Bankruptcy in Springfield, IL

Are you contemplating bankruptcy or hiring a bankruptcy attorney in Springfield, 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 Springfield, 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 Springfield, IL, individuals must prove they cannot meet 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. 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.

Currently, Springfield residents filing bankruptcy appear before the U.S Bankruptcy Court of the Central 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. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe.

Typically, individuals approved for Chapter 7 lack stable income or had a change in circumstances that means they cannot 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, a stay goes into effect that requires all collection activity 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. It must be completed and filed by any Springfield 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 pass a means test that determines if you are able to file for Chapter 7 based on 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 with a reorganization plan, so they are easier to manage over 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.

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 Springfield. This type of restructuring is generally used by businesses that want to pay off their debts without liquidating. Those filing Chapter 11 will have to submit voluntary petitions. Additionally, they need a list of creditors, a statement of financial affairs, and a list of equity shareholders.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Springfield, IL after you file, the courts will assign a trustee to examine your liabilities, assets, and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to a 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 Bankruptcy Law, Chapter 13 is for debtors to pay back their debt over a new timeline. As opposed to wiping the debt away via liquidation. When you file for Chapter 13 you will have to formulate a payment schedule. In addition, you need to prove that this schedule will allow you to pay off your debts within the time limit set forth. This is generally a period of between 3 and 5 years. Chapter 13 is especially beneficial when trying to keep your home. It will allow you to make up missed payments, and even install the previous mortgage agreement.

The Bankruptcy Process in Springfield, 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.

In Springfield starting the process involves gathering your financial records. These documents can include 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 a denial of your petition.

Springfield residents that pursue bankruptcy should know that it does not eliminate all debt. Debts accruing from alimony or child support must still be paid. However, the Illinois State Bar affirms that there are several exemptions that allow you to keep the property as you go through the 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 have protections, as well as pensions. Illinois also offers a wildcard exemption for up to $4,000 in personal property, as well as a $1,500 exemption for tools of your trade, including books. However, as you file your exemptions it may be beneficial to have an attorney to help protect your possessions.

Work With an Experienced Springfield, Illinois Lawyer

Hiring a local bankruptcy lawyer in Springfield during this process can help reduce the 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 can discharge or not. 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, 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 Springfield 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!