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Illinois

Claims Discharged in Chapter 7 Revive If the Case Is Converted to Chapter 13

Courts are split over the effect on claims discharged in chapter 7 if the debtor converts the case to chapter 13.

The Automatic Stay Is a Get-Out-of-Jail Free Card in Chicago

The Seventh and Ninth Circuits may not be on the same page when it comes contempt citations falling under the Section 362(b)(4) exception to the automatic stay.

Force Majeure Clause Cut an Illinois Debtor’s Rent by 75%

Chicago judge cut rent by 75% after governor prohibited on-premises dining in the debtor’s restaurant.

Must a Debtor Be Destitute Before Discharging Student Loans?

Unemployed for 16 months, surviving on food stamps, and living rent-free enabled a debtor to discharge student loans.

PACA Doesn’t Give Rise to Denial of Discharge for Defalcation, Chicago Judge Says

A PACA trust lacks the hallmarks of a trust, so a failure to pay a produce supplier doesn’t give rise to a nondischargeable debt for defalcation while acting in a fiduciary capacity, Judge Goldgar says.

Medical Bills Are Held to Be Consumer Debts, Invoking the Means Test

Someone forced into bankruptcy on account of medical bills will also be forced into chapter 13.

Receivership Court May (Sometimes) Bar the Filing of an Involuntary Bankruptcy

Court weighs the relative advantages of receivership versus bankruptcy in deciding whether to bar the filing of an involuntary bankruptcy.

Failure to Raise a Stern Objection Violates a Lawyer’s Standard of Care

The lawyer whose waiver led to Wellness International avoided malpractice by the skin of his teeth.

A Judgment Lien on Entireties Property Isn’t Avoidable in Illinois, Seventh Circuit Says

A judicial lien impairing a homestead exemption is avoidable in some states under Section 522(f), but not in others.
Court: 

Did Segal Survive Butner in Defining Property of the Estate?

Judge Perkins in Illinois says the ‘sufficiently rooted’ test from Segal v. Rochelle did not survive Butner and the adoption of the Bankruptcy Code.

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