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    The Most Common Mistakes Made on the Bankruptcy Means Test

    Last updated 3 months ago

    The bankruptcy means test is a formula used by the bankruptcy courts to assess whether your income exceeds the maximum threshold for filing for a Chapter 7 bankruptcy. It was established with the intent to prevent debtors who may be able to pay some or all of their debts from filing for bankruptcy. If you file for a Chapter 13 bankruptcy, the means test can affect the length of your repayment plan. It’s quite common to make mistakes on the means test, which is why it’s always a good idea to work with a veteran bankruptcy attorney, who can complete this form for you.

    Misjudged Household Size

    Writing down your household size seems like a straightforward task; however, it’s common to make mistakes in this area. On the means test, your household size is used to assess where your income falls in terms of the median family income, in addition to your standard deduction amounts. Occasionally, a bankruptcy court will accept every member of the household as counting toward the household size. Most of the time, only members that are financially interdependent are included in this figure. For example, if you have someone renting a room in your home, that boarder would not count toward your household size.

    Improper Documentation of Income

    A number of minor factors can interfere with the way in which your income is documented and whether it matches the figure you include on the means test. For example, your average income may be affected by the issuance date of your paychecks or when you filed the bankruptcy petition. Your attorney can carefully examine your documentation to ensure it matches the income you list.

    Disallowed Deductions

    On the means test, you’ll list expenses that are deductible. A common mistake is to list expenses that are not deductible, such as 401(k) loan repayments and tuition for a child.

    When you partner with the team at Cutler & Associates, Ltd., our bankruptcy attorneys will make sure that all of your bankruptcy paperwork is accurate and filed on time. Contact our law firm today at (847) 505-0380 and ask us how we can make filing for bankruptcy as hassle-free as possible. Our bankruptcy attorneys are available in Aurora, Schaumburg, and other convenient locations in the Chicago area.

    How Unsecured Credit Cards Can Help You Rebuild Your Credit

    Last updated 3 months ago

    After filing bankruptcy, you may find it difficult to take out loans with favorable terms—if you’re even approved at all. Still, it’s important to get back in the saddle and start rebuilding your credit score. Though a secured credit card can help, you may need to take out an unsecured credit card to rebuild your credit more quickly. 

    An unsecured credit card allows you to borrow money that isn’t attached to any kind of lien—in order words, it’s a typical credit card. After you file for bankruptcy, you probably won’t get a credit card with a favorable interest rate or credit limit, but that won’t matter as long as you pay off your credit card on time and in full every month. You can only improve your credit score by proving that you’re a reliable lender.

    The bankruptcy lawyers at Cutler & Associates, Ltd. can help you understand what happens before, during, and after the bankruptcy process. Call our Aurora office at (847) 505-0380 to start improving your financial situation. 

    Understanding the Three Main Types of Bankruptcy Cases

    Last updated 4 months ago

    Even if you consider yourself to be a fiscally responsible person, there could come a time when you suffer financial troubles. If credit counseling isn’t enough to pull you out of debt, you may need to settle for bankruptcy.

    This video offers a look at the three most commonly filed types of bankruptcy. Chapter 7 liquidation involves the discharge of debts in exchange for certain pieces of non-exempt property. Chapter 13 reorganization allows the debtor to catch up on late payments through a three-to-five-year repayment plan. Chapter 11 bankruptcy is a lot like Chapter 13, but with a higher debt limit.  

    To learn more about common types of bankruptcy, trust the Aurora bankruptcy attorneys at Cutler & Associates, Ltd. We’ve been helping individuals get through the bankruptcy process since 1990. Call (847) 505-0380 to learn more. 

    What Qualities Should You Look for in a Bankruptcy Lawyer?

    Last updated 4 months ago

    Virtually anyone—even the fiscally responsible—can experience financial troubles in a relatively short amount of time. Needing to file for bankruptcy is nothing to be ashamed of; bankruptcy is a perfectly legal means of discharging insurmountable debts. To make sure the bankruptcy process goes as smoothly as possible, consider having a bankruptcy attorney help you file the paperwork. Here are a few qualities you should look for when researching bankruptcy attorneys in Aurora:

    Ample Experience

    Experience is important in any field—including bankruptcy law. To help ensure that you don’t run into any unexpected problems as you file for bankruptcy, you should hire a bankruptcy lawyer who has helped hundreds or even thousands of people file bankruptcy over a long, successful career. Cutler & Associates, Ltd. has been serving Chicago-area residents since 1990, and our legal team has more than 30 years of combined experience.

    Good Reputation

    It’s also a good idea to see how your bankruptcy attorney is perceived within the community. Consider looking at past client testimonials and check each attorney’s standing with the Illinois State Bar Association. Cutler & Associates has served numerous happy clients, is in excellent standing with the state bar, and currently has an A+ rating with the Better Business Bureau.

    Air of Professionalism

    You should always meet with a candidate before making your mind up. During your legal consultation, you’ll have the opportunity to explain your financial situation and explore possible alternatives to bankruptcy. This consultation is also a good time to get to know a lawyer and determine whether he or she is the kind of person you can trust with your financial wellbeing. A good bankruptcy attorney should be attentive, respectful, and always a phone call away.

    Call Cutler & Associates, Ltd. at (847) 505-0380 to discuss your finances and possible solutions to your outstanding debt. We provide compassionate, personal, and confidential bankruptcy services to people in Aurora, Skokie, Schaumburg, and surrounding areas. 

    A Look at Chapter 13 Bankruptcy Eligibility

    Last updated 4 months ago

    Most experts agree that filing for bankruptcy should be a last resort. If you have slipped behind on various payments and your debt has become insurmountable, you might ask a bankruptcy lawyer about your options. If you file Chapter 13 bankruptcy, you will develop a three-to-five-year repayment plan and keep your property. However, not everyone is eligible to file Chapter 13 bankruptcy. Read on to learn about the key eligibility criteria.

    Individual vs. Business

    Chapter 13 is reserved only for individuals and married couples. Corporations, partnerships, and even sole proprietorships cannot file for Chapter 13 bankruptcy. Business entities looking to file bankruptcy must opt for Chapter 11 bankruptcy instead. Though Chapter 13 bankruptcy is not an option for businesses, an individual who owns a business may file as an individual and discharge his personal debts through Chapter 13, which may help improve his business finances.

    Steady Income

    You’re more likely to be eligible for Chapter 7 bankruptcy if you have no or little income. However, since Chapter 13 bankruptcy involves repaying your outstanding debts over a three-to-five-year period, you need to prove that you have a steady income before you are deemed eligible. You must subtract your necessary living expenses from your total income and show the bankruptcy court that your disposable income can cover the payments outlined in your repayment plan.  

    Debt Limits

    There are also limits to how much debt you can discharge through Chapter 13 bankruptcy. You must have no more than $1,149,525 in secured debts (mortgage, car loan, etc.) and $383,175 in unsecured debts (credit card debt, medical bills, etc.). If your debt exceeds the limit, you may be better off filing Chapter 11 bankruptcy. Finally, you must be completely up to date on your income tax to be eligible for Chapter 13 bankruptcy.

    If you are in dire financial straits and your debt relief measures are not working, set up a meeting with Cutler & Associates, Ltd. Our Aurora bankruptcy attorneys have nearly 25 years of experience handling bankruptcy. Visit our website for more information or call (847) 505-0380 to set up a consultation. 

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