The purpose of Chapter 7 bankruptcy is to provide debtors with a new, fresh start. That means discharging most, if not all, of the unsecured debt, including credit cards, medical bills, personal loans, and others. In addition, Chapter 7 allows debtors to keep some of the property that is secured by debt, including cars, motorcycles, and homes, provided the debtor continues to make timely payments. However, there is something else that Chapter 7 bankruptcy provides, and that is a peace of mind.

The Illinois statutes cover the methods of terminating a mortgagor’s interest in real estate beginning in section 735 ILCS 5/15-1401. A deed in lieu of foreclosure is an agreement whereby the mortgagor and mortgagee agree to terminate the mortgagor’s interest. Acceptance of the deed in lieu relieves the party from personal liability. The only exception would be if a separate instrument is executed contemporaneously. Keep in mind that not all mortgage companies will agree to a deed in lieu. If accepted, it’s a great way to relieve mortgage indebtedness.

Thompson v. GMAC 08-2077
Seventh Circuit Court of Appeals
Decided May 27, 2009
Once a debtor files for bankruptcy and requests his repossessed auto be returned, the auto creditor must first return the vehicle.  Afterward, the creditor can seek adequate protection and bring a motion to modify the stay.
No longer is the burden on the debtor to prove adequate protection prior to the creditor unilaterally deciding what adequate protection is.  No longer will the debtor have to file an adversarial complaint to recover the vehicle.

Chrysler had a deadline of April 30, 2009, to form an alliance with Fiat SpA and qualify for further U.S. aid.  Fiat said they will form an alliance with Chrysler even if they file bankruptcy.  But, no one will say if Chrysler will file.  During this last week, Chrysler has almost accomplished a set of goals from the U.S.