Bankruptcy in Chicago, IL

Are you contemplating bankruptcy or hiring a bankruptcy attorney in Chicago, Illinois? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.

Types of Bankruptcy in Chicago, Illinois

Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Chicago, IL to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.

Chicago residents filing bankruptcy must appear before the U.S Bankruptcy Court of the Northern District of Illinois.

Chapter 7 Bankruptcy

Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Chicago  who can help you to decide if a liquidation plan is right for you.

Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.

Credit Counseling is an integral part of the bankruptcy process, and must be completed and filed by any Chicago resident wishing to protect themselves under chapter 7 of the bankruptcy code. The U.S. Department of Justice posts an approved list of entities that allow you to complete your counseling. In addition to this, you will have to take a means test in Chicago that determines if you are able to file for chapter 7 due to the amount of income you receive.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.

The U.S. Courts provide an online guide for the bevy of forms you’ll need to file if you are filing for Chapter 11 in Chicago. Remember, this type of restructuring is generally for businesses that are attempting to pay off their debts without liquidating. Those filing Chapter 11 will have to submit voluntary petitions, a list of creditors, a statement of financial affairs, and a list of equity shareholders. An experienced attorney in Chicago can best help you with this process.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Chicago, IL after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.

According to Illinois Legal Aid, chapter 13 is designed to allow debtors to pay back their debt over a new timeline, rather than wiping the debt away through liquidation. When you file for chapter 13 you will have to formulate a payment schedule, and prove that this schedule will allow you to pay off your debts in the time limit set forth. This is generally a set period between 3 and 5 years.

The Bankruptcy Process in Chicago, Illinois

There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.

In Chicago to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.

Residents of Chicago that pursue bankruptcy protections should know that bankruptcy does not eliminate all debt. Debts accruing from alimony or child support must be paid. However, the Illinois State Bar affirms that there are several exemptions that will allow you to keep property and possessions as you go through this process. You’ll be able to protect up to $15,000 of equity in your home, and your motor vehicle up to $2,400. Public benefits such as social security and workers comp as well as pensions, can see protection. However, as you file your exemptions it may be beneficial to have an attorney to help protect your possessions.

At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.

Work With an Experienced Chicago, Illinois Lawyer

Hiring a local bankruptcy lawyer in Chicago during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Illinois attorney can also offer you guidance to improve the outcome of your case.

Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Chicago can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Illinois state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!