Last updated 4 months ago
There is a common misconception that consumer bankruptcy cases stem from poor spending habits and improper credit card use. But according to a 2009 CNN report, medical bills are actually responsible for approximately 60% of consumer bankruptcy cases. Most of these cases involve middle-class, well-educated homeowners who suddenly fall on difficult financial times.
Loss of Income Statistics
Between 2001 and 2007, bankruptcy petitions filed due to medical bills increased by approximately 50%. In a survey conducted in 2007, researchers found that a majority of bankruptcy cases were medically related because petitioners either had to mortgage their home to pay medical bills, lost income due to illness, or owed more than 10% of their pretax income in medical bills.
Loss of Health Insurance
Research also shows that 75% of petitioners filing for bankruptcy due to medical reasons were covered by health insurance. These petitioners still faced serious financial difficulties because there were gaps in their insurance coverage. Some petitioners had private insurance from their jobs, but lost this coverage when illness prevented them from working.
Loss of Options
These statistics indicate that medical bills may not be the direct cause of most consumer bankruptcies, but they do play a critical role. People who suffer serious health conditions are often unable to return to work and subsequently lose their jobs. Not only does this affect insurance coverage, but it also reduces household income. Families in this situation have to learn to live on a reduced income while simultaneously trying to pay for costly surgeries, physical therapy, and medication.
If you have fallen on difficult financial times and are considering filing for bankruptcy, it’s important to first speak with a bankruptcy attorney about your case. At Cutler & Associates, our attorneys are bankruptcy advocates, dedicated to helping clients resolve their debt issues. To schedule a consultation at our Aurora or Schaumburg offices, give us a call at (847) 868-2265.
Last updated 5 months ago
Individuals who owe money to banks, government agencies, or other lenders may be compelled to pay back the amount owed through a judicial process known as wage garnishment. While your state or employer’s procedures may vary slightly, here is a general overview of the wage garnishment process.
Lender Seeking Repayment
If a governmental agency or court is owed money, the creditor has the legal right to seek repayment by receiving a portion of an employee’s earnings. This is known as wage garnishment, and it is a mechanized process through which the creditor is paid back in recurring amounts from the debtor’s paycheck while the debtor is still allowed to continue working and earning a living. The U.S. Department of Labor determines the maximum percentages a creditor may ask for during the garnishment process.
Logistics of Garnishment
The paperwork requirements differ from state to state, but most garnishment procedures follow the same basic process. First, the creditor files a petition with the court noting the non-payment of debt. Second, the judge grants a formal order that compels the debtor’s employer to take a percentage of the debtor’s paycheck and send it to the creditor. Finally, the creditor must get in touch with the employer and ensure that the garnishment process begins via company payroll.
If you are in danger of wage garnishment, consult a bankruptcy attorney as soon as possible. Certain debts such as back taxes and unpaid credit card bills may be discharged through a Chapter 7 proceeding. However, judicial orders for child support, alimony, or criminal judgments generally cannot be adjusted during the bankruptcy process.
Illinois residents curious about their state’s garnishment process should consult the legal team at Cutler & Associates for more information. Our experienced lawyers will listen to your case and help determine whether any pre-garnishment options can help save your paycheck. Call us today at (847) 868-2265 to schedule a free appointment with a member of our bankruptcy staff.
Last updated 5 months ago
Consumers facing a legal issue may have a number of different attorneys to choose from in their metropolitan area. This video features a partner from Cutler & Associates who explains why their firm should be your go-to choice for help with all bankruptcy and debt settlement cases in the state of Illinois.
All Cutler & Associates clients will be assigned to an attorney who is knowledgeable about all relevant state and federal financial laws. Lawyers will always provide an email address and personal cell phone number on which they can be reached throughout the duration of the bankruptcy petition and discharge process. We also provide our fee agreements in writing.
At Cutler & Associates, our clients know that they are not alone. A dependable and experienced lawyer will be there to guide all debtors through the Chapter 7 or Chapter 13 process. If you would like to experience our exceptional service for yourself, call us today at (847) 868-2265 to schedule an appointment at any of our eight Chicago-area locations.
Last updated 5 months ago
If you owe the state or the IRS back taxes, it is highly likely that these agencies will attempt to recover the money through liens and levies. Fortunately, debtors may have the ability to minimize these collection actions through bankruptcy. Here is a look at why it may be helpful to file for bankruptcy for tax reasons.
If you have not paid your taxes or filed your tax returns for a number of years, the IRS may try to collect the debt. They can do this by placing a lien on your property. This legal term means that the government places a formal claim against all of your possessions and commits to preventing you from selling your assets before first paying off the IRS.
Relatedly, a levy is a formal government decision to seize property in order to satisfy a debt. If you own your home, the IRS may exercise its legal authority to sell the home in order to pay off your debt. Similarly, the government may levy your wages so that the IRS receives a portion of every paycheck until the taxes are paid off. Both Chapter 7 and Chapter 13 bankruptcies may allow you to discharge these back-owed taxes and start life anew.
The Automatic Stay
If your tax issues result in levies, it is important to remember that an automatic stay effectively pauses any collection actions by the IRS on the day that you file a bankruptcy petition. This can be useful if you anticipate being unable to pay the tax before the statute of limitations runs out. Consult a local bankruptcy attorney to see how to best use the Chapter 7 or Chapter 13 process to lower or eliminate debt owed to the IRS.
The office of Cutler & Associates can help Illinois residents assess the possibility of discharging their tax debts during bankruptcy. Regardless of whether you file for Chapter 7 or Chapter 13, the automatic stay can help you suspend all adverse actions and potentially get rid of your debt once and for all. Call our office today at (847) 868-2265 to schedule a free initial case evaluation.
Last updated 5 months ago
A Chapter 7 bankruptcy filing is often known as liquidation bankruptcy because it involves selling off property to pay off debts. Thankfully, many items are exempt from this liquidation—which allows households to keep many essential assets even after the court discharges their debts. In those instances, the bankruptcy trustee will not be able to touch most of the debtor’s important possessions.
Unfortunately, not all individuals qualify for a Chapter 7 filing. In order to successfully petition for the dismissal of unsecured loans, a household must earn less than the average annual amount of money within their respective state. This is known as the means test, and it was designed so that wealthy households could not take advantage of Chapter 7 while protecting their high-value assets.
If you are curious about the benefits of the liquidation bankruptcy, ask the skilled legal team at Cutler & Associates by calling (847) 868-2265. We have eight locations throughout the Chicago area and have been helping households of all income levels make the most of their bankruptcy petitions since 1990. Call today to begin your debt-free life.