Peter Francis Geraci A Bankruptcy Blog - Chapter 7 & 13

On Check N' Go's Web site there is an advertisement of a young hound puppy with the phrase, "Life can be unpredictable. For those times we're here. Quick approval time. Less than perfect credit. Pay back on your next pay period" The ad also includes a quaint sign stating "Veterinary Hospital."  Way to play on emotions, Check N' Go.

Payday loans can be considered a necessary evil – when you need money for food, rent, Fido’s check up, etc. and have no where else to turn a payday loan seems like a good option. When you're desperate, it is easy to skim the lines of the contract and mindlessly hand over a check. But, the payday loans will make you pay, and then pay, and then pay some more.

 

The consequences seem to heavily outweigh the actions of taking a payday loan. For example, you are short on rent and need some extra cash for your landlord.  You take out a payday loan for $500 and with an APR of 842.31% in as little as 13 days the bill will go to $650.00 if all payments are made on time. If you need to extend the loan, it is an additional charge for the extension. If you miss a payment, the lender can take the money from your bank account or proceed with a wage assignment and deduct the funds directly from your paycheck. It’s a vicious cycle – often to stay current with payday loan payments, you take out another payday loan, and another and another….

 

Filing a bankruptcy will stop payday loan harassment. A chapter 13 bankruptcy will stop the crazy 1000% interest on some payday loans and a chapter 7 will just eliminate the debt.  Geraci attorneys can send over notice to your payday loan lenders to stop the deductions from your account before your case is even filed.  If you have zero debt then you should be able to afford a vet visit without the payday loans.

 To see full ad, please click here.

- Despite technical problems, Geraci attorneys get the job done. A client came into our office and the client's car was going to be auctioned 3 days later and the Geraci attorney filed the case in ONE day and saved the client's vehicle!

- A client arrived at the 341 Meeting of Creditors without a cell phone and forgot to arrange a ride. The Geraci attorney representing the client lent their cell phone and waited until their ride picked them up.

- At the 341 Meeting of Creditors, the client was worried about their own case while listening to errors made by a different law firm for another case. The Geraci attorney sat down and explained the mistakes by the other attorney and took the time to explain what would happen at their own meeting to reaffirm the client hired the right place.

Addressing the alleged failures of other Illinois bankruptcy attorneys was not the original purpose of this blog but the weekly indictments are making it difficult not to tackle the importance of finding a good (and honest) attorney. The newest debacle involves an Illinois attorney in the Western suburbs.

This is not the first disciplinary rodeo for this attorney. In 2010, this attorney was suspended on an interim basis because she, “overreached an attorney-client relationship, exerted undue influence on clients, charged in excessive fees without authorization from the bankruptcy court, and in some cases, without her clients knowledge or consent, engaged in dishonest conduct.” In this article by the “Illinois Lawyer,” there are 26 other attorneys who were suspended and 12 attorneys who were disbarred.

In this attorney’s current indictment, she has been accused of bankruptcy fraud and is facing felony charges. Some of the indicted attorneys have been practicing bankruptcy for years and others appear as if from no where when the economy takes a dive. While this attorney defends her allegations, clients are trying to figure out who is representing them and their financial interests.

Attorney Peter Francis Geraci and his firm Geraci Law, LLC have been around for the last 35 years. We are here to help the people who want to help themselves. This is not a fly-by-the night, waiting for an inevitable indictment kind of law firm. We’re here to help the good people with bad luck get out of debt.

To read the article in the Illinois Lawyer about the 2010 disciplinary actions, please click here.

When you hear the word bankruptcy – the negatives, the misconceptions immediately come to the forefront to define the word. The word bankruptcy has been dragged through the mud almost to the point of no return. It’s so unfortunate considering bankruptcy has helped so many people for hundreds of years become debt free. A big misconception is the public thinks there is only one type of bankruptcy. A chapter 7 liquidates debt and immediately the public assumes a debtor would lose their house, cars, and other assets. However there are actually 6 different chapters of bankruptcy outlined in title 11. There are two consumer bankruptcies – a chapter 7 and a chapter 13 and below I have outlined the other chapters of bankruptcy for your reading pleasures.

Chapter 9

A chapter 9 bankruptcy is available only to municipalities. A chapter 9 is reorganization not an elimination of debt. Chapters 9s are rarely filed and the most used example is the 1994 filing of Orange County, California involving millions in municipal debts.

Chapter 11

A chapter 11 bankruptcy is for businesses or individuals with more debt than chapter 13 debt limitations allow. Under a chapter 7 bankruptcy, a business will generally stop operations – chapter 11 bankruptcies will allow the business to continue to operate while continuing bankruptcy proceedings.

Chapter 12

Until 1986, there was not a bankruptcy code directed toward farmers. A chapter 12 bankruptcy allows family farmers and family fisherman to propose and follow through with a plan to repay all or part of their debts. Chapter 12 bankruptcies are far less complicated and generally cheaper than chapter 11s and allows for more debt than a chapter 13 repayment plan. There are qualifications outlined in the bankruptcy code for debtors to call themselves family farmers and fisherman including more than ½ of the outstanding stock or equity must be owned by one family and its relatives and if the corporation has stock it cannot be publicly traded.

Chapter 15

A chapter 15 was added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This section deals with jurisdiction and is often used as a supplement for corporate bankruptcies with holdings in other countries.

We hear it all over the place: “Be smart with your spending.” But how does that apply to charitable giving?

Many people who are filing a bankruptcy often deal with this dilemma. They are confronted with a choice: give to the needy, or keep what’s needed to pay the insurance/day care/prescriptions. While giving money to charity may be a moral obligation and/or gratification to you, you must consider it as one of your monthly expenses and budget your donations appropriately. $10 every week at church could mean a year’s worth of electricity, or $50 per paycheck could be the difference between your car in the garage or in the “repo” lot. A lot of the time, people struggling with their finances simply don’t have someone to tell them that it’s better, for the time being, to save their monetary contributions at least until they have their feet back on the ground. Well, I’m here to tell you now that if you need it, you’ve got to keep it.

The more you give does not make you a better person. Remember that saying, “it’s the thought that counts”? It didn’t just apply that one time you burned the casserole at Thanksgiving. The greatest acts of charity don’t start and end with a checkbook; if you’ve got the heart and the time, you can positively impact your community (and beyond) through volunteer work virtually anywhere. These acts of kindness can say a lot more than just “here you go” from Abraham Lincoln, Andrew Jackson, or even Benjamin Franklin. If you believe in karma, you’ll have a lot more coming back to you, and the return on investment is immediate.

At least for now, instead of giving away your much-needed dollars, spend a little time giving back to your community. You’ll never know how much fulfillment it’ll give you until you try it.

Retirement. I cannot wait to relax and enjoy the well-deserved rest after years of waking up to an alarm and living by deadlines. I have years to go but many people are getting closer and closer to the golden years. With social security going - well bankrupt, many soon-to-be retirees need to take a good hard look at their 401Ks, IRAs, and pension accounts once they shut the door on full-time work.

A study done by Boston College called, “The New Unemployables,” found 30 percent of people ages 55+ owed more in credit card debt than saved in retirement accounts. So continuing the minimum payments (getting them no where) means come retirement, the person has more credit card debt and less income. If you’re working full-time and are struggling with the credit card debt, paying the debt off or down will not get easier with retirement – actually with less income and potential increases in medical expenses will make payments more difficult.

Most experts agree using retirement savings to pay off credit card debt is a bad idea. More often than not, a person will take a 401K withdrawal only to pay a portion of the debt. This is problematic because debt still exists and the minimum payment is still due the following month. Not to mention, the tax penalties for early withdrawals. Unless you qualify for a tax exemption for the withdrawal, you are subject to an early distribution penalty of 10% additional tax.

Moral of the story is to file a bankruptcy before thinking about retirement. Filing a Chapter 7 bankruptcy will eliminate all of the debt so you are able to readjust to your new income. While you're working, a Chapter 13 repayment plan will pay off your debt in 3 – 5 years, protect all of your assets so you are debt free before your retirement party.

You’re going into retirement – you are supposed to enjoy it. Spend time with the grandkids and go on sunny vacations. You do not need the sleepless nights and headaches of creditor harassment and 30% interest rates.

To read the study by Boston College, visit http://www.bc.edu/content/dam/files/research_sites/agingandwork/pdf/publications/IB25_NewUnemployed.pdf .

One reason many people find themselves in debt is because they are simply living beyond their means. It’s an easy trap to fall into - advertisers want you to spend money on products and creditors initially offer great zero-low interest rate credit cards. The problem is once you start missing payments, the creditor claiming to be friend quickly becomes foe. Below is a list of different types of expenses and example of how to save for a luxury item. Maybe you recently filed a bankruptcy and want to create a budget or you need to file a bankruptcy but want to get a jump start on financial management. Either way, knowing your expenses is important so when you do want a little extra cash for the next “big thing,” you’re able to save for the expense. So let’s run through an example on budgeting for an iPad 2.

The new iPad is sleek and cool and starts around $499 according to Apple’s Web site. You want to save so you do not have to purchase on credit. Our example saver makes approximately $3,192.00 net per month working a full-time job and recently filed a Chapter 7 bankruptcy and has zero credit card or medical debt.

Creating a budget to save for the wants is important (I know, I feel like I need one too). Step one is listing your fixed expenses. Your fixed expenses do not change from month to month. For example, your rent or your mortgage payment (if paid on time) will be the same amount each month. In our example, our person pays a $989.00 mortgage payment including taxes and insurance. Another fixed expense is car insurance and our person pays approximately $100 per month. So subtracting fixed expenses from the $3,192.00 net income leaves our guy with $2,103.00 for other expenses.

After listing fixed expenses on your blossoming budget, you need to list your variable expenses. As evident by the name, these expenses vary. Examples included clothing, food and utilities. Unlike the fixed expenses, you can save by spending less on your variable expenses. For example, if our saver wants to purchase an iPad 2, then maybe he eats at home more instead of going to a restaurant. Variable expenses will change and the saver (for the most part) can control major fluctuations. With utilities, clothing, and food costs, our example person spends on average $800.00 per month leaving him with $1303.00 for other expenses.

Periodic expenses only happen once or twice a year. Holiday spending, taxes and vehicle registration are all examples of periodic expenses. Like the variable expenses you can curb how much you want to spend by cutting costs on gifts for Christmas, etc. In our example, the man owes some back taxes and is currently on a payment plan for $450.00 per month leaving him with $853.00 per month.

Now, our saver has a budget. Each month he has $853.00 to put toward periodic expenses and other variable expenses. By creating a budget, he can safely set aside $166.33 per month and purchase the iPad2 in as little as 3 months. Budgets are important especially post-bankruptcy – your debt free and want to stay that way.

A foreclosure is over when a house is sold at a sheriff sale. The title is transferred and the debtors are no longer homeowners. When a home is set for auction, mortgage companies are done working with debtors. Ultimately the mortgage company decided it would be more cost effective to let the property foreclose versus working out a loan modification.

But there’s hope! To stop a sheriff sale, the debtor needs to file a Chapter 13 bankruptcy. If you can afford your home, you can keep your home. (Repeat after me.) A chapter 13 bankruptcy is going to cost the same amount anywhere you go in your home state. You should go to the best.

Recently, our firm successfully saved a debtor’s house. This person called one of our experienced consultants after being turned away from other attorneys. Our consultant promptly scheduled the debtor to meet with our attorneys. The problem was not being able to afford the house; the problem was trying to pay over $50,000 in arrears all at once. Within an hour, the debtor drove to our office and was filling out paperwork. The hopeless homeowner arrived at the office at 10 a.m. and the house was due to be sold at noon.

Our attorney at lightening speed created an affordable repayment plan and filed the petition with the court. This debtor was able to save the house because on a whim called a law office looking for help. Now, the debtor is living happily in the house and making timely payments to the Bankruptcy Court paying down the arrears.

An average attorney can take weeks what our law firm was successfully able to do within hours. You pay the same in attorney fees with a Chapter 13 – why not go to someone with compassion and the ability to do the seemingly impossible?

Happy St. Patrick’s Day! Today, everyone has a little bit of Irish heritage and will chase the clever Leprechaun to find fortune. Bankruptcy is a debtor’s pot o’ gold. Getting rid of bills and eliminating the pain-staking minimum payments every month is like finding the end of the rainbow. All of a sudden, the $700 per month you are spending on credit card payments can go toward a new green shirt or an ice-cold Guinness. Today, enjoy the warm weather and consider a bankruptcy attorney your lucky charm.

It’s 8:01 a.m. You’re trying to get the kids out the door and get a semblance of yourself for the meeting you have at work. Then the phone rings – it’s a creditor. The FTC guidelines state creditors are not allowed to call you before 8:00 in the morning or after 9:00 at night. So of course your creditor waits the extra minute to adhere to guidelines. Creditors do have rights to collect on debt but some take collection to the extreme. It is important to know your rights as a consumer. Number one being – file a bankruptcy and the calls must stop.

While you work on deciding if you want to struggle with debt or feel the relief of being debt-free, below are a list of things your debt collections cannot do from the Federal Trade Commission.

Harassment

Your collectors cannot threaten you with violence or harm. Despite what some of your creditors tell you they cannot publish a list with your name because you refuse to pay your debt. However, your creditors can send the information to the credit bureaus. The harassment of constant phone calls will stop with a filed bankruptcy. A meeting with an attorney will not stop the calls – you need a petition filed with your local bankruptcy court.

False Statements

Your creditors cannot pretend they are:

- Attorneys or government officials

- Police stating you committed a crime

- Representative from a credit reporting agency

Your creditors cannot say:

- You will be arrested for not paying your debt

- They will seize, garnish, and repossess your personal property or income unless they have a court order.

Your creditors may not:

- Give incorrect credit information about you to anyone including a credit reporting agency.

- Send you anything that looks like an official court document if it isn’t.

- Use a false company name.

Unfair Practices

Your debt collectors cannot do the following to receive payment on the debt:

- Try to collect any interest or penalty unless the contract (that you signed originally) allows

- Deposit a post-dated check early

- Take or threaten to take personal property unless court-ordered

- Contact you by postcard

To read about additional debt collection rules, please visit the FTC’s Web site here.

Increases in taxes, expenses and minimums, increases in taxes, expenses and minimums – oh my! Like the mysterious world of Oz, the current financial situation of the average debtor seems to be as confusing as to why Dorothy wore red glittery shoes in windblown Kansas. Like the veil being pulled off the wonderful wizard of Oz, the sheath of financial naiveté needs to be yanked off.

There are vague percentages about increases and decreases being tossed around in various newspapers addressing how the economy is bouncing back. Maybe, but it seems like the rich are getting richer and the middle class are joining the poor. Pardon my criticism but how is the economy bouncing back when the Illinois legislature approved a 66% income tax increase? A percentage of the population may be returning to work, but paychecks are being spent on taxes, increased living expenses, and unbelievable interest rates and minimum payments.

Income taxes went up 66 percent in Illinois to attempt to balance the state budget. The average median income for a single person in Illinois is $46,355. Currently, this single person is paying $1,330.65 in income taxes. With the income tax increase, the person will now pay $2,222.19 in income taxes. That is $891.54 more! If you have a tight budget as is, the bigger deduction from your check is not going to help anything. For your average single working person, the economy is not good – especially if you have debt.

Think about it, if you are paying a $500 minimum payment toward your credit card every month, the tax increase eats up your minimum payment and then some. Filing a bankruptcy does not mean the tax hike will disappear but at least you’ll be debt free to rebudget and afford things like food, water and gas.

Living expenses continue to increase particularly gas prices. You need gas to fuel the car to get to work but you have to pick up extra shifts to be able to afford the gas. According to a survey, the average distance for a commuter in Illinois is 16 miles and when gas prices are expected to climb up to $4.00+ by summer, gas for a 32 mile round-trip add up. Jobs may be available (according to ads in the Chicago Tribune) but a person returning to work has to pay to get there. There is no money left over to pay minimum payments after fueling up.

Lions and tigers and minimums – oh my! When you have a significant amount of debt, making minimum payments on $10,000 worth of debt is really not going to get you anywhere. The minimum payments go primarily to interest not to the principal. If you struggling to make the minimum, an increase in interest or the payment itself can throw an already tight budget out of whack. File a Chapter 7 bankruptcy to eliminate the debt or a Chapter 13 which will eliminate interest.

For example, a statement provided by an Illinois debtor for a payday loan store showed an original loan amount of $6,065.00. This loan had an APR of 300% and the debtor will pay a total of $9,105.79 by the end of the loan. This person should file a bankruptcy and feel free to dance down the sidewalk singing, “ding dong the witch is dead.”

Follow the yellow brick road to financial freedom. Take some time and actually look at your credit card statements and see how your payment is broken up. If you are an Illinois resident visit this site to calculate how much the tax increase will affect your monthly budget. As for now, the economy doesn’t seem to be getting much better. Click your heels together and investigate your bankruptcy options.

For years, Michael Scott and his office clan have entertained millions of Americans on the hit NBC mockumentary series, “The Office.” Its popularity is due, in large part, to the old comedy trick that the audience knows something that the characters don’t. In the case of “The Office,” the television audience is aware that the events on the show are fictitious, and can therefore find humor through satire. However, in the fourth season episode “Money,” the show completely misleads its viewers about the life-saving system of bankruptcy, and actually leads them to believe that it’s a procedure to be avoided. So, where’s the comedy when it’s the audience that’s been tricked?

“I…DECLARE…BANKRUPTCY!” Haha, very funny, Michael Scott. We all know that that’s not how it works. The audience does realize that Michael’s excessive spending and poor budgeting has led him to reevaluate his lifestyle (like, not buying magic kits or bass fishing equipment), but in our real world, the audience probably understands just about as much about bankruptcy as he does. Michael believes and even states, “In Monopoly, you go bankrupt, you lose.” Well, that is true, but Monopoly is also a 1930s-era board game and this is real life: in this world, you go bankrupt, you get another chance at financial freedom.

After Michael literally declares the word bankruptcy, one of the office accountants decides to look over his budget and offer some professional advice. This is where experienced accountants, attorneys, and burned debtors know that “The Office” is doling out some pretty bad advice. Michael is advised to meet with a debt consolidator by Oscar Nuñez, the office accountant – red flag! Wrong! An educated accountant would know that debt consolidation is really a scam: first of all, it rarely works, and second, the program tricks clueless debtors into extending the terms of their repayment (which is why interest is lowered). I don’t know about anyone else, but I’d like to see what university gave Oscar Nuñez a degree in accounting!

So, who is responsible for giving millions of Americans bad advice? Is it the producers, the writers, maybe even the network? It looks like that adage “Don’t believe everything you see on T.V.” remains true to this day. It’s really up to the American people to make themselves aware of the subjects presented on television, especially regarding finance and debt. Don’t be like Michael Scott – consult real bankruptcy attorneys, like those at Geraci Law, LLC. They’ll give you the kind of advice NBC didn’t – good advice!

Earlier this week, there was an article on MSNBC’s Web site addressing how bankruptcy can save your home.  This is a national news service advertising the numerous benefits of a bankruptcy.  In the article, journalist John W. Schoen said, “Bankruptcy laws, after all, were established to provide an orderly process for people in financial trouble to reorganize their debts, start fresh and rebuild their lives.”

 

Schoen’s article focused how a Chapter 13 bankruptcy can save homes from foreclosure. Homeowners who were out of work for a couple of months and are getting back with a steady income can save their homes. If you can afford your home, you can keep your home. Let me repeat, if you can afford your home, you can keep your home. File a Chapter 13 bankruptcy and stop the foreclosure proceedings. 

 

If you every tried contacting your mortgage company about a missed payment or modifying a loan, you are well aware that stopping a foreclosure without a Chapter 13 is nearly impossible.  Most mortgage companies will not accept payments once a foreclosure has been filed – even if you have money to pay on the arrears. A chapter 13 is your solution! Your mortgage company cannot proceed with a foreclosure if you have a filed Chapter 13 bankruptcy.

 

I am not a statistician but I think you can link the increase of bankruptcy filings and the decrease in foreclosures. For example, in Illinois in February, there were 109,178 bankruptcy filings. This number can be attributed to using tax refunds to pay for bankruptcy filings and other numerous causes for the jump from January. However, the number of foreclosures in Illinois also declined. According to RealtyTrac, there were 9,592 foreclosure filings. This number is 45% lower than February of last year.  So more bankruptcies were filed and fewer foreclosures were filed – coincidence? I think not.

 

It’s hard to argue the numbers are not related. The negative stigma of bankruptcy is being replaced by the benefits to struggling consumers. Articles like Schoen’s can replace the negativity around bankruptcy. The ongoing joke is if you walk into a party and say you filed for a bankruptcy, half of the room would say they filed also. Everyone needs a little help especially when it comes to your home. Just a reminder, if you can afford your home, you can keep your home – examine your Chapter 13 options.

To read the article click here

It will be close to 50 degrees in the Chicago area today and it's a glimmer of hope - spring is on its way.  The warm weather means people emerge from hibernation and spend time outside. In Chicago, the path along Lake Shore Drive fills with joggers, bikers, rollerbladers and the general passerbys. Spring turns into summer and instead of fidgeting with bills, lawsuit summons, and the endless stream of creditor calls, I would rather join the careless joggers on Lake Shore Drive. Spring clean your debt just like you spring clean the dreaded hall closet.

Filing a bankruptcy is the ultimate spring cleaning. Think about it, you file a Chapter 7 bankruptcy now - wait the 60-90 days for your discharge and you could be debt-free by June! It's a big decision to make but when you actually look at your bills, your budget and your income - what else are you going to do? You can waste another wonderful spring day doing balance transfers or barely meeting minimum payments or you can contact a bankruptcy attorney and get out of debt.

I understand a person is not going to be convinced to file a bankruptcy overnight. It actually takes the average family 2 years of fighting creditors to actually make the decision to file a bankruptcy. But look at the numbers, why torment yourself for the next 30+ years when you could file a bankruptcy and actually enjoy some relief (and a sunny afternoon). Plug your numbers in to Bankrate if you want to see how much you are actually spending on minimum payments.

Get yourself out of debt. Throw away the stress and hassle like you throw away old dusty brooms from the hall closet.

You finally decide to file a bankruptcy. Now, you want to find a bankruptcy attorney and you assume since your filing for bankruptcy the cheapest attorney is the best attorney. Wrong! A cheap attorney will ultimately cost you more fees than the original quoted price. Think about it, why pay a no-name attorney when you’re dealing with your finances and ultimately your financial future? Experience counts, especially when you’re dealing with cherished items like your house, car, and other personal property.

You can find cheap attorneys, they do exist. Look in your local phone book and find the one advertising $400 bankruptcy. The ad is probably next to a used-car ad offering financing for everyone and no credit checks.  Use your head and the age old phrase - you get what you pay for. You fall for the ad and it's easy to do so - you’re vulnerable because of your financial situation and the cheap attorneys talk a good game. But don't let common sense fall victim to the cheap attorney. You're filing a bankruptcy use the opportunity to make better financial decisions.

When hiring any attorney, the first question you should ask is, "how long have you been practicing?" The longer the better - the more skilled attorneys are the ones who have been around and are capable of handling anything that comes up. It's not just the attorney you meet with but the law firm you work for. If you are hiring a sole practioner, there is only one set of eyes and one legal mind reviewing your case. The best writers in the world have their masterpieces reviewed and then reviewed and so on... Instead you hire an attorney at Geraci Law, LLC. You have multiple attorneys reviewing your case to make sure you keep what you want to keep and eliminate your debt.

Cheaper is not always better. Ask owners of the Ford Pinto....

Below is a list of rules created (and enforced) by the Federal Trade Commission (FTC) for debt settlement or debt relief. If you are currently enrolled in a debt relief program, look at the list maybe the agency you hired isn't meeting the standards. Filing a bankruptcy can eliminate your debt or you can file a Chapter 13 repayment plan through the court. A bankruptcy works within the law to provide you with a fresh start. Attorneys have an ethical obligation to do what’s best for their clients and you have the bankruptcy code on your side.

In 2010, the FTC amended the Telemarketing Sales Rule to prohibit debt relief firms from collecting fees before certain guidelines are met. An organization offering to settle a debt for a fee cannot collect said fee until the following guidelines are met:

- The debt relief service successfully settles or changes the terms of at least one of the consumer's debts

- There is a settlement agreement debt management plan, or other agreement between the consumer and the creditors that the consumer has agreed to; and 

- The consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.

Information courtesy of the FTC

Many of these organizations require debtors to have a "dedicated account" to put in funds to pay creditors. The Better Business Bureau (BBB) has received numerous complaints regarding access to these funds. To have a dedicated account the organization must meet the following guidelines:

- the account is maintained at an insured financial institution

- the consumer owns the funds including any interest

- the consumer can withdraw from the debt relief service at any time without penalty and will receive all unearned fees within 7 business days 

- the provider is not affiliated with the bank nor receives referral fees.

Information courtesy of the FTC

Now you have some of the regulations for a debt relief agency. The reality is the majority of agencies do not meet these guidelines. In a study done by the FTC, only 10 percent of consumers in a debt relief agency actually succeed despite the majority of advertisements claiming 100% success rates. Knowledge is power - if it sounds too good to be true, it probably is.

There is a great article called "Knee Deep in Debt" on the FTC's Web site. To read the article, click here.

Apparently everyone is having money trouble. Our elected officials are having as difficult of a time as you or I creating and maintaining a budget. The big difference is when the federal government can't create a budget, the government stops.  Federal employees do not go to work because there potentially is no money to pay them.  Despite a budget extension to March 18th, the federal government is hitting the bomb shelter and preparing for a shutdown, including the federal courts.

When there is a shutdown, the costs charged with almost every filed bankruptcy petition can actually fund the adminstration of the majority of courts - not just the bankruptcy court. However, the funds could simply run out. The money spent by bankruptcy petitioners is actually funding other courts...the irony.

If the court were to shutdown and if the pool of money from court costs were to dry up, it is possibly bankruptcy attorneys could be affected. If there is no money to fund PACER (an electronic filing system used by attorneys to process bankruptcy petitions - including Geraci Law, LLC), the system could be shut down.

What does this mean to you - potential bankruptcy filer? You want an attorney who can survive the shutdown! Peter Francis Geraci and Geraci Law, LLC have been in practice for the last 35 years.  When there were other government shutdowns in the mid-90s, the firm survived and ensured petitions were filed.  

When you are considering a bankruptcy, keep in mind our towns, our states, and our federal governments are in similar positions. There is simply no money left over at the end of the month to pay the bills.

The rumors circle around the water cooler, a supervisor says hours will be cut, and a couple of months later the dreaded e-mail comes out saying you're losing your job. Unemployment is scary especially when you have debt. When you live paycheck to paycheck, the loss of that paycheck and a chunk of your income is a big hit. Filing a bankruptcy to eliminate the debt can alleviate the loss. Think about it, getting rid of the credit card or medical debt can free up your income so when the first unemployment check comes in it doesn't have to go directly to interest. Instead the money can go toward your mortgage, your vehicle, and things like gas to fuel the inevitable job hunt.

The job hunt becomes a full-time job - you are constantly applying for jobs, updating resumes and trying to get back on your feet. While you are dealing with the stress of job loss, the last thing you need is a creditor calling demanding payment or they will take your dog from your front yard (true creditor story).  When you're on unemployment, it becomes close to impossible to maintain credit card payments with high interest rates and minimum payments. Since we are currently in a "buyers market" when it comes to employment, employers are looking closely at credit reports to weed out potential employees. If you miss a couple of payments or have serious negative information on your credit report, it could be enough to be denied a job.

In an interview with the Dallas Morning News, attorney Mark Shank said there's no federal law that prohibits employment denial because of a bad credit report or score. When you have a tremendous amount of debt to the point where the negative information column on your credit report is starting to look as long as War and Peace, it's time to consider other options. You file a bankruptcy, eliminate the debt, and post-bankruptcy make your payments on time, put some money aside and rebuild.

Will it help you get a job? There's no way of knowing. But you'll be debt free so you can continue the job hunt and actually be able to answer your phone without the fear of being berated by a creditor.

People who file for Chapter 7 and Chapter 13 bankruptcies are relieved to find out that the majority of their household goods and personal property can be protected by exemptions (that vary depending on each state). That means you won’t need to expect the trustee to march into your home, have some breakfast, and walk out with your blender and DVD collection. But what worry a lot of filers are those “priceless” bands they wear around their fingers. Those are exempt…or are they? The short answer is no, there is no automatic exemption for sentimental value. However, there are ways to determine and even protect valuable assets like engagement and wedding rings.

Here’s a question: “Can I just pretend I don’t have any?” Now ask yourself this: would you swear to this lie in front of a judge, knowing it can land you in an even bigger mess? Remember that bankruptcy is a solution only for honest people. It’s both smart and constitutional to be up front about your assets so that we at Geraci Law can help you. Let your attorney know your concerns. He or she will probably recommend one of two things: one, get a low, trade-in valuation at a place like a pawn shop. You may be shocked to find that wedding and engagement rings won’t bring in more than several hundred dollars. Don’t take it as an insult, however; the lower the value, the easier it will be to protect your priceless asset. If it turns out that your jewelry is worth more than what our exemptions can protect, you may be able to “buy out” the equity of the rings from the trustee. And if all else fails, you can always file a Chapter 13 bankruptcy to save your assets.

A final suggestion: don’t wear anything excessively sparkly or obviously expensive to your meeting of creditors. It is not unheard of for the trustee to demand those assets right then and there! A bankruptcy court hearing isn’t Studio 54 or the opera: it certainly is not the place to show off what you have when you’re convincing people you can’t pay your debt.

Peter Francis Geraci is proud to announce the opening of 2 new offices to better serve our clients and continually be more accessible to you!

2808 N. Western Avenue, Chicago, IL 60647. At the corner of Western/Diversey/Elston.

625 S. 8th Street, West Dundee, IL 60118. On Route 31, 1.5 miles north of I-90.

As usual, you can find all of our office locations at our homepage, Infotapes.com.

The word bankruptcy has been in the news recently. However, the discussion is not directed toward consumers but state bankruptcies. With budgets spread so thin that the state budget seam is about to burst, a state bankruptcy is an interesting idea.

States are in fact, well bankrupt. With budget shortfalls and empty pension accounts, the inevitability of federal bailout request is obvious. It's an opportunity to lay out the current financial situation and plan for a better future. Walt Disney did it, Abe Lincoln did it, General Motors recently did it and their stock is making a comeback. Allowing states the option to file would address the problem and allow provide a solution.  Instead, governors are against the idea of state filing and have expressed some genuine concerns but have failed to come up with a better solution.  Illinois lawmakers decided it would be better to raise the income tax 66%.

This is the same state according to Governor Pat Quinn in a budget speech said, "Currently, Illinois pays its bills six to eight months behind schedule." If a consumer with a payment six to eight months behind did not address the problem, it's probable they would be sued, garnished and constantly harassed by creditors. Generally, the consumer may only have $10,000 in debt not the $8.7 billion of Illinois.

There are worries, concerns, and angst with any major financial situation. And while the majority of this entry is hypothetical because the legislation has not been passed - the idea of a state bankruptcy may not be as "havoc reeking" as some lawmakers have inferred.  Consumer bankruptcies have provided help for so many families why not extend the aid to the states. Be as brave as the constituents you represent lawmakers, give the option of state bankruptcy another look.