Chapter 7 may save Illinois residents from losing their property

Sometimes, creditors obtain the right to seize property to sell in order to repay a debt owed to them. That property is then sold at auction, but may not cover all of the debt. In those circumstances, the creditor may continue to look to for payment of the remaining debt. Illinois residents may not know that filing for Chapter 7 bankruptcy protection may help stop this activity.

Rulon Gardner, a former Olympic gold medalist for wrestling, is in such a battle right now. He co-signed a loan for a former business partner who apparently turned out to be a swindler and is now serving time in a federal prison for fraud. The creditor is now looking to Gardner to repay the almost $3 million dollar debt. Gardner contends that he is as much a victim as the creditor since he too was a victim of his ex-business partner's fraudulent scheme.

As Gardner tries to tell his side of the story, the creditor obtained the right to seize much of his property to sell at auction in mid-August. The auction is set to take place in late October or early November. At the end of August, Gardner filed for bankruptcy protection and is attempting to stop the auction.

Until a Chapter 7 liquidation or Chapter 13 reorganization bankruptcy proceeding is finalized, either through discharge or dismissal, creditors must cease all collection activities unless otherwise granted permission by the court. The federal Bankruptcy Code and all applicable Illinois laws are there to protect filers from creditors until the court has had a chance to hear the filer's case and make a decision based on the petition filed. People who find themselves in a position where they are in danger of losing assets through no fault of their own may want to consider filing for bankruptcy protection.

Source: ABC News, "Olympic Medalist's Latest Setback Is Bankruptcy," Paul Foy, Sept. 18, 2012

No Comments

Leave a comment
Comment Information

Need Help With A Specific Issue?