FAQ's. Common Questions answered here.

Going through something as difficult as a major legal event can leave you filled with questions about the past, present, and what to expect in the future. Get answers to some of the top questions I receive, to help put your mind at ease. Check back often for even more answers to your legal questions. Better yet, give us a call to see how we can help. 


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  • Do I have to pay for my car if it is repossessed?

    Worried that the repo man is looking for your car? If you can't afford your payments and are going to just let the car be repossessed, you may still have to pay back the remaining car payments (and costs of repossession, storage, auction fees, etc) which will be offset by the amount that it gets sold for at auction. This is what is known as the "deficiency" amount. So essentially, you are getting stuck paying for a car that you no longer have. Bankruptcy is a beautiful thing in this respect in that it can "wipe out" the deficiency and you walk away from your car without having to worry about getting stuck with a bill later.

    Bankruptcy is a powerful too and has multiple benefits when used correctly and in appropriate circumstances. To learn more about this form of debt relief, be sure to request our free book "Bankruptcy Myths Exposed". 

  • Should I sign a bankruptcy reaffirmation agreement on my house?

    Different parts of the country may treat reaffirmation agreements according to local custom. In Illinois, many believe that reaffirmation of a house is a bad idea. Keep in mind though, that without a reaffirmation agreement, your payments will not be reported to the credit agencies, thus boosting your credit score. Instead, your credit report may show that the mortgage was "included in bankruptcy". The credit report aspect  may not be a good enough reason to reaffirm your house as there are ways around it, namely by letting the credit reporting agencies know what is going on.


  • If I am struggling with my second mortgage, what should I do if I can't repay it?

    If you are struggling with your second mortgage, you aren't alone! Second mortgages are just what they sound like, an additional mortgage on the same home. Many are structured as Home Equity Lines of Credit (“HELOC”s) and put money into the homeowner’s pocket at the time the loan is taken out.  People take them out for all kinds of reasons- home improvement, to pay down debt, etc.  By comparison to the first or principal mortgage, the amount may seem inconsequential but when stacked on top of the main mortgage and when interest is added, the monthly payment becomes a problem for many people. Since the loan is secured by the house (which becomes the collateral), second mortgages are only given out to the extent that there is equity in the home. Nowadays, many people with old HELOCS or second mortgages no longer have the value in the home that they once did, given the recent housing market crash which leaves them paying more in total than what they owe on the house.

    If this sounds familiar and you are having a hard time keeping up with bills, you may want to see if you qualify for a Chapter 13 bankruptcy because it is possible that you will end up only having to pay for the first mortgage and not the second. To learn more about debt relief for homeowners in Illinois, give us a call at 630 250-8813 to set up a free, no obligation consultation. Or, if you aren’t ready to sit down and speak with someone and would just like some information, claim your free book “Bankruptcy Myths Exposed” by filling out our webform. 

  • I filed for Chapter 7 and just got a personal injury settlement. Is my money at risk?

    The #1 Rule in Bankruptcy is that you must disclose everything!! That means that proceeds from a personal injury case have to be listed on Schedule B of your filing. Even if you do not have a settlement offer yet and your injury case is pending, it is still a possible source of recovery and a claim that must be listed. The funds or claim become part of what is known as "the bankruptcy estate". The good news is that, in Illinois, so long as the claim is properly claimed as an exemption - either all of it or a part of it can be protected (meaning you can keep all or some of it). But you must, must, must list it. If your bankruptcy lawyer is thorough, he or she will have asked you if you have a personal injury claim pending and will know what to do with it. Don't forget to also list all of your medical bills associated with the accident on your bankruptcy schedules! 

  • If I file for bankruptcy, will this affect my spouse's credit?

    Unless you have joint debts, your spouse's debts and credit will not be affected by a bankruptcy. Many couples keep separate finances and people file for bankruptcy all the time without their husband or wife's involvement or even their approval. That being said, the assets of the marriage and your spouse's income can affect your bankruptcy. It is best to discuss your situation with an attorney so that you can take the best possible course of action for you. 

    Located in Schaumburg and Itasca, we are available to help discuss your debt relief options. You might not need a bankruptcy and if that is the case, we will tell you. Call now to schedule a free bankruptcy consultation at 630 250-8813. Your free book is waiting for you!

  • Which court system will hear my bankruptcy case?

    By way of the United States Constitution, bankrputcies are a part of our federal court system. Bankruptcy cases then are heard by the United States Bankruptcy Courts which are further divided into districts. People who file for bankruptcy in the Chicago area and most of Northern Illinios will have their cases filed in the Northern District of Illinios. 

    If you are going to be filing for Chapter 7 relief, you don't even have to "go to court" and stand before a judge - unless something out of the normal happens. For the most part, the only place that you have to formally show up to is your 341 Creditors Meetings. Sometimes they are held at office buildings and other times they are held in a courthouse which may even be a local or state courthouse- for convenience sake. 

    If you are curious about bankruptcy, be sure to get a free copy of my book "Bankruptcy Myths Exposed" or give us a call to set up a free bankruptcy consultation. 

  • What does Bankruptcy Mean and Which Kind of Bankruptcy is the Best?

    Bankruptcy is a legal proceeding based on the laws of the United States and what is known as the Bankruptcy Code. Individuals can start a bankruptcy case by filing a bankruptcy “petition” and various "schedules" with the Bankruptcy Court. A bankruptcy allows individuals (and some businesses in a Chapter 7) to eliminate or repay debt in a way that is going to benefit the "debtor"- or the person who is filing for bankruptcy.  It is done following the rather strict rules of and under the protection of the United States Bankruptcy Court. 

    Chapter 7 and Chapter 13 are the two most common types of bankruptcy that people file for.  Most likely it is your circumstances that will dictate which bankruptcy you would use. Some people are Chapter 7 candidates. Some are candidates for a 13. Few people may be able to pick, and some should do neither.

    If you are facing overwhelming debt and wondering if you should file for bankruptcy but are afraid to go talk to a lawyer, don't be.  A good lawyer is going to be honest with you and tell you if you are not a good candiate. If you are, then you will know your options and can decide. Contact O'Connor Cadiz Law for a confidential, no cost consultaiton. Don't forget to ask for a free copy of our new book "Bankruptcy Myths Exposed!"

  • Does the IRS have to leave me alone if I file for bankruptcy?

    While creditors have to take a "hands off" approach while you are in bankruptcy, remember that the IRS is no ordinary creditor. The automatic stay still applies to the IRS in that they cannot seize your income, your property or issue a tax lien while you are in bankuptcy, but they can issue a deficiency notice, audit you or demand that you file your tax return as these are not attempts at collection but rather other IRS functions.

    Bankruptcy law is full of nuances and exceptions. If you are considering bankruptcy and also having problems with the IRS, be sure to talk to a bankruptcy attorney or request a copy of our free debt book.

  • How long will bankruptcy damage my credit score?

    Your credit score will be reduced after bankruptcy and while it is impossible to put an exact time frame on it since it will depend on a variety of unique factors, remember that the ding to your credit by showing a bankruptcy is short term. In the long run, you will have less debt and will show your creditors that you have done something about your financial problems. Then, over time, your credit score can be built up again by building a new, positive financial life. 

  • In Illinois, how much can creditors garnish my wages for?

    Your paycheck can be garnished by your creditors, but wage garnishments don't just happen.  First, whomever you owe money to has to first get a judgment entered against you. Before that can happen, they will sue you.  Once the wage garnishment is allowed, it isn't up to your creditor how much they can take. (Then they'd take 100% of your pay, right?) The amount they can garnish is affected by other garnishments that you might already have on your paycheck. Under Illinois law, your employer cannot deduct per week an amount that exceeds 45 times the minimum wage (state or federal wage- whichever is higher). Before you start worrying about creditor wage garnishments and try to calculate the amount that can be taken out of your pay, talk to a bankruptcy attorney about how this might be prevented. The real answer is that you don't want your creditors getting any amount of your pay! Concerns over wage garnishment is a warning sign that it might be time to figure out a permanent solution to your debt problems.  Request our book "Bankruptcy Myths Exposed" which is free for people who live in the Chicago area (Cook, Kane and DuPage Counties). This will answer your questions and hopefully, offer you new hope so that you don't have to worry about wage garnishments!