankruptcy codes set the rules, and each deal with debt differently. However, whether you file Chapter 7, Chapter 11 or Chapter 13 depends on how much you will be required to pay, and which debts are forgiven. At Benjamin Brand, LLP, we assist clients in filing bankruptcy and finding the best solution to save your home.

    Credit Karma reports that most unsecured debt can be discharged, such as personal loans and credit card debt. Other forms of debt, such as Chicago child support, alimony and student loan debt, cannot be excused. Mortgages and car loans may or may not be discharged, depending on the type of bankruptcy you file. Tax debt is a bit more complicated.

    Requirements for Discharging Tax Debt

    The court considers three factors for discharging tax debt:

    • Taxes must be assessed within 240 days before you file.
    • Bankruptcy cannot forgive taxes until three years after they are due.
    • A tax return must be filed for the taxes owed at least to years before filing for bankruptcy.

    Even though bankruptcy is supposed to help you get a fresh start, it can affect more than your credit scores. If you tried to avoid Illinois or Federal taxes, they and any applicable penalties are not discharged. Income taxes can be forgiven under very limited circumstances. It should be noted that even if taxes are discharged, there may be tax liens that must still be paid. In situations where the lien is recorded before you file bankruptcy, it may be impossible to sell your property until the debt is settled.

    Filing Returns After Filing Bankruptcy

    Although you may be able to deal with past tax debt through filing bankruptcy, it does not protect you from current or future IRS obligations. Tax returns are due as usual, either on time or by submitting an extension. Taxes and bankruptcy are both complex issues. You don’t need to tackle them alone. Working with a Chicago attorney can help you choose the right type of filing for your needs.

    Located in the Heart of Chicago’s West Loop

    Our West Jackson Blvd office is convenient to 1000 W. Adams Condo Association, Brooklyn Boulders Chicago and a broad range of retail locations, so you can make an appointment to discuss your situation and still finish your errands. Contact us today or call 312-853-3100

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