Where’s My Money?

It happens to all of us. You provide exceptional service to a client but when it comes to getting paid, the check never arrives. After making several demands for payment to no avail, what are your options? You can either let it go or take the legal route to try to collect what is owed to you.

The process of collecting money is a fairly complicated. It can take as little as 30 days or as long as several years to collect. There are numerous factors to consider before filing a suit, such as:

  • The amount of debt
  • The type of debt
  • The location of the debtor
  • The likelihood of collectability

Before any suit is filed, it advisable to mail the debtor a simple demand letter. The letter should states the amount due, what the payment is for and if payment is not received within a certain amount of time, a lawsuit may be filed. There are several reasons for this letter. First, the debtor may pay right after receipt of the letter to avoid litigation. Second, the letter verifies the correct mailing address of the debtor. The correct address is necessary to properly serve the complaint if a lawsuit is filed.

If the demand letter fails, it is necessary to determine whether it makes financial sense to file a lawsuit. The cost to file a lawsuit in Cook County is around $340, plus a service fee for the Sheriff. Attorneys usually take collection cases under contingency basis, meaning that the attorney will not get paid until he or she recovers. The contingency varies but it is around 30% of the amount owed. So if the debt amount is fairly low, it may not make financial sense to litigate.

Once the complaint is filed, it has be served on the debtor. This may sound like a simple step but often times the debtor cannot be located and multiple attempts may be needed to obtain service. Sometimes the debtor is nowhere to be found and the case is dismissed for lack of service.

Once the debtor is served the case is set for trial. If the debtor does not show up a default judgment is entered in favor of the creditor. If the debtor shows up or hires an attorney, the case is litigated until trial. Either way, the goal is to get a judgment against the debtor.

So you have a judgment? Great! Now what? The attorney has to enforce or collect on the judgment. The first thing that the attorney should do is file a citation to discover assets. This “fishing expedition” allow the attorney to search for any assets of the debtor which include bank accounts, real estate property or collectibles of value that can be sold at an auction. If the debtor is employed, a wage garnishment can be issued. If the debtor has real estate property, a judgment lien can be attached to the property that can be satisfied from the proceeds once the property is sold.

What happens if the debtor has no assets and does not work? The judgment is then uncollectible. The creditor may try to issue another citation to discover assets in a couple of years to see if the debtor’s financial situation has improved that would allow recovery.

It is also possible to settle the case with the debtor by agreeing to take a lesser amount then is owed or enter into a payment plan.

This was a short overview of the collections process. For more information please contact Attorney Artur Zadrozny at 312-375-1704 or artur@bzlaw-firm.com

 

At What Age Can a Child Be Left Home Alone?

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Illinois is the only state besides Maryland to have a law specifying a minimum age a child must be to be left home alone.  According to Illinois law,705 ILCS 405/2-3(1)(d), it is considered child neglect to leave a child under 14 years old without supervision for an unreasonable amount of time.  There are 15 factors (listed below) that the Court will look to when deciding if a child has been left alone for an unreasonable amount of time.

Additionally, the Illinois DCFS publishes a booklet entitled “Parenting Children to Stay Alone” that provides some tips on preparing children to stay home alone. However, it also warns parents that they “are legally responsible for their children’s welfare until they reach adulthood. Part of caring for children is providing adequate supervision.”  Children may be potentially removed from their home and placed in the State’s care until a court decides that the home is safe for the children to return to.

Essentially, parents and guardians must think carefully about many things before leaving their children alone.  This is important, even if a child is left alone for a short period of time.  But if you always put the child’s best interest first, you will make decisions that will benefit your child. When children are placed in situations of independence that they can handle successfully, it can help them learn responsibility and self-reliance and can also build their self confidence.  However, if the child is not ready, it can create a frightening and potentially dangerous situation for both the child and the parent.

15 Factors Courts Look To:

  1. Age of minor;
  2. Number of minors left;
  3. Special needs of minor;
  4. Duration of time in which the child was left;
  5. Condition and location of the place where the child was left;
  6. Time of day or night when the child was left;
  7. Weather conditions (adequate heat or light);
  8. Location of the parent or guardian;
  9. Whether the child’s movement restricted (was the child locked in a room?);
  10.  Whether child was given phone number of a person or location to call in the event of an emergency;
  11. Whether the child had enough food;
  12. Whether any of the conduct is attributable to economic hardship or illness and whether the parent or guardian made a good faith effort to provide for the health and safety of the child;
  13. The age and physical and mental capabilities of the person who provided supervision for the child;
  14. Whether the child was left under the supervision of another person; and
  15. Any other factor that would endanger the health and safety of that particular child.

Written by: Kathy E. Bojczuk, Attorney at Law

Want to Sue the Devil? Read This First

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Since Halloween is a time for the weird and the bizarre, we thought it would be appropriate to detail a case that was filed against Satan himself. The case is Gerald Mayo v. Satan and His Staff, filed in 1971 in the United States District Court for the Western District of Pennsylvania. Mr. Mayo alleged that “Satan has on numerous occasions caused plaintiff misery and unwarranted threats, against the will of plaintiff, that Satan has placed deliberate obstacles in his path and has caused plaintiff’s downfall.” Mr. Mayo claimed that his constitutional rights have been violated by these acts of Satan. Unfortunately for Mr. Mayo the case was dismissed on procedural grounds.

First, the court had “serious doubts that the complaint revealed a cause of action upon which relief can be granted by the court.”

Second, the court questioned whether the plaintiff may obtain personal jurisdiction on Satan by stating that: “The complaint contains no allegation of residence in this district. While the official reports disclose no case where this defendant has appeared as defendant there is an unofficial account of a trial in New Hampshire where this defendant filed an action of mortgage foreclosure as plaintiff. The defendant in that action was represented by the preeminent advocate of that day, and raised the defense that the plaintiff was a foreign prince with no standing to sue in an American Court.” This is the Court’s reference to a short story by Stephen Vincent Benét titled The Devil and Daniel Webster.

Third, although Mr. Mayo’s request for a class action seemed to meet most of the criteria, the court could not determine if the representative party will fairly protect the interests of the class.

Finally, Mr. Mayo “has failed to include with his complaint the required form of instructions for the United States Marshall for directions as to service of process.” So what’s the moral of the story? If you want to sue Satan, find out where he lives first.

Happy Halloween!!

Real Estate: Crash Course For Buyers

Knowing what to expect brings peace of mind especially for what is often the largest transaction a person will undertake in a lifetime. Buyers should take all measures possible to make sure that the deal goes smoothly and to avoid any disastrous bombshells down the road.

After weeks, if not months of searching for the perfect home, negotiating the purchase price with your agent, getting the Seller to accept your offer, you now have a binding contract, right? Not quite. Even with a signed contract, both the buyer and seller have an opportunity to have their attorneys review the contract carefully. Virtually all standard real estate contracts contain “attorney approval” or “attorney review” provisions. The buyer’s attorney’s job is to review the terms of a contract to make sure the contract does not take advantage of the buyer. The attorney typically focuses on the purchase price and personal property included in the sale, the mortgage contingency clause, the inspection clause, and the clause that governs penalties for default. In addition, the attorney makes sure the various prorations (taxes, rents, association dues, etc.) are fair to the buyer. Also, the attorney insures the seller provided the required disclosures relating to the condition of the property (including the radon hazards, mold and lead, if required), home warranties, and previous home insurance claims.

Normally, a contract will also contain an inspection provision providing the buyer with the right to obtain a professional inspector (or to inspect the property themselves) to check the property for defects. Inspection clause provisions vary from contract to contract. Some allow the buyer to request repairs be made to the property, some require that repairs exceed a certain dollar amount and others merely allow the buyer to cancel the deal because the condition of the property is found to be inadequate. The buyer’s attorney will assist the buyer in negotiating with the seller’s attorney regarding repairs.

If the inspection reveals some defects or recommended repairs, the buyer should consider requesting from the seller a closing credit to cover the costs of those repairs, or request that the repairs be made before the closing date. However, the buyer may choose to walk away if the repairs are major or accept the property as is, especially if the purchase price is much under market value. During negotiations, buyers should work with their agents and attorneys to discuss these matters further and determine what route would be the most appropriate to take. (For more information on inspection negotiations, check out our previously written article titled: “Real Estate Matters: Negotiating After Home Inspections,” August 2013, http://bzlaw-firm.com/blog.html )

Keep in mind that the inspection and attorney review periods usually last for a short period of time, often five to ten days. The terms of the contract will indicate how much time is provided. Once the periods expire, no additional changes may be made, unless the parties agree to an extension of the deadlines. This request must be made prior to or on the deadline. Therefore, it is imperative that the buyer forward a copy of the accepted contract to his or her attorney as soon as possible.

Once attorney review and inspection periods expire, the buyer’s attorney will help the buyer manage the mortgage contingency. This is only for transactions where the buyer requires financing to purchase the property. If the buyer is paying cash, then no mortgage contingency is necessary. But if the buyer needs financing to cover most or some of the purchase price, then there will be a mortgage contingency deadline. This allows the buyer to lawfully cancel a transaction if s/he cannot obtain a loan that satisfies the terms of the mortgage called for by the contract.

The next undertaking is to make sure that the title to the property is clear or will be clear by the closing date. Once the seller’s attorney forwards to the buyer’s attorney a Title Commitment document, then the buyer’s attorney evaluates the document to make sure that there are no lose ends. If every item as discussed above is resolved, then the next and final step is to attend the actual closing date.

By the closing date or, at times, on the same day, the buyer’s lender will deliver a package of documents to the title company. This package is comprised of many documents, including the note and mortgage and also the closing statement which includes all of the lender fees. At closing, the buyer’s attorney will walk the buyer through all the stack of thick, often repetitive documents, stressing the important terms and protecting the buyer’s rights against the bank.

The Seller’s attorney will also forward to the title company a package of documents, including the deed to the property and the seller’s closing statement. The buyer’s attorney will analyze these documents to make sure that the buyer is purchasing (and the seller is conveying) the correct property, that all taxes and liens are paid, and that title is cleared and insured by the title company. This usually involves a review of the documents and a survey (if purchasing a condominium, a survey is usually not required) provided by the Seller.

The services of a competent, approachable and professional real estate attorney greatly reduce the likelihood of problems down the road, make the whole process easier and smoother, and more importantly creates peace of mind to buyers in this very long and complex maze of buying a home.

By: Kathy E. Bojczuk, Attorney

Myth 2: I’ll Never Be Able To Get Credit Again

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It is a misconception that obtaining credit after filing for bankruptcy is next to impossible. Before we get into the details, your credit score should be one of the last things to worry about when making the decision to file for bankruptcy. This decision should be a sound one, taking the totality of circumstances into consideration, including your income, the amount you pay to your creditors each month, and the psychological toll of having a large amount of debt with little likelihood of paying it off. 

Credit card companies are really good about marketing. They make you believe that a you have to have a good credit score in order to live a happy and successful life. You see it everywhere: television commercials, radio ads and whenever you apply for any kind of loan. They drill the idea into your head that only a good credit score will allow you to purchase that dream car or dream home and that the number one reason why your credit score will go down is bankruptcy. The credit companies force the idea that it is infinitely better for you to pay that minimum payment each month for the debt that will take you decades to pay off just to preserve that good score rather than to file for bankruptcy. The truth is, however, that if you file for bankruptcy, the credit card companies will, in most cases, get paid cents on the dollar or nothing at all.

There is no doubt that filing for bankruptcy will damage your credit score and that bankruptcy may stay on your record for up to 10 years, but the impact bankruptcy will have on the score depends in large part on what your score was before filing. If your score was low already, bankruptcy will not have much of an impact on the score. In fact, over time, it will most likely increase it. Why? Because bankruptcy gets rid of the toxic debt that prevents you from paying your bills on time, and thereby damaging your credit as a result. With a clean slate, you are more likely to pay your bills on time.

But can I get a loan or a credit card after bankruptcy? Yes, you can. It may be tougher and the rate may be higher, but banks do offer loans post-bankruptcy. In fact, many report that they start seeing credit card offers in their mailboxes shortly after obtaining their bankruptcy discharge.  Many financial institutions offer secured credit cards where you can put down a couple hundred dollars, something like a deposit, and then you are able to use it as a regular card. If you make your payments on time each month, those payments will be reported to the credit agencies, raising your score. If you are planning on getting a car loan, you may consider having someone to co-sign on the loan. Again, the payments will get reported to the agencies which will have a positive impact on your score.

Again, filing for bankruptcy is not an easy decision to make. But the notion that you will not be able to get credit again after bankruptcy is simply false. Please contact our office if you are struggling with debt in order to obtain a competent evaluation of your financial situation. 

Myth 1: People Filing for Bankruptcy Have No Money

A popular question a bankruptcy attorney often gets is: “If your client is filing for bankruptcy, how can they pay you?” This question assumes two things. First, that bankruptcy takes everything that a person owns and leaves him with nothing, and second, that the person filing for bankruptcy is completely penniless. Both assumptions are incorrect.

The intent of bankruptcy is to give a person a “fresh start”. The bankruptcy code allows for certain exemptions that determine whether you can keep certain property or not. For example, in a Chapter 7 case, if  you own a car that is worth $2,000 and the exemption is $2,500, you can keep the car after the bankruptcy. What if the car you is worth $10,000 and is paid off? In that situation, the trustee will most likely sell the vehicle, pay you the exemption amount and pay the rest to your creditors. Keep in mind that it will cost the trustee to sell the vehicle so if the value of the vehicle is slightly above the exemption amount, it may not be worthwhile for the trustee to go ahead with the sale. In a Chapter 13, a person can keep all their possessions while making a monthly payment to the trustee that will pay off a certain percentage of their unsecured debt. (Generally, all secured creditors have to be paid in full).

So how can debtors pay their bankruptcy attorney? In a large majority of bankruptcy cases, debtors have steady jobs and regular income. What they also have is large debt. Remember that the idea behind bankruptcy is “debt relief”. Because of the large debt, the monthly expenses of individuals who struggle financially exceed the monthly income and they have trouble making their monthly bills.  Imagine a person that has to pay $500 in credit card bills each month. Once a bankruptcy case is filed, the debtor no longer has to pay those bills and has additional income of $500 per month.

In short, most of people who file for bankruptcy are employed. The reason they file is because their debt becomes unmanageable and it makes financial sense to consolidate the debt either through a Chapter 7 or Chapter 13 case.

Bankrupty Filing Fee Increase

As of June 1, 2014 the filing fees for bankruptcy cases will go up in the Northern District of Illinois. For Chapter 7 cases, the fee will increase from $304 to $335. For Chapter 13 cases, from $281 to $310. For Chapter 11 cases, from $1,213 to $1,717. Please contact our office if you have questions about these fee changes.