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Why a Will is So Nice to Have – Give your assets to the relatives you choose

Have you ever wondered why people still go to the bother of writing a Will?  Well here is one example where it makes a lot of sense.

A few years ago, a woman named Jasmine passed away leaving an estate of 3 real estate parcels located in two states valued at around $800,000.  Jasmine  did not execute a Will or any other type of estate planning device.  Jasmine’s husband had already passed away.  However, the Jasmine did have two sons.   Both sons pre-deceased Jasmine.  So now the tough work begins in trying to find heirs.  Turns out one son died never married without any children.  No Heirs there.  The other child named Richard never married but allegedly was the father of a child.  However, at the time of the birth of the child, no paternity hearing was held and paternity was never determined.   Also, the son was not listed as the father on the birth certificate.   Richard never paid child support and no application for child support was ever made.  The mother allowed very little contact with the child and for the most part, Richard did not have much contact with the child and the extended family had only one visit with the child.

Quandary – The child without established paternity is now possibly the sole heir to the estate even though Jasmine had almost no contact with the child and the child made no effort to have a relationship with the child.  In this case Jasmines siblings, some of whom live on the parcels of real estate will not inherit if the heirship for the child is proven.

Solution for others:  A simple Will with a very basic provision could  have been written to clarify who inherited under the Will especially with regard to a child that no one is sure is an heir to the estate.  A well written Will might have honored the family that was tight knit as opposed to having all of the inheritance go to a child who was essentially never part of the family relationship and may not be an heir.

Usually a Will will name an executor to manage the estate and either make provisions for the testators children, descendants or specific people.  In families where unmarried couples exist or the paternity of children is questioned, specific people can be listed as beneficiaries eliminating the heirship problems discussed above.

 

LEGAL RUNNERS INC IS EVICTED

Legal Runners, Inc. is evicted from the Monadnock Building.  Pursuant to Case No. 2016-M1-702869, the Monadnock Building was given an order of possession on March 24, 2016 and by visual inspection has posted the property for no trespassing today April 28, 2016.  Attached is the docket from Cook County along with a picture of the trespass sign on the door.NCase=2016-m1-702869&SearchType=0&Database=1&case_no=&PLtype=1&sname=&CDate=IMG_3361

How Do I Sell My CCLT Chicago Community Land Trust Property Condo or Home

How do I Sell My CCLT Chicago Community Land Trust Property Condo or Home

Its Easy, get it listed for sale with the Chicago Community Land Trust (CCLT).  Then wait for a buyer to get approved by the CCLT.  Once approved, the buyer will be instructed to enter into a contract with you.  Once the contract is entered into, you will hire an attorney such as myself to review the contract, pull title and prepare the transaction for closing.  It typically takes as long as 90 days to close a CCLT sale because most buyers need their lender to do extensive underwriting thanks to the typical four mortgage financing used in most of these transaction.  When pulling title, it is important your attorney have experience in working with the CCLT system and that they are using a Title Company and Title Insurance Provider that is able to fully understand the complexities of closing a four mortgage transaction.

How do you get four mortgages?  The typical CCLT purchase will include a traditional first mortgage usually covering about 80% of purchase price.  The second mortgage which actually behaves like a first mortgage is the affordability rider and restriction that are recorded by the CCLT to ensure that not transfer of the property can occur without CCLT approval.  The third mortgage is typical a forgivable grant for $15,000 or more from the Illinois Housing Development Authority to assist with the purchase of the property.  The fourth mortgage is often a $5000 grant for closing costs that is also usually forgiven after 5 years.  Lastly, a fifth mortgage is often found as well which is often recorded in the first position.  This mortgage is the assumption by the buyer of the sellers original affordability loan/mortgage usually originally issued by the Illinois Housing Development Authority.  This is typically $40,000 is not forgiven for 30 years.

The Affordability Mortgage can be a real wake up call when selling your property.  You may list your property for sale at $180,000 thinking you only need to pay off the first mortgage and your closing costs if you have lived in the unit for five years or more, but then are surprised to learn that the $40,000 affordability mortgage doesn’t get forgiven for 30 years.  Currently the Illinois Housing Development Authority is required to review and approve this assumption by a new buyer at two board meetings.  This can often extend a closing to 6 months after the contract was entered into.  It is important to have your seller’s attorney carefully review title immediately after the contract is entered into to fully review all of the mortgages that must be paid off or assumed by the buyer.  This can radically change the sales price for the buyer if the buyer only expects to live in the unit for 10 years and doesn’t want to have to rely upon the Illinois Housing Development Authority to allow an assumption by the next buyer.   In practicality, this assumption should always be allowed to keep the property “affordable” but you are relying upon a government agency in the future and some buyers may be advised by their attorneys to reject this.

Given what we’ve discussed today, only one rule needs to be followed when selling a CCLT unit – have an attorney who has experience with the CCLT.

Prorate a Chicago Water Bill

Prorate a Chicago Water Bill.  First, get a copy of the most recent water bill.  Find out the billing cycle.  For a non-metered account it is issued every six months so look at the bill and use the month it is issued and then add six months for the other billing month.  Determine the last date through which the water bill has been paid or is supposed to be paid.  By the way on a non-metered bill, water and sewer are billed together and are typically each 1/2 of the total bill amount.  Then do the following calculations:

Closing Date – Last day of previous water/sewer billing period = Number of Days to charge per diem water/sewer charge

Last water/sewer bill total amount/180 – per diem rate

Prorated Amount that you should be credited at closing = Number of Days  X (times) Per Diem Rate

Example:

  • Closing Date is July 31, 2015
  • Last day of last water/sewer billing cycle:  April 30, 2015
  • Last total bill:  $379.14
  • 7/31/2015 – 4/30/2015 = 92 days
  • 379.14/180 = $2.11
  • 92 days x $2.11/day = $194.12

The amount the seller should pay the buyer at closing is $194.12

Conclusion:

Water Bills and Sewer Bills are traditionally not prorated in the Chicago, Cook County and Collar County areas.  But they could be prorated if needed and/or desired by clients.  In Chicago, the Chicago Water Certification is really the only thing traditionally required at closing to ensure that there is no lien from a prior unpaid water bill.  However, since the water bill issue date controls who is liable on that day by who is the owner on the day the bill is issued instead of who was the owner during period in which the bill accrues.

New Local Form and CM/ECF Event to file Proposed Orders to Employer to Pay the Trustee

New Local Form and CM/ECF Event to file Proposed Orders to Employer to Pay the Trustee

Tuesday, June 16, 2015

Effective June 12, 2015, new Local Form 25 and a new CM/ECF
event have been created to file a Proposed Order to Employer to Pay
the Trustee on Chapter 13s in the Eastern Division. The form is
located under the Chapter 13 section of the Local Forms.
The new event, Proposed Order to Employer to Pay the Trustee, is
available for filing by attorneys and trustees. Assuming debtor name,
case number and trustee are correct, the order will be dated, signed
and entered on the docket the next workday after filing.
Please be sure to use Local Form 25 and the new event, Proposed
Order to Employer to Pay the Trustee, to insure prompt processing of
the order.
If you need to file an Amended Order, select Amended on the PDF
and also on the final filing screen. Remember, you only need to file an
Amended Order if a previous order was entered on the docket.
Motions for Payroll Control no longer need to be filed.
Procedures have been posted and are available for your review.
ECF manual
Local Forms
If you have any questions, please contact our CM/ECF Help Desk
@ 312-408-7765.

Disabled Can I File Chapter 7 with Equity in Home

Disabled with Equity in Home Can I file Chapter 7 Bankruptcy. Are you disabled? Have you applied for disability but are waiting for approval? Have you applied, been denied and have appealed disability? Do you have over $20,000 in credit card debt and can pay your credit cards? Have you owned your own home for many years and now have equity? You’re not alone. Many Americans are now seeing the value of their home rise, but are saddled with unsecured debt such as credit cards.

Recently, I had a similar situation. Debtor had $50,000 in unsecured debt i.e. credit cards. Debtor had applied for disability but was denied and had been working half shifts for the last several years pending approval of disability. Debtor did not qualify with his income to get a new home equity loan or refinance his home, but has $80,000 of non-exempt equity. What does debtor do?

1) Cannot file Chapter 7. This will result in the home being sold in the bankruptcy to pay off creditors at 100% which results in debtor losing home, not getting full value of home and debts are paid off in same fashion as outside of bankruptcy.
2) Debtor cannot refinance or get home equity loan even though he has $80,000 of free and clear equity. This is because debtor cannot prove adequate current income to be approved for refinance or new home equity loan.
3) Debtor cannot sell his home because an apartment that matches his current income would not provide enough space for his family.
4) Debtor cannot file Chapter 13 because his income is inadequate and even if he had full disability pay, this is not considered income under Chapter 13 and the case would be dismissed.

The only solution; add a credit worthy person to the title of the home and have them apply for home equity loan, hope that full disability is approved soon and then pay off loan as normal with additional person being primarily liable for the refinance or home equity loan. This type of application will typically only apply to individuals who have family units or friends who are comfortable with the risk associated with this type of arrange.

50 Cent Files for Chapter 11 Bankruptcy

See the Article

50 Cent Filed for Chapter 11 Bankruptcy today. But he’s not going under – in fact this is a good example of bankruptcy re-organization. In fact, he has adequate assets to pay creditors but is using Chapter 11 to give him time to restructure his assets to pay debt and also to get protection from creditors as he waits for an appeal ruling. Chapter 11 is a big bankruptcy that is essentially entirely “custom” and very expensive to file. But for large asset/debt people and corporations, it remains one of the best tools to re-organize debt and protect yourself from creditors.

Chapter 13 is the less expensive, very common personal reorganization used by ordinary consumers to get caught up on house and car payments. It typically costs $4000 in legal fees and the fees are part of the reorganization. Typically, it costs as little as $310 to file a Chapter 13 and get immediate protection from credit card.

CCLT Chicago Community Land Trust

David C. Nelson has been practicing real estate law since 1994 and has represented clients in CCLT transactions since 2007.   Attorney Nelson is a CCLT trained, endorsed and recommended attorney for CCLT transactions.  Whether you are selling or buying a CCLT home or condominium, NLO Nelson Law Office is your first step in getting good legal representation.

Set Up Free Phone Consultation to Discussion CCLT Real Estate Purchase

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What is CCLT?

The CCLT is an organization within the City of Chicago that manages low to moderate income real estate properties in Chicago. The land trust essentially holds ownership of these properties, manages these properties and assists homeowners with the sale and purchase process. CCLT also offer assistance to those dealing with foreclosure or other financial hardships.

What do you need to know when selling?

When selling a CCLT property there are three things to remember:  First, there is most likely and affordability rider which is in the nature of a second or third mortgage.  This typically $20,000 mortgage either needs to be paid off when selling or needs to be passed to the new buyer with the approval of the Illinois Housing Development Authority.  Expect a four month approval process and possibly a six month selling process when needing this to be transferred to the new buyer.  Your sale price will be determined by CCLT’s equations allowing a reasonable rate of return on the property most likely around 4% per year.  You may not use realtors to sell your property.  The selling and marketing of the CCLT property is done by the CCLT itself.

What do you need to know when buying?

Buying a CCLT property can be a tremendous value, however, this type of property ownership carries with it three very important factors:  First, your lender should be either Harris, Chase, Wells Fargo or some type of lender that either has experience in lending to CCLT properties or is open to allowing their underwriters to allow the CCLT lien to be placed in first place.  Traditionally Harris Bank (Now BMO Harris) was the preferred lender, however, in the last year both Chase Bank, Wells Fargo and Wintrust have shown that they are able to provide loans for these types of properties.

 

Illinois power of attorney for healthcare 2015 form

Illinois power of attorney for healthcare 2015 form:

In 2015, Illinois has a new Statutory Power of Attorney for Healthcare form.  This new form is simpler and easier to fill out than its predecessor but also carries with it several pitfalls including making successor power of attorney nominations suggestive and not mandatory.  It also carries with it language in its directives that is unclear with regard to patients with dementia.  In short the new statutory form is the new “standard” form for Illinois and a great form to fill out when needed in a hurry.  However, having an attorney customize your Power of Attorney for Healthcare may be helpful.

For more information about how the new statute read, please visit:

  1. The Illinois Statutory Short Form Power of Attorney for Health Care is codified at 755 ILCS 45/4-10. The statutory text can be accessed at http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500450HArt%2E+IV&ActID=2113&ChapterID=60&SeqStart=2600000&SeqEnd=-1.
  2. The new health care power of attorney form is available as a downloadable PDF form by clicking on the link to the right:  IL Stat POA Health Care

Sources used in the drafting of this article:

Ed Finkel, Estate Planners Adopt and Adapt the New HCPOA Form, April 2015 • Volume 103 • Number 4 • Page 20; Illinois Bar Journal

 

Can you Discharge Tax Debt in Chapter 7

Can you Discharge Tax Debt in Chapter 7?  Yes.  Tax debt which is over 3 years old can be discharged.   Payroll Tax Debt from the operation of a business is not discharged.  Sales Tax Debt from the operation of a business is not discharged.  To properly determine with accuracy whether your tax debt is discharged in Chapter 7, you should order tax account transcripts for all years that you wish to discharge tax debt.  You can order tax account transcripts at no cost at by clicking here.

At NLO Nelson Law Office, we can help you determine whether your tax debt is discharged.  Do you have income tax debt that is 6 years old, but you had an offer in compromise or your filed your taxes late or you amended your taxes.  Using specialized software and our experience we can determine with accuracy the optimized date to file your Chapter 7 bankruptcy to maximize your tax discharge.

Did you run a business that failed?  Did the business owe sales tax?  Has the State Sales Tax Authority assessed tax liability against your personally as the President of the Company or as a responsible person?  If so, you may need help in paying this non-discharged tax liability back.  Typically a Chapter 13 bankruptcy is good option for forcing a reasonable repayment plan as well as eliminating other types of debt to allow you more ability to repay this debt back.

Did you run a business and no properly pay your employees payroll tax?  Payroll tax deducted from employees is the employees property held in trust by the employer as a fiduciary who is responsible for then paying these funds to the government as payroll tax.  If the taxes are not paid, the President of the Company, Managing Member of the LLC or the Sole Proprietor of a business is held personally liable for this debt.  Use a Chapter 13 to force a reasonable payment plan and reorganize and minimize your other debts.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. CALL 877-GO-GO-NLO (877-464-6656) FOR A FREE BANKRUPTCY CONSULTATION TODAY! SATURDAY APPOINTMENTS ARE AVAILABLE.