How To File Chapter 7 Bankruptcy
The most important factor in filing Chapter 7 bankruptcy is finding an experienced bankruptcy attorney. Once you decide on an attorney, you can refer creditors to your lawyers office. Filing the petition will trigger an automatic stay, which means creditors cant pursue lawsuits, garnish your wages or contact you about your debts. Heres a potential timetable:
If youre qualified, it will take 4-6 months to complete the bankruptcy process.
Here are the steps you must take when filing for bankruptcy:
Special Exemption Handling For Illinois
Below is specific special handling of bankruptcy exemptions in Illinois.
- Personal: Necessary wearing apparel bible and school books family pictures professionally prescribed health aids a certificate of title to any watercraft over 12 feet in length prepaid tuition trust fund Illinois College Savings Pool accounts invested more than one year before filing if below federal gift tax limit, or two years before filing if above.
What You Need To Know
Filing for Chapter 7 in Illinois is a fast, legal way to eliminate your debts and get a fresh financial start. DebtStoppers is the largest Chapter 7 filer in the state, so our Illinois bankruptcy attorneys have the experience to know the best way to apply the laws to meet your individual needs.
Well listen to you without judgment, answer your questions, and then help you decide the best debt relief choice for you.
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Need Help Filing For Bankruptcy In Illinois
If you are having trouble paying your bills, hiring an attorney to represent you in bankruptcy may seem like an expensive luxury when you could file on your own. However, even simple bankruptcy cases can involve complex court filings and strict deadlines. An experienced local bankruptcy attorney will help guide you through the filing process, represent you in court, and negotiate with creditors to ensure that you exit bankruptcy with as many assets as the law allows.
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts , ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law you are researching.
Lien And Bond Claim Deadline Summary
Here is a summary of the deadlines that subcontractors need to adhere to in order perfect and enforce their lien and bond rights against public projects. These are the most important to remember.
Subcontractor Lien Claim
Serve Notice of Claim Against Public Funds once payment issues are suspected
File a lawsuit to enforce lien within 90 days of serving the Notice of Claim of the last date of furnishing.
- Serve a copy of the lawsuit to the Clerk or Secretary of the public entity
Subcontractors Bond Claim
Serve Notice of Claim within 180 days of the last date of furnishing.
File suit to enforce the bond claim within 1 year of the last date of furnishing.
Both the Notice of Claim Against Public Funds and Notice of Claim Against Payment Bond can be combined into one document. One lawsuit can be filed to enforce both claims and it is much more efficient and cost effective to do so.
The deadlines must be followed exactly and the lien claim and bond claim notices must contain all of the necessary information described above in order to perfect and enforce your rights. However, it is always best to consult an attorney if you suspect you are having payment issues and need to protect your lien and bond rights.
President and Founder of Grzymala Law Offices, P.C.
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Go To Court To File Your Forms
When you head to the court for the purpose of filing bankruptcy in Illinois, it’s important to bring a government issued picture ID with you. The building you are going to is a federal courthouse, and you have to pass through security on the way in. Especially if you donât live or work near the courthouse, make sure to check the courtâs website before heading out. Due to the ongoing coronavirus pandemic many courts – while still operating – have limited their in-person services.
When all is done, youâll get a case number assigned to your Chapter 7 case. If any of your , you can simply give them your case number and tell them theautomatic stay protects you. The automatic stay goes into effect the moment your case is filed, and your creditors have to follow it even if the bankruptcy court hasn’t yet mailed a notice to anyone.
Errors Could Lead To Dismissal Of Illinois Bankruptcy Claim
Since the 2005 changes to federal bankruptcy laws, filing for bankruptcy has become a more tedious, time-consuming task. Among the changes made were income specifications that affect which type of bankruptcy claim an individual can file.
Chapter 7 Bankruptcy
Under a Chapter 7 bankruptcy, a debtor’s non-exempt assets are liquidated and sold to pay creditors. Debtors may be allowed to keep property with exempt status, which is determined by the state where the claim is filed. In many states, a percentage of your home’s value can be exempted.
To determine if you are eligible to file Chapter 7 bankruptcy, you first need to find out how your monthly income compares with the state’s median income for a family of similar size. If your income is higher than this median amount, a means test will be applied. Basically, a means test is a calculation of your debt and expenses. This calculation can be determined according to your specific location by state and region. If the results of the means test show that you should be able to make payments on your debts, you will be unable to file for Chapter 7 bankruptcy.
Chapter 13 Bankruptcy
Under a Chapter 13 Bankruptcy, a debtor makes a plan for repayment of their debts. Generally, this claim allows debtors to retain their homes and offers protection for third-party co-signers.
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What Are The Benefits Of Filing Chapter 13 In Illinois
The benefits of the Chapter 13 filing process in Illinois include:
- Prevent foreclosure to keep your home by catching up with past-due mortgage payments over three to five years
- Stop wage garnishments, seizures, levies, and debt collection lawsuits
- Stop creditor harassment
- Prevent repossession and keep your vehicle
- You may be able to discharge a second mortgage through Chapter 13
- You may be able to pay less than you owe to satisfy the secured lien on your vehicle
- Catch up past-due child support and alimony
- Get rid of unsecured debts for pennies on the dollar
- Resolve tax debts and IRS problems
- Protect property from being sold to pay debts
Another benefit of the Chapter 13 process in Illinois is getting rid of the stress and anxiety of dealing with debt problems. Financial problems can cause an enormous amount of stress, which can cause severe health problems. The Chapter 13 bankruptcy process in Illinois allows you to take control of your debts and finances to relieve stress and anxiety.
Illinois Bankruptcy Exemptions 2022
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In a Nutshell
It’s important to understand what the exemptions for Illinois are and how they’re most often used in a bankruptcy case.
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What Happens When I File For Chapter 7 Bankruptcy
Once you have filed, a case trustee will meet with you and your lawyer to obtain information about your financial situation and property. The trustee will decide which assets you can keep and which you have to sell to pay your unsecured creditors. Although the law allows the trustee to sell non-exempt assets to pay off your unsecured debt, it is our experience that DebtStoppers clients rarely lose any possessions at all.
The rules can be complicated and confusing. Contact DebtStoppers today to schedule a free, no-obligation consultation, and one of our experienced Illinois bankruptcy lawyers can help you determine if you qualify for Chapter 7 and whether it’s the best option for you.
DebtStoppers is the only Illinois firm offering you real $0 up-front Chapter 7. We even advance your $335 filing fee, so you dont have to wait one day to get the help you need. Call or text us now at 312-913-0630.
Filing For Bankruptcy In Cook County
Bankruptcy cases are handled by federal courts. Individual bankruptcy cases are filed with U.S. district courts. Cook County bankruptcies are handled by the Northern District of Illinois U.S. District Court at 219 Dearborn Street in Chicago.
Many, but not all, of the rules that bankruptcy filers must follow are the same regardless of the state in which the filer lives. This is because the U.S. Bankruptcy Code is a federal law that specifies the circumstances that govern where an individuals case can be held. There are different requirements based on the state where she lives, the most notable of which is the means test. Read More:Rules for Filing a Second Bankruptcy
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Collect Your Illinois Bankruptcy Documents
Youâll need your income tax returns for the last two years and the paycheck stubs you received in the last 60 days . Your bank statements, copies of your vehicle titles, and a recent copy of your credit report will be good to have as well. Finally, to make sure you cover every angle, collect all the bills you have received in the last 90 days.
What Happens To Your Debt In Chapter 13
Chapter 13 bankruptcy lets you create a plan to repay your creditors over three to five years. The court must approve the plan and may force your creditors to reduce or restructure your debt. Mortgage payments are not included in the plan, but a trustee may negotiate a payment agreement with the lender if you are behind on your payments. Unsecured creditors are paid with the disposable income left after you have repaid your secured creditors. Any unsecured debt that is not paid will be discharged at the conclusion of the plan.
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How Much Does It Cost
In Chicago and the rest of Illinois, you will have to pay a filing fee of $335 when you file your case. At DebtStoppers, well advance you the filing fee cost, so you can get the debt relief you need today with no up-front cost.
Because every case is different, our legal fees can vary, but are among the most reasonable anywhere. Affordable payment plans are always available.
How Often Can You File Chapter 13 In Illinois
Some people go through several financial difficulties during their lifetime. A person could need help from the bankruptcy system more than once. For that reason, bankruptcy cases are not limited to one case per person. You can file bankruptcy again if you need debt relief.
There are no restrictions on the number of bankruptcy cases a person may file. However, there are mandatory waiting times for obtaining a bankruptcy discharge. The bankruptcy discharge is the legal order that forgives your debt. Therefore, filing a bankruptcy case without receiving a bankruptcy discharge is generally a waste of time and money.
If you need to file another bankruptcy case, it is crucial to know the waiting periods for receiving a bankruptcy discharge. The time limits are based on the filing dates of the bankruptcy cases:
Four YearsTwo Years
It is usually best to talk to a bankruptcy lawyer before filing Chapter 13 again. You want to ensure that there are no specific situations that apply in your case that could interfere with obtaining another Chapter 13 bankruptcy discharge. Also, there could be another debt relief option that would work in your situation that could help you avoid another Chapter 13 bankruptcy in Illinois.
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Secured Vs Unsecured Debt
During bankruptcy, your debts will usually be placed into one of two categories: secured and unsecured. The designation is important because secured and unsecured debts are treated differently in bankruptcy and will dictate how much of your debt can be eliminated.
Debt is unsecured when a creditor has no right to repossess your property when you fail to pay. Credit card debt, court judgments, and medical bills are among the most common types of unsecured debt. Because unsecured creditors hold no collateral for their debt, they are the most likely to be eliminated during bankruptcy. But some priority unsecured debts, like unpaid child and spousal support, can’t be eliminated.
A secured creditor has the right to repossess your property if you do not pay what you owe. These are generally loans where you have signed a contract giving the lender the right to seek a lien on the collateral property if you do not pay. Since secured creditors will retain their right to repossess the property in bankruptcy, you will usually need to give up the property or work out a repayment plan with the creditor. Home mortgages and car loans are the most common types of secured debt.
What Is Bankruptcy Protection In Illinois
Bankruptcy protection refers to the immediate suspension of debt collection activities once the debtor files a bankruptcy petition. Following Section 362 of the Bankruptcy Code, an automatic stay on collection activities and certain debt-related proceedings and judgments, such as collector calls, foreclosure, repossession, evictions, lawsuits, and garnishments. This gives debtors time and space to reorganize debts and plan future actions.
- Court fines and sanction
- Payment of actual damages, including attorneys fees and related cost
- Payment of punitive damages
However, there are limitations to the Automatic Stay Provision. For instance, the stay does not cover or stop:
- The start or continuation of a criminal proceeding against the debtor
- The start or continuation of a civil action against the debtor, especially concerning divorce, domestic violence, child custody, and establishment of paternity
- The collection or payment of domestic support obligations
- The restriction or suspension of a professional license, drivers license, or recreational license
- The restriction of a tax refund, under state law
- The implementation of a medical obligation
- Government tax audits to determine liability
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Southern District Of Illinois Requirements
If you are among the 1.2 million people living in the 38 counties in Southern Illinois, your Chapter 7 bankruptcy case in Illinois will be assigned to this district. There are three divisions within this district, and court is held in East St. Louis and Benton. Several creditors have provided a preferred address to the court in this district. When you create the creditors’ mailing matrix, check this listing and update the addresses for your creditors accordingly.
Chapter 11 Bankruptcy In Illinois: Reorganizing The Small Business Corporation
The definition of a Small Business in a Chapter 11 is one where the debts dont exceed about $2.5 million . The debt limit excludes amounts owed to persons considered insiders such as stockholders and/or family members. A Business owned in an Individuals name that exceeds the debt limits of a Chapter 13 may be eligible for a Small Business Chapter 11 if their total debt does not exceed the above debt limits.
Upon filing the Chapter 11 Bankruptcy in Illinois, the Debtor becomes a Debtor-In-Possession . New bank accounts will generally be required and designated as a Debtor-In-Possession. Also, insurance policies must list the United States Trustee for notice purposes.
A Small Business Chapter 11 Bankruptcy may be the best course of action for your Chicago business, with the following benefits:
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What Happens When I File A Chapter 7 Case
A bankruptcy proceeding is initiated by filing a petition with the bankruptcy court. When you file for Chapter 7 liquidation, the petition operates as an automatic stay, which generally prevents creditors from pursuing debt collection actions against you unless the bankruptcy judge approves it first. The automatic stay goes into effect immediately upon filing the petition no court hearing or approval by a judge is necessary. When the case is filed, the United States trustee for your judicial district appoints a trustee to review your financial affairs and administer your case. The appointed trustee has the power to liquidate any asset you own that is not by law exempt from collection or subject to a lien in order to pay your creditors.