Chang and Carlin, LLP: May 2013

Tuesday 21 May 2013

Lien Stripping Defence: Detailed Analysis

During the bankruptcy process, understanding the distinction between secured and unsecured debt is very important. If you are contemplating bankruptcy, it is critical for you to thoroughly comprehend the bankruptcy process. The bankruptcy attorneys at Chang and Carlin, LLP in Chicago can help you understand bankruptcy procedure and take the steps necessary to ensure that you emerge in the best financial position possible. One such necessary step is “Lien Stripping”.

If you have a second mortgage on your home and are in danger of losing it to foreclosure, Chapter 13 may offer a solution. In Chapter 13 Bankruptcy there’s a procedure called ‘Lien Stripping’, that changes a secured second mortgage or home equity line of credit into an unsecured debt, which not only eliminates your monthly payment, but usually lowers your total debt by thousands of dollars.

Our experienced Bankruptcy Lawyers in Chicago can help you through the process, which involves the following steps:

· 1. Our experienced Chicago Chapter 13 Bankruptcy attorneys can help you determine whether you qualify for Lien Stripping or not and, if you do, we’ll help you remove the lien from the second mortgage.

· 2. A Chapter 13 debtor can ask the bankruptcy court to strip away the second mortgage debt because the value of the home is less than the amount of the first mortgage. An attorney can help you determine the fair market value of your property, so that you can establish whether there is enough equity to secure a first mortgage. If the fair market value of your property is less than the total amount of money due on the first mortgage, a second and third mortgage can be stripped off the house. By stripping off this lien, which is treated as an unsecured claim, you may be able to wipe out debt in order for you to more easily pay back your existing debt as part of your Chapter 13 payment plan.

“Lien stripping” is one of the most powerful forms of debt relief available in Chapter 13 bankruptcy. If you are considering filing Chapter 13 bankruptcy in Chicago and are interested in the possibility of “lien stripping” to eliminate or reduce liens or mortgages on your home or other property, please contact Chang and Carlin, LLP today. For an initial FREE Bankruptcy Legal Consultation, contact our law offices in Chicago.

Disclaimer: The content provided by Chang and Carlin, LLP is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure services, or Real Estate legal services, call our law firm at 1-866-790-8601 for a Free Legal Evaluation. Chang and Carlin, LLP serves clients in Chicago, Schaumburg. Joliet, and Warrenville.

Chapter 7 Bankruptcy and Trusts Management

People use trusts as a way to manage their property or to pass on their wealth to their future generations. One of the most common questions that our Chapter 7 Bankruptcy attorneys in Chicago encounter is: Will our trust be in jeopardy in a Chapter 7 bankruptcy? Well, it depends on the kind of trust you have. Let’s explain:

In case of a self-settled trust:

If you created a self-settled trust and transferred any assets to the trust during the last ten years, and if you cannot exempt those assets then the Chapter 7 Trustee assigned to the case is free to seize and liquidate them for the benefit of your creditors.

In case of a revocable trust:

In a revocable trust, the trust beneficiary, or person waiting to receive the trust, does not have immediate control of it. Instead, the person who is the creator of the trust, called a grantor, has control. In a Chapter 7 Bankruptcy case, every asset is liquidated in order to give the debtor a clean slate. A revocable trust is a type of trust that is in danger of being revoked and returned to the grantor for liquidation.

In case of an irrevocable trust:

In case of an irrevocable trust, the beneficiary, or filer, actually has control over the assets available to them; it is possible for creditors to access the contents of the trust for the purpose of repaying debt. With this type of trust, you can shield your assets, such as a life insurance policy, from estate taxes for future generations. Chicago Bankruptcy Lawyers at The Law Offices of Chang and Carlin can help you decide if an irrevocable trust is right for you and your family.

In case of a spendthrift trust:

A spendthrift is one who spends money with disregard. This is where the term "spendthrift trust" originates. In a Chapter 7 Bankruptcy, a spendthrift trust is protected from being revoked and the property sent back to the grantor. The bankruptcy court honours spendthrift clauses in trusts. If the person that files for the bankruptcy is the beneficiary of a trust that has a spendthrift provision, that trust will be protected from the bankruptcy court.

Bankruptcy is a way to help individuals dealing with financial hardship get back on their feet and make a fresh start. There are exceptions that allow the residents of Chicago to file Chapter 7 Bankruptcy in Chicago and still protect their trusts. For all your bankruptcy, foreclosure, IRS and tax issues, and real estate legal needs, Chang and Carlin, LLP will provide the necessary legal experience and personal service that you deserve. For an initial FREE Bankruptcy Legal Consultation, contact our Law offices in Chicago.

Why Timing is Important in Bankruptcy Cases

Do you have problems paying your debts? Are you threatened with wage garnishment, foreclosure or repossession? If so, you may want to consider bankruptcy as a way to deal with these problems.

Many people in the Schaumburg, Chicago, Joliet and Warrenville area consult Chang and Carlin, LLP Law Firm to determine whether to file for bankruptcy or not. Our experienced Chicago Bankruptcy attorneys tell those people that they have the right under federal law to file for bankruptcy relief from their creditors. However, it can also be very important to choose the right time to file for bankruptcy relief.

Timing is a critical factor in planning a bankruptcy case filing, due to the following reasons:

a) You should always wait as long as possible before filing bankruptcy because you can do so only once every six years. You should try to save this valuable option until you’re absolutely certain that you need it.

b) Also, you may not need to file bankruptcy even though creditors are threatening you because you may have no non-exempt property or wages.

c) Sometimes, it's better to file for bankruptcy immediately. Keep in mind that you must receive the required credit counseling within 180 days before your bankruptcy case is filed.

d) In order to file a Chapter 7 Bankruptcy case, most individuals are required to take and pass the “Means Test”. For many people, means test income can change every month, so you may not qualify to file a Chapter 7 one month, but maybe you will the next month. Being able to delay filing means being able to file when you are likelier to pass the means test. With a Chicago Bankruptcy Attorney to guide you through this process, you can be sure that your income and expenses are properly represented

e) Certain debts, such as income taxes and cash advances, which only become dischargeable after certain amounts of time, have passed.

f) Timing the bankruptcy filing is also critical in preserving assets in bankruptcy cases.

Contact a Chicago Bankruptcy Lawyer at the Chang and Carlin LLP Law offices to learn more about how we can help with the means test and bankruptcy in general. For an initial FREE Bankruptcy Legal Consultation, contact our Law offices in Chicago. For all your bankruptcy, foreclosure, IRS and tax issues, and real estate legal needs, Chang and Carlin, LLP will provide the necessary legal experience and personal service that you deserve.

Disclaimer: The content provided by Chang and Carlin, LLP is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure services, or Real Estate legal services, call our law firm at 1-866-790-8601 for a Free Legal Evaluation. Chang and Carlin, LLP serves clients in Chicago, Schaumburg. Joliet, and Warrenville.

Applying for Home Loan After Bankruptcy

Bankruptcy can negatively impact every aspect of your life, but it has a particularly sinking effect on your credit score. A declaration of bankruptcy can lower your credit rating by as much as 220 points for up to 10 years. However, with the help of experts like Chang and Carlin LLP’s Chicago Bankruptcy attorneys, you should be able to purchase a home sooner than you envisioned.

While a bankruptcy will appear on your credit report for up to 10 years—depending on the type of bankruptcy you file, the good news is that most people seeking to buy a home are eligible for a mortgage within two-years of filing bankruptcy.

Is it possible to get mortgage financing before two years?

Yes. You may be able to get a mortgage sooner, but the terms (i.e., interest rate, etc.) won't be as attractive as it would be if you can wait the two years, and you'll be paying a higher interest for up to 30 years.

How to rebuild the credit score after bankruptcy?

This can be done by two ways:

· Obtaining an unsecured credit card is nearly impossible after declaring bankruptcy, so your next best option is to apply for a secured credit card. A secured credit card gives you credit- limited to the amount you have to deposit with the issuing bank.

· Though obtaining an instalment loan to rebuild your credit can be tricky because of your bankruptcy past but another way to improve your credit.

Some other useful tips:

· Obtain a co-signer. The potential co-signer must be someone who has good credit and a healthy financial status. In addition to improving your chances of loan approval, a co-signer may also be able to help you get a lower interest rate on your mortgage.

· Pay all your bills on time and work on saving money.

· Stay at the same job for a good length of time.

· If needed, seek assistance of experienced Real estate attorneys in Chicago.

Preventing Foreclosures in future

When most people buy a new home, the last thing they ever expect to contend with is foreclosure. However, when you fall behind on your loan it may seem as if it's impossible to get caught up.

Expert foreclosure attorneys in Chicago can help you explore various legal options available.

Contact Chang and Carlin, LLP for a Free Bankruptcy Consultation Today!

Chang and Carlin L.L.P has established itself as a respected Bankruptcy and Real Estate legal firm representing a diverse clientele in Chicago, Illinois and the surrounding areas. Our Real Estate attorneys help you manage everyday real estate matters, as well as more complex situations that require the experience of skilled attorneys.

Chang and Carlin, LLP, also offers expertise to clients who find themselves in financial trouble and need guidance to regain financial stability. If you are filing for Chapter 7 or Chapter 13 Bankruptcy in Illinois, get in touch with us today for a Free Legal Evaluation.