Bankruptcy is a difficult decision to make and is often the end of a long path of stress and turmoil. Luckily, despite the stigma attached to declaring bankruptcy, most individuals will emerge from the process with a “clean slate” and the financial flexibility to move on with their life. A reliable Chicago bankruptcy attorney will help you navigate the bankruptcy process, get an automatic stay against creditors and ensure that debts against you are resolved so you may achieve financial independence.
How do I discharge my debt?
Secured debts include home mortgages and car payments. These debts are not discharged without giving up the item through foreclosure or repossession. You may choose to let this happen in a bankruptcy situation, but it is not necessary. A Chicago bankruptcy attorney can help you determine what to do with secured debt and which of the other debts are unsecured.
A Chapter 7 bankruptcy filing is the only way for one to discharge their debt. Most forms of unsecured debt, such as medical bills and credit card debt can be discharged, but child support, student loans, property and income taxes less than 3 years old, as well as financial penalties associated with law-breaking remain with the debtor.
During bankruptcy, the court will appoint a trustee to help you liquidate your assets to pay debts. You will not have any say in the matter except for the state and federal exemptions on property you are allowed to keep. Bankruptcy will impact the credit rating of the debtor for ten years.
What is an estate?
A person’s estate is the sum of all property owned by an individual. An individual’s estate is only imperiled in bankruptcy when the total assets exceed the amount owed, in which case the trustee will sell nonexempt assets to settle debts. Assets not included in the estate include property that is leased, rented or otherwise owned by another party that the individual makes payments to fro the right to use. The debtor may choose to allow this property to be repossessed by the owner at his or her choosing if the monthly payments constitute a financial burden.
What is Chapter 13 bankruptcy?
The only other typical bankruptcy option is a court supervised repayment plan that does not discharge you debt. This is a Chapter 13 filing. This filing is an automatic stay against creditors and prevents them from taking further action against the debtor. Like all other bankruptcy filings, the debtor will need to go to credit counseling, to determine if an automatic stay against collectors is necessary. The Chicago bankruptcy attorney will work on behalf of the client to formulate a debt repayment plan, typically lasting 3 – 5 years that has the debtor repay all debts while the automatic stay is in place.
What to prepare before meeting with the Chicago bankruptcy attorney?
Be prepared to account for all of your debts, in addition to any assets you have, regardless of if they are secured or unsecured. You will need tax returns for the previous two years, and any other relevant personal finance documents. The Chicago bankruptcy attorney needs all of this information to determine the severity of your situation and the appropriate bankruptcy chapter to file under. There are additional bankruptcy chapters for businesses and fishermen that might be applicable, but only the attorney can determine this.
The Chicago bankruptcy attorney will also need to determine which of your property is exempt from seizure. Individuals may choose either the state exemptions or the federal exemptions and the Chicago bankruptcy attorney will help you make this difficult decision which will preserve the important assets.
Credit counseling is mandatory for all persons seeking bankruptcy protection and this will happen after you choose to file for bankruptcy. This will determine if you need protection to pay off your debts.
What is bankruptcy fraud?
Bankruptcy fraud is concealing assets from the bankruptcy court. One might engage in this behavior to protect certain property from being liquidating or hiding valuable items to reduce the value of the estate. Bankruptcy fraud is a serious criminal offense and will carry severe federal penalties. Your Chicago bankruptcy attorney may not be able to defend you against these allegations and evidence of fraud will at least end your case and leave you to the mercy of the creditors.
What property is exempt from liquidation?
Illinois state law exempts some of the following property from bankruptcy rulings:
• Homestead exemption: you may exempt the value of the property you live in, up to $15,000
• Personal property: tuition trust funds, burial and cemetery plots, unpaid wages, motor vehicles up to $2,400, proceeds from the sale of any personal property
• Most municipal and public employee pensions, IRA and Roth IRAs
• Tools of trade, including tools and implements, up to $1,500
• Most forms of insurance
• Any property used in a business partnership
There is a wildcard exemption for $4,000 worth of property not including wages
A Chicago bankruptcy attorney can assist you in determining which property is exempt under Chicago law as well as potential loopholes that can spare some of your assets from seizure to pay credits. Illinois state exemptions may be used in conjunction with federal exemptions.
What are the advantages to bankruptcy?
Bankruptcy provides an automatic stay against creditors, which prevents them from taking action against the debtor, such as collection harassment, repossessing property and filing lawsuits. Bankruptcy allows the individual to overcome burdensome debt and improve their financial practices to avoid future trouble with finances. Repeated bankruptcies will not be advantageous.
Where do I file for bankruptcy?
You will file for bankruptcy in the United States Bankruptcy Court, Northern District of Illinois.
Where to look for an attorney
You may use this website to find an attorney. To do so, use the search box on top of all pages. You may also compare attorneys and ask free questions by clicking Find Attorneys on top of the page.
You may contact the Illinois Bar Association lawyer search by phone at (888) 223-1802. The initial consultation with the lawyer you connect to using the Illinois Bar Association lawyer search will be no more than $25. Alternatively, for those wishing to do comprehensive research, you may do a search of the Illinois Bar Association lawyer search online directory. Here you may browse attorneys by field of practice or county. Lastly, if you are looking to verify a lawyer or find a lawyer by name, the Attorney Registration & Disciplinary Commission will have a listing of all Chicago bankruptcy attorneys.
The ARDC of Illinois is the primary disciplinary body for Illinois attorneys and other organizations will often make the rulings of the ARDC known, as well as take remedial steps against the offender, in accordance to the rules of the organization.
Rates, Fees & Retainers
The fees to file for bankruptcy in Illinois were increased on November 1, 2011 and are currently at $281 for Chapter 13 and $306 for Chapter 7. This is in addition to lawyer fees. There are also miscellaneous fees for record retrieval, audio recording and other court services. Fees can be waived or paid in installments at the discretion of the court.
Hourly rates may be accrued from using the lawyer or support staff such as paralegals. This is a simple arrangement and you should have a general idea of the amount that will be billed. This may not include flat legal service fees such as document preparation and filing. It is especially important to be aware of those fees.
A retainer fee is a non-refundable advance payment by the client that covers the cost of services provided by the lawyer. This payment is put into an account and billed whenever the lawyer performs services. This account may need to be refilled as the case continues. Although bankruptcy cases are not typically lengthy, retainer agreements can still be expensive, depending on the frequency by which the lawyer’s services are used.
You may choose to file for bankruptcy “pro se,” or without the assistance of a Chicago bankruptcy attorney. This is not advisable as you will risk losing non-exempt property or may make critical errors that will affect the outcome of your case. Free services may be available to low-income families as well as no-cost consultations. Payment plans can be arranged between clients and lawyers in case there is significant financial hardship for the client.
Interviewing your attorney
The following questions are important when interviewing your attorney:
What fees do I pay for retaining services?
Can I have that in writing?
What are my options?
Can I file for Chapter 13 bankruptcy and preserve my assets?
Can I contact you directly if there is a problem?
Can you allow me to examine your credentials?
What is your experience with bankruptcies, specifically my circumstances?
If you cannot handle my case, can you refer me to a lawyer that can?