Bankruptcy
Is Bankruptcy Right For Me?
It is difficult to determine whether a bankruptcy is the right path. Many consumers are confused by what they have heard from friends or family, or what they have read online. An attorney can help you to decide whether a bankruptcy would help.
The following are some factors that consumers and attorneys consider:
- Can you afford to pay your debts without a bankruptcy?
- Do you have valuable assets (exceeding the exemptions) that could be lost in a Chapter 7 bankruptcy?
- Would bankruptcy provide relief from creditor harassment?
- Would a repayment plan be feasible or affordable in a Chapter 13?
- Are there lawsuits, foreclosures or garnishments that a bankruptcy would stop?
We defend people Abused by Creditors and Debt Collectors
Most people have at least some wrong information about bankruptcy. Irrational fears hold people back from utilizing this helpful process. We hope that by dispelling some of these widely held myths, we can help you to determine whether bankruptcy is the right course for you. The initial consultation with a bankruptcy attorney is free. You owe it to yourself to call.
Chapter 13 Bankruptcy
In a Chapter 13 repayment plan, consumers repay part or all of their debt through a plan which is approved by the Court. The payments typically last between three and five years. The payment is calculated based on what consumers can afford out of their regular paycheck or other source of income (also called a "repayment plan") is generally used for consumers who have property that would not be exempt in a Chapter 7; or for people who are behind on mortgage or car payments; or families with higher incomes. With a repayment plan, the consumer makes payments to a Trustee, who distributes the money to the creditors according to a Chapter 13 plan. The payments can continue for upwards of five years.
A Chapter 13 plan is based on the consumer's monthly income, monthly expenses, debt, and property. Depending on these factors, consumers who qualify pay back either part or all of their debts. As long as Chapter 13 consumers keep up with the plan, they are able to keep their property and get rid of their debt.
Chapter 7 Bankruptcy
Most consumers who seek protection under the bankruptcy laws file under Chapter 7. Chapter 7 bankruptcy is typically a short process, lasting only about 4 months from the day the case is filed until the discharge (also called a "straight bankruptcy" or a "liquidation") is the simplest way to a fresh start, and it is the most common. Technically, the debtor's assets are to be taken and sold so that the proceeds can be distributed to the debtor's creditors.
In practice, however, most debtors do not lose any of their property. This is because of many important exemptions which protect consumers. The most important exemptions for most Illinois consumers are the following:
- homestead (most people can keep their houses)
- motor vehicle
- retirement and pension funds
- clothing and health aids
- personal injury awards
- $4,000 of any other property
While there are limitations to these exemptions, most consumers are able to keep all of their belongings while reducing or eliminating their debt. You should be aware, however, that certain debts such as income tax bills less than three years old (from the due date), child support, alimony, fines, and student loans cannot be eliminated by filing bankruptcy.
Don't stick your head in the sand. This is the time to address your financial difficulties so that you can move on. We can help you decide whether bankruptcy can help you. There is no fee for a consultation, and I am glad to answer all of your questions.
Call Now: 630-834-1800
If you are being harassed by a creditor, you can stop them by filing for protections under the bankruptcy laws. Once you file for bankruptcy protection your creditors must stop calling. Relief can come right away. We can take the telephone calls for you.
Call Now: 630-834-1800
The bankruptcy laws are in place to help you, you can get rid of debt once and for all. We can assist you to use the laws to your benefit to get the fresh start that bankruptcy can provide. We are glad to discuss your situation with you.
Call Now: 630-834-1800
Case Studies
Chapter 7
Steve is a client who came to us with credit card debts. He also had a judgment against him, where his wages were being garnished. He had a house, but it did not have a lot of equity. We were able to do a Chapter 7 bankruptcy, and he was freed of the debt without losing any property. Now he can start rebuilding his finances.
Chapter 13
Michael & Maria had been doing fine, until Michael was off work for 8 months. They fell behind on their mortgage, and by the time Michael got back to work, they were in foreclosure. We filed a Chapter 13 bankruptcy, which stopped the foreclosure, and Michael and Maria have 5 years to catch up.
Business
Kathleen owned a small clothing shop. When the economy slumped, her store suffered, and eventually it had to close. Not only did she have debts from the business (including an SBA loan), but she also used credit cards and a payday loan to keep the store going. We worked with her to file a Chapter 7 bankruptcy, and now she can move on.