Homeowners Facing Foreclosure Should Know Three Benefits to Chapter 7

On Monday, we discussed Illinois having the highest foreclosure rate in the nation in August and talked about some of the benefits that a Chapter 13 bankruptcy offers for homeowners needing foreclosure help . As we said on Monday, Chapter 13 certainly has its perks for individuals who have a reliable source of income and are determined to save their homes, but what about people who do not have the necessary income for a repayment plan or understand that they can no longer afford their homes?

Chapter 7 bankruptcy is another option for these homeowners. While a Chapter 7 filing will not save an individual’s house, it does allow people to:

  • Live rent-free for a few months – While most Chapter 7 cases do not take more than four months to complete, individuals filing Chapter 7 can stay in their homes during this time. This gives people filing Chapter 7 the time they need to find somewhere else to live, but it also lets them save the money they may need for the transition. This aspect is especially important nowadays because last month, Crain’s Chicago Business reported that average apartment rents per square foot both downtown and in the suburbs had hit all-time highs.
  • Cancel most or all of their debt – Chapter 7 wipes out unsecured debts, such as credit card bills and medical bills. While it cannot erase certain debts such as child support or student loans, Chapter 7 can be beneficial for homeowners facing foreclosure because it eliminates their responsiblity for the deficiency balance (the difference between what the homeowner owed and what the house sold for at foreclosure).
  • Eliminate tax liability – The Internal Revenue Service (IRS) cannot tax an individual on a discharged deficiency balance. Filing Chapter 7 exempts that individual from tax liability for the discharge of his or her home loan, and we will further discuss tax issues facing struggling homeowners in our next blog post.

Again, Chapter 7 bankruptcy has a lot of upsides for individuals who are ready to give up their homes because of foreclosures. You need to pass the bankruptcy means test before you can file Chapter 7, and our Chicago bankruptcy lawyers can help you get started when you complete the form on this page or contact our firm at (866) 930-7482.

Benjamin Brand Services – Chicago bankruptcy lawyers

Braxton Un-Breaks The Bank

Nearly 15 years after she sang about the nights being so unkind, six-time Grammy Award-winner Toni Braxton says bankruptcy has “worked out really great” for her. The Wall Street Journal reported on November 9, 2011, that during the premiere episode of her reality television show’s second season, Braxton flew her sisters out to Los Angeles to see her new home after successfully discharging her from a number of debts in her Chapter 7 bankruptcy case. “So I’m starting over, and starting over can be a great thing,” Braxton said during the episode of “Braxton Family Values.”

Braxton first filed for bankruptcy in 1998 after a dispute over her recording contract, but it was when the singer found herself in need of foreclosure help with her house in the Century City area of Los Angeles in October 2009 that led to Braxton returning to bankruptcy court again in October 2010. In August 2011, Braxton struck a deal to ensure that she would be able to keep her Grammy Awards as well as her Tiffany jewelry and 1995 Porsche 911.

While you are more than likely nowhere near the $18.3 million in debts that Braxton claimed when filing for her second bankruptcy, the singer’s case can still serve as a reminder of how completing a bankruptcy means test will never leave you in a worse situation than before you filed. Just as her own attorneys found a way to let Braxton hang on to her six Grammys, our Chicago bankruptcy lawyer will work to help you retain your home, car or other items you fear will be taken by creditors. When you are concerned about losing property, those fears are some of the best reasons to file bankruptcy rather than being reasons not to.

Benjamin Brand Services – Chicago bankruptcy attorney

Record Number of Americans Living in Poverty

While the Census Bureau reported that there are 46.6 million people, or 15.1 percent of Americans, living poverty in 2010 under the decades-old official measure that considers only food costs and before-tax income, a new formula is trying to provide a fuller picture. The Associated Press reported on November 7, 2011, that a supplemental measure from the Census Bureau shows a record 49.1 million Americans, or 16 percent, lived in poverty in 2010.

With millions of Americans needing foreclosure help or considering bankruptcy , the new measure takes a variety of expenses into consideration, including food, shelter, clothing and utilities, as well as accounting for different sources of income like food stamps and housing subsidies. According to the AP, Americans 65 or older sustained the largest increases in poverty when broken down by groups under the revised poverty formula, nearly doubling to 15.9 percent. Medical expenses such as rising Medicare premiums, deductibles and expenses for prescription drugs are not accounted for in the official rate.

The AP noted that economists and anti-poverty experts “continue to differ widely on how best to calculate poverty,” and the Census Bureau acknowledged that its new measure remains a “work in progress.” You do not need to be formally recognized as living in poverty in order to pass the bankruptcy means test , but our Chicago bankruptcy lawyer can show you how filing Chapter 7 or Chapter 13 bankruptcy could very well be the fresh start you need to get back on your feet.

Benjamin Brand Services – Chicago bankruptcy attorney

The Young and the Homeless

An increase in the number of people needing foreclosure help combined with a lack of affordable housing and a state unemployment rate higher than the national average has led to an increase in youth homelessness in Chicago, the Chicago News Cooperative reported on November 4, 2011. Chicago Public Schools data for September showed a record high of 10,660 homeless students enrolled in Chicago’s classrooms this fall, a 16 percent increase over last year.

Chicago is entering the ninth year of a 10-year Plan to End Homelessness, but the Cooperative noted that the initiative overlooked the young homeless people who can be most vulnerable when living on the streets ever since then-Mayor Richard M. Daley started the program in 2003. With most initiatives concentrating on the chronically homeless and people with disabilities, the city is now working on a new strategy for ending homelessness in Chicago without a 10-year deadline. According to the Cooperative, the Chicago Alliance to End Homelessness identified two “special populations” for particular attention: youth and ex-offenders.

If you are facing foreclosure and trying to keep your home so your kids will not end up on the streets, a bankruptcy means test could be your first step toward ending creditor harassment. Our Chicago bankruptcy lawyer can help you set up your own Chapter 7 or Chapter 13 plan that will allow you to keep your home and reestablish credit.

Benjamin Brand Services – Chicago bankruptcy attorney

Illinois Will Need Jobs to Recover From Housing Crisis

Illinois will be one of the last states to recover from the housing crisis, the Chicago Tribune reported on November 4, 2011. Economists with the trade group the National Association of Home Builders said that unlike the problems holding back Arizona and Nevada, recovery for Illinois will hinge on jobs. Unemployment in the state rose to 10 percent in September, the first time the rate hit double digits since August 2010.

According to the Tribune, the average number of single-family housing starts in Illinois was 44,431 annually from 2000 to 2003. After housing starts bottomed out at 17 percent of their normal level in 2009, Illinois builders will be constructing 27 percent of the normal range by the end of next year and starts will grow to 42 percent of normal activity by 2013.

The good news to come out of the forecast would have to be that more consumers are purchasing homes that are much more affordable. Many of those now seeking foreclosure help purchased homes that were as much as five times their income, but the Tribune noted that the trend is “back to more realistic levels as a result of lower home values and tight credit underwriting.” David Crowe, chief economist of the builders’ group, told the Tribune, “There does seem to be some resettling of house prices down to what people can afford.”

One would certainly hope that the trend could reduce the number of consumers needing to file Chapter 7 or Chapter 13 bankruptcy, although there remains a significant number of families for whom that may remain the best option. If you are in dire straits financially, contact our Chicago bankruptcy lawyer to see how our firm can help.

Benjamin Brand Services – Chicago bankruptcy attorney

Knock Knock, Foreclosure Help Going Door-To-Door

Chicago area homeowners in need of foreclosure help and wanting to save their property could soon have help right at their doorsteps. According to a story from Medill Reports published on November 3, 2011, Interfaith Housing Center of the Northern Suburbs will dispatch outreach workers to houses that have received foreclosure notices as part of a door-to-door campaign. The goal is to help homeowners in foreclosure take advantage of free legal services and housing advice through the Circuit Court of Cook County Foreclosure Mediation Program.

“We’ve been around since 1972 and people still don’t know we exist,” Interfaith executive director Gail Schechter told Medill. According to a report by the Circuit Court of Cook County, outreach workers made nearly 22,000 home visits between July 2010 and March 2011, leading to 1,923 people engaging in the free program. Medill said the report shows 64 percent of participants in the Foreclosure Mediation Program reach an agreement with their bank that “is mutually acceptable to all sides.”

If you have already looked into free programs to no avail, then you should know that filing for bankruptcy could also be a first step toward keeping your home and getting your finances in order. Our Chicago bankruptcy lawyer can help you in filing for Chapter 7 or Chapter 13 bankruptcy that can keep your family in your house and end debt collector harassment.

Benjamin Brand Services – Chicago bankruptcy attorney

Housing Starts Surge in September, But Not Enough to Single Recovery

A surge in volatile apartment construction drove homes to be built in September at the fastest pace in 17 months, the USA Today reported on October 19, 2011. While single-family home construction rose only slightly and building permits fell to a five-month low, the Commerce Department said privately owned homes were started at a 658,000 annual rate last month. According to USA Today, that is a 15 percent increase from August and roughly half the 1.2 million that economists say is consistent with healthy housing markets.

New-home sales, however, hit a six-month low by falling in August to a seasonally adjusted annual rate of 295,000. USA Today said this year is shaping up to be the worst since the government began keeping records a half-century ago.

For every news item that hints at economic improvement, does it seem like you are still waiting to feel the benefits? If you are struggling through hard times and want to end creditor harassment, you can get deserved relief today by filing for Chapter 13 or Chapter 7 bankruptcy. In order to eliminate bills and stop foreclosure, the first step could be a bankruptcy means test . Our Chicago bankruptcy lawyers can assist you in getting the foreclosure help you have been seeking when you contact our office to set up an initial consultation.

Benjamin Brand Services – Chicago bankruptcy attorneys

Making Foreclosures Strategic

What if foreclosure could be used for your benefit? According to a September survey conducted by business schools at the University of Chicago and Northwestern University, 34 percent of foreclosures are of the “strategic variety,” the Press-Enterprise reported on October 18, 2011.

Strategic defaulters could afford to stay current on their mortgage payments but decide to “walk away” and let lenders foreclose. In the Press-Enterprise article, one family was preparing to buy a brand new house that was nearly twice the size of their first house, although the new payments will be no more than the old ones. Because it generally takes three years of waiting with strong handling of finances in that time span, it makes sense that some foreclosure veterans are showing up now.

While it is encouraging that some homeowners can use the current housing market to their advantage, where does that leave the families who are facing foreclosure but want to stay in their current home? If you are in need of foreclosure help , then now is the best time for you to consider the benefits of filing bankruptcy . Our Chicago bankruptcy lawyers can help you get deserved relief today by filing a Chapter 13 or Chapter 7 bankruptcy that can help consolidate, reorganize or eliminate your debt. Whether you have heard of a bankruptcy means test or not, our firm can answer all of your questions when you contact our office to set up a consultation.

Benjamin Brand Services – Chicago bankruptcy attorneys

Home Agency Director Took Interest-Free Loans Despite State Law

Kenneth Pannaralla not only takes home $213,418 a year from a city pension and three government jobs, but the former captain for Illinois House Speaker Michael Madigan also got two interest-free home-improvement loans worth a total of $15,000 through the Southwest Home Equity Assurance Program he has been executive director for since 2004. The Chicago Sun-Times reported on October 17, 2011, that Pannaralla and his daughter also currently have another zero-interest home-improvement loan through the agency for $10,000, although the Illinois Home Equity Assurance Act supposedly bans such benefits.

The law states: “No commissioner or family member of a commissioner, or employee or family member of an employee, may receive any financial benefit, either directly or indirectly” from the program. The Sun-Times also reported that the Southwest Home Equity Assurance Program was one of three small government agencies established by referendum in Chicago as a result of a state law passed in 1988 to curb white flight in Chicago’s bungalow belt. After paying $125 for the appraisal to enroll in the program, homeowners are guaranteed they will not lose money when they sell their home even if property values decline.

While the Sun-Times reported the program has paid some homeowners as much as $155,000 when their homes sold far below appraisals typically performed several years before, the program began paying 59 percent of the difference between the sale price of a home and its guaranteed appraised value, rather than 100 percent. The program uses money it collects in property taxes from the Southwest Side district it covers to pay all of the interest on loans up to $10,000.

Do you wish that you had the opportunity to enroll in something like the Southwest program? Or do you just wish you could have been connected like the other aldermen and government employees who received interest-free loans? As unfair as it all might seem, you should know that however bad your own current situation might be, there is a way out. Whether you have accumulated too much credit card debt or are simply in need of some type of foreclosure help , our Chicago bankruptcy lawyers can help outline the benefits of a Chapter 13 or Chapter 7 bankruptcy. A bankruptcy means test can be the first step to help you eliminate bills and stop foreclosure. If you are tired of feeling like there is no answer to your financial problems, contact our firm today to speak with a legal professional who understands your situation and can help you achieve an affordable bankruptcy now.

Benjamin Brand Services – Chicago bankruptcy attorneys

Will More Startups Lead To More Hiring?

Startup companies are growing in Illinois and many of them will be planning to hire new employees this year, the Chicago Tribune reported on October 17, 2011. In a survey distributed by the Chicagoland Entrepreneurial Center with the help of other groups, 77 of 136 participants said their company was founded between 2006 and 2010. Only 12 companies were founded between 2000 and 2005, and the Tribune noted 30 startups have been formed in 2011 alone.

Furthermore, almost 65 percent of respondents said they would add employees in 2011, with the majority of those new jobs based in Chicago. The Tribune also noted that 92 respondents said they are on the hunt for capital, and more than 75 percent of that group put themselves in the seed or early stages, thus preparing for a commercial launch or seeking funds to jumpstart sales.

Have you been crippled financially because of unemployment? Are you making substantially less at a new job? If you need to eliminate bills and stop foreclosure, our Chicago bankruptcy lawyers can help you with an affordable bankruptcy now. A bankruptcy means test can be the start for you to get deserved relief today. Filing for a Chapter 13 or Chapter 7 bankruptcy can help consolidate, reorganize or eliminate your debt. If you have been desperately seeking foreclosure help , contact our office today to set up a consultation with our firm that could help finally end creditor harassment.

Benjamin Brand Services – Chicago bankruptcy attorneys

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