Aurora, Illinois is an outer suburb of Chicago with its own unique history. As the second-most populous city in the state, there’s a good chance that if you live here you know someone who has gone through bankruptcy. If you’re struggling financially in the Aurora area, then it’s time to consider bankruptcy as a way out from under your own debilitating debt. The experienced attorneys of Chicago Bankruptcy Clinic can represent your rights and interests in bankruptcy and help you get started on a new path.
It’s Time to Talk About Bankruptcy in Aurora
If creditors have started harassing you over your debt, or it’s hard to come up with the money you need to pay your bills, you may be a good candidate for bankruptcy. Some of our clients come to us because they’ve started to see strains in their personal finances and want to tackle their debt problems early on. Others have already been sued by creditors and face looming litigation. Many are somewhere in between.
These are a few signs it’s time to start asking about bankruptcy:
- Bills, including monthly consumer debts, aren’t being paid
- Creditors are calling you or sending letters
- You have a pending foreclosure or repossession due to the inability to pay your bills
- A lawsuit has been filed or a court judgment has been entered against you
- Your wages are being garnished to pay off debt
- Your credit has been damaged because of debt
Bankruptcy offers a solution to these and related problems. But first, you have to decide whether a Chapter 7 or Chapter 13 bankruptcy is right for you. We can help.
What Are the Differences Between Chapter 7 and Chapter 13 Bankruptcy?
Your first step in declaring bankruptcy is to determine whether Chapter 7 or Chapter 13 is best. Both have their advantages and disadvantages, so we start by examining your debt and income situation to help you make the right choice. Here are some important details about Chapter 7 and Chapter 13:
Chapter 7 Bankruptcy
If you file for a Chapter 7 bankruptcy, a trustee assigned to your case will sell off certain assets and property to reduce your debt. Known as liquidation bankruptcy, Chapter 7 is a good way to eliminate most unsecured debt, such as:
- Credit card bills
- Medical bills
- Utility bills (electric, water, etc.)
- Unsecured judgments
- Collection agency debts
- Personal loans
Unsecured debt includes items, like the above, that are not backed up by collateral. But there are some debts you cannot discharge in Chapter 7, such as student loans, child support, taxes, and traffic tickets.
You do not have to liquidate all of your property. Certain items with little or no liquidation value, such as household furniture and clothing, are generally exempt. You may also be able to exempt your home and vehicle, depending on their values and the liquidation limits.
To qualify for a Chapter 7 bankruptcy, a debtor must make less than the median household income in his or her area. If you don’t qualify, or you don’t like the idea of liquidating so much of your property, the next option is a Chapter 13 bankruptcy.
Chapter 13 Bankruptcy
Debtors who don’t qualify for Chapter 7 should consider Chapter 13. This type of bankruptcy is an especially good option if you would prefer to keep your assets rather than eliminate them with a Chapter 7 bankruptcy.
If you file for Chapter 13, you have to propose a 3-5 year repayment plan to the court. An experienced lawyer can take a look at your debt balances and income to help you do this. The plan has to be reviewed by the bankruptcy trustee, your creditors, and the judge. During a confirmation hearing, the judge will decide whether to approve the plan. If approved, you can start making the payments.
One advantage of Chapter 13 versus a Chapter 7 bankruptcy is that, if you successfully complete the repayment plan, you can keep your property. But if you don’t, your creditors can begin collection efforts again. That’s one reason we take a close look at each individual client’s situation to help them decide which filing is best for them.
What Is The Bankruptcy Automatic Stay?
Once a debtor files for bankruptcy, whether a Chapter 7 or Chapter 13, the bankruptcy court enters an order known as an automatic stay. This prevents creditors from collecting from you, even if they have already started collection actions. A creditor that violates the automatic stay may incur severe legal penalties.
The automatic stay stops the following collection actions:
- Wage garnishments
- Creditor lawsuits
- Collection letters and calls
Automatic stays can be lifted in some cases, but in general, they remain in place until the bankruptcy is discharged or dismissed.
What Can Our Aurora Bankruptcy Lawyer Do For You?
Our law firm has experience with all aspects of bankruptcy law. We know the challenges and concerns that debtors have when they face bankruptcy, so we answer any questions they have. Choosing between Chapter 7 and Chapter 13 bankruptcy requires a careful review of each debtor’s individual circumstances. Not only do we help with the bankruptcy process, but we also take legal action if a creditor violates the automatic stay.
Contact Our Aurora Bankruptcy Attorney
If you’re ready to get started with your bankruptcy, or you still have questions about it, reach out to Chicago Bankruptcy Clinic. We’re available to schedule your confidential consultation today.