Residents of Elgin, Illinois aren’t too far from Chicago, and they have an ally in Chicago Bankruptcy Clinic if they run into hard times. We know that bankruptcy is probably the last thing you want to do, but we also understand how crushing debt can be. Our firm is here to explain how bankruptcy may offer you a way out of financial distress while letting you preserve assets. If you’re finding it difficult to pay your bills or you’re getting phone calls and letters from creditors, let us take a look at your debt situation and discuss your legal options.
Can Bankruptcy Really Help Me in Elgin, Illinois?
It’s natural to be hesitant about bankruptcy, but it’s a great idea to start asking questions if it’s becoming hard to make ends meet. You still have options for handling creditors, even if they’ve threatened or have actually filed a lawsuit. The most important thing you can do is learn whether bankruptcy is right for you.
Our clients come from all walks of life and economic situations. They realize that filing for bankruptcy doesn’t mean they’ve personally failed and it certainly doesn’t carry the stigma it once did. In fact, bankruptcy is a great way to handle debt so you can responsibly take care of it and move on with your life. These are common debt situations our clients face when they walk in our door:
- Harassing creditor phone calls and letters
- Pending foreclosures and repossessions
- Creditors threatening wage garnishment
- Lawsuits and court judgments
- Damaged credit
Understanding Chapter 7 and Chapter 13 Bankruptcy
When you retain us as your law firm, we get to work understanding the nature of your debt and how you want to handle it. Having a great deal of unsecured debt will affect which filing is right for you. Another factor is whether you want to keep more of your property or you are open to liquidating assets to clear the debt. Below are a few specific considerations for both types of bankruptcy.
Chapter 7 Bankruptcy
This is commonly referred to as a liquidation bankruptcy because a trustee will sell off assets to pay down as much of your debt as possible. If you have unsecured debt, such as the following, Chapter 7 is a good option for you:
- Credit card bills
- Medical bills
- Utility bills (electric, water, etc.)
- Unsecured judgments
- Collection agency debts
- Personal loans
There are some debts you aren’t able to discharge in Chapter 7. They include student loans, child support, taxes, and traffic tickets.
While liquidation of property is a major part of Chapter 7, it doesn’t mean you have to liquidate everything. Certain items with little or no liquidation value – including clothing, household items, and furniture – generally will not have to be liquidated. Your home and vehicle may also be exempt, depending on what their values are versus the applicable exemption limits.
Not everyone will qualify for a Chapter 7 bankruptcy. For one reason, an eligible debtor has to fall within the income restrictions required for a Chapter 7. That means the debtor must make less than the median household income in the area.
Chapter 13 Bankruptcy
If you don’t qualify for Chapter 7, Chapter 13 bankruptcy may be another option. This is also a good choice if your goal is to reorganize and pay off your debt rather than liquidate assets.
Under a Chapter 13 filing, a debtor proposes a repayment plan to pay off their debt. The repayment plan is for a 3-5 year period and has to be reviewed by the court. The bankruptcy trustee and creditors also get a chance to consider it. A confirmation hearing will be held where the judge decides whether to approve the plan. Once approved, the debtor can start making payments.
You must have sufficient disposable income relative to your debts in order for your reorganization plan to be approved. But as long as you make all payments, you can keep your property and discharge the bankruptcy once you are finished paying.
How the Automatic Stay Will Help
When you file for Chapter 7 or Chapter 13 bankruptcy, the court enters an order known as an automatic stay. The stay prevents creditors from trying to collect from you. That also means ongoing collection efforts must immediately cease. Such efforts include:
- Wage garnishments
- Creditor lawsuits
- Collection letters and calls
Automatic stays can be lifted in some cases, which would then allow your creditors to resume collection efforts against you. But an experienced attorney can fight to keep your stay in place so you can have a reprieve from your debt while the bankruptcy progresses.
How Can Our Elgin Bankruptcy Attorney Help?
We are experienced with bankruptcy law and understand the obligations that debtors will face with a Chapter 7 or Chapter 13 filing. Our goal is to review your debt situation, along with other factors like your income, to help you decide which option is best for you. If you file for bankruptcy and a creditor violates the automatic stay, we may also be able to help you recover damages against the creditor.
Contact Our Elgin Bankruptcy Attorney
Every debtor has different goals when they file for bankruptcy. Some are more concerned about keeping their property and want to reorganize their debt. For others, the goal is to eliminate the debt as expeditiously as possible through a liquidation. Whatever your objective is, we’re here to work for you. Give Chicago Bankruptcy Clinic a call today to schedule your confidential consultation.