• Medical Bills Force US Congressman to Sell DC House

    We have been recently writing about the impact that foreclosures have had on Chicagoland families, but the Washington Post reported on September 19, 2012, that Illinois’ US Representative Jesse Jackson Jr. is selling his Washington DC home for another reason: medical bills .

    “Like millions of Americans, Congressman Jackson and Mrs. Jackson are grappling with soaring healthcare costs and are selling their residence to help defray costs of their obligations,” Jackson aide Rick Bryant said in a statement, according to the Post. “The Congressman would like to personally thank everyone who has offered prayers on behalf of his family.”

    The Post reported that the 47-year-old congressman has not been seen on Capitol Hill since returning home after seeking treatment at the Mayo Clinic in Minnesota for depression. The news website Politico reported that while “reports of the home sale fueled speculation about his political future, his office has insisted that he plans on staying in office and will run for re-election in November.”

    As we have noted before, substantial debt from medical bills remains one of the most common reasons that people file bankruptcy. We will further discuss how nearly 44 million Americans are struggling with health care expenses in our next blog post, but you should know that you may be able to reduce your medical bills by filing Chapter 13 bankruptcy or eliminate them by filing Chapter 7 . Our Chicago bankruptcy lawyers can help you get started when you contact our firm at (866) 930-7482 or fill out the form located on this page.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • ‘Hidden Time Bomb’ Could Leave Thousands of Homeowners with Hefty Tax Bill

    We mentioned on Wednesday that one benefit of filing Chapter 7 bankruptcy is the elimination of tax liability on a mortgage deficiency. However, the Los Angeles Times reported on September 7, 2012, that many struggling homeowners could be facing a very unwelcome bill next year. When Congress passed the Mortgage Debt Forgiveness Act in 2007, the legislation forgave debt for declines in homeowner’s financial conditions or drops in home values. However, the Times noted that the exemption-as much as $2 million per household in principal reduction and other aid from banks-is currently set to expire at year’s end. As a result, the homeowners who obtained reductions in in their mortgage debt could receive a bill for taxes on that aid.

    “The expiration of that provision is a hidden time bomb,” Representative Jim McDermott told the Times.

    As the Times noted, mortgage debt forgiven by a bank as part of a principal reduction, short sale or foreclosure needs to be reported as income by the homeowner and is subject to taxes. Furthermore, nearly 140,000 homeowners who received some type of relief under the $25 billion foreclosure settlement reached last year with the nation’s five largest banks could also find themselves owing taxes. According to the Times, a middle-class household would owe 25 percent taxes on that relief. With the relief averaging about $76,615 for each household, the Times said the taxes would be around $19,000 for the average settlement relief so far. Additionally, the Times said the tax “would go up if the relief pushes the homeowner into a higher tax bracket or if the Bush tax cuts expire, as they are set to do at year’s end.”

    If you are among the thousands of Illinois homeowners who are in desperate need of foreclosure help , it is in your best interest to take action immediately. Our Chicago bankruptcy lawyers can help you determine whether Chapter 7 or Chapter 13 bankruptcy provides you and your family the most relief, and we can get started as soon as you complete the form located on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy attorneys