Reasons Why Chapter 7 Might Make Sense For You
You earn below the median income in Illinois.
If your income is below the median income in Illinois, you may qualify for Chapter 7 under Illinois bankruptcy law.
You earn above the median, but don't have the means to pay unsecured debts.
Those who earn above the median in Illinois may still qualify if they can pass a means test. Put simply, a means test demonstrates they do not have the means to pay their unsecured debts. These are debts that aren't attached to property as collateral. They include credit card debt, medical bills, personal loans, and overdue utility bills.
Prior bankruptcy filings don't affect your eligibility.
If you have debts that were discharged under Chapter 7 bankruptcy in the last eight years, or under Chapter 13 in the last six years, you are not eligible to file for Chapter 7 bankruptcy. If you defrauded or attempted to defraud the bankruptcy court or your creditors at any time in the past, you are also ineligible to file Chapter 7 bankruptcy. A lawyer can be instrumental in guiding the way forward if any of these legal factors affect you.
You have few assets.
In Chapter 7 bankruptcy, property including $4,000 in car equity, $15,000 in home equity, essential personal property, and retirement plans are exempt from liquidation. If your debts are greater than the value of your assets, Chapter 7 can help you avoid liquidation of the assets you need most. Chapter 7 can also provide you with the benefit of discharged debts such as medical bills without the burden of a years-long repayment plan. An attorney can help you understand what could be liquidated and what is protected.
You are willing to undergo credit counseling.
You must undergo credit counseling by a state-approved agency before you can file for Chapter 7 bankruptcy in Illinois. Once the course is complete, you can petition the bankruptcy court. Our attorney can file the petition on your behalf and advocate for you before the court.
You are willing to attend a 341 meeting,
During a 341 meeting, the trustee (the person appointed by the bankruptcy court to liquidate your nonexempt assets to repay your creditors) will verify the accuracy of the information provided in your petition. This will involve asking you questions about your petition and other details. Creditors themselves typically only attend this meeting if they believe you are hiding assets or income.
Request Your Free Consultation With a Bankruptcy Attorney
Our law practice serving Oak Brook, Aurora, and Greater Chicago can help you decide whether filing for Chapter 7, Chapter 13, or Chapter 11 of the bankruptcy code is the best strategy for you. When creditors are constantly calling and there seems to be no hope, our bankruptcy attorney can help you use the law to your advantage.
Our practice understands that every bankruptcy case is unique, and we are prepared to give you the guidance you need to present your bankruptcy case to the court in a way that benefits you the most. Your search for a lawyer who can put bankruptcy law to work for you ends here. Send us a message or call to request your free consultation with an attorney:
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View on GoogleChapter 7 vs. Chapter 13
Chapter 13 bankruptcy is often called "reorganization bankruptcy." Chapter 13 is for people with a steady income who agree to pay off loans with a court-approved repayment plan over a three- to five-year period. Our attorney serving Oak Brook and Greater Chicago will help you determine if Chapter 13 bankruptcy may be a better option than Chapter 7 based on several factors, including:
Your Income
If you earn more than our state's median income and the means test determines that you have expendable income, the bankruptcy code may dictate that Chapter 13 bankruptcy is a legal option, but Chapter 7 is not. It pays to get a lawyer involved as early as possible to explore your legal options for escaping the scrutiny of creditors.
The Type of Debt You Carry
Certain debts, such as past-due child support payments, cannot be discharged. Our lawyer and his team serving Oak Brook, Aurora, and Greater Chicago have helped clients navigate all kinds of bankruptcy filings and can help you take the most advantageous route out of debt allowable under the law.
The Amount of Debt You Carry
Thanks to changes in the law that took place in 2022, individuals and businesses can file for Chapter 13 if their combined secured and unsecured debts are under $2,750,000 on the date of their bankruptcy filing. Our lawyer and his team serving Oak Brook and surrounding areas will help you explore your legal options and determine if this is a prudent way for you to repay your creditors. We look forward to helping you use the law to your advantage.What Is Chapter 11?
Chapter 11 is mostly used by businesses that are making money but cannot afford their loan payments. It differs from Chapter 13 because it can apply to any amount of debt, and it can require liquidating property to repay debts. Our attorney and his team serving Oak Brook and Greater Chicago can help determine if this option serves your best interests, or if you are a better candidate for Chapter 7 or Chapter 13 bankruptcy. Your search for a firm that understands the often complicated content of the laws pertaining to bankruptcy ends at Chicago Bankruptcy Clinic.
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