Residents of Oak Brook who have staggering debt sometimes wonder where they can turn. Creditors start calling, lawsuits get filed, and foreclosures and automobile repossessions could be right around the corner. Fortunately, you don’t have to face your debt alone. Having an experienced and compassionate bankruptcy attorney can relieve the burden and get you started on a path out of your debt. If you want to know if bankruptcy is an option for you, count on Chicago Bankruptcy Clinic.
Why File For Bankruptcy in Oak Brook?
Although the word “bankruptcy” has many negative connotations associated with it, filing can be beneficial to someone with significant debt. If you can’t keep up with payments, find yourself falling behind on bills, or just want to move on and clear your debt, you may be a good candidate for bankruptcy. Some of the other benefits include:
- Stopping foreclosures and repossessions
- Beginning the process of repairing and rebuilding your credit
- Stopping wage garnishments
- Handling creditor judgments that have been entered against you
- Ending creditor harassment, phone calls, and letters
Chapter 7 Versus Chapter 13 Bankruptcy
There are different chapters of bankruptcy, depending on the nature of the debtor and the debt. We will review your debt situation to advise you as to which type of filing is best for you.
Chapter 7 Bankruptcy
This is sometimes called a liquidation bankruptcy and is a good option for debtors with significant unsecured (not backed up by property, or collateral) debt. A Chapter 7 bankruptcy can clear all or most unsecured debt, including:
- Credit card bills
- Medical bills
- Utility bills (electric, water, etc.)
- Unsecured judgments
- Collection agency debts
- Personal loans
But some debts cannot be discharged in a Chapter 7 bankruptcy, including:
- Student loans
- Child support
- Most taxes
- Traffic tickets
In a Chapter 7 bankruptcy, property and assets must be sold off by a bankruptcy trustee to pay off as much debt as possible. But some property is exempt. That includes small items, like household furniture and clothing, that have little or no liquidation value. It may also include homes and vehicles if you do not exceed the exemption limit. However, you would need to continue making payments on the home or automobile to keep them.
There are income restrictions to Chapter 7 bankruptcy, so not everyone will qualify. For example, you must make less than the median household income in your area. If you earn too much, you may need to consider a Chapter 13 bankruptcy instead.
Chapter 13 Bankruptcy
If you don’t qualify for a Chapter 7 bankruptcy, or your goal is to reorganize and pay off your debt rather than liquidate it, a Chapter 13 filing may be more appropriate. Under Chapter 13, the debtor will have to agree to a 3-5 year payment plan to repay the debt. However, the debtor gets to keep the property at the end of the process, rather than have to liquidate it as with a Chapter 7.
The bankruptcy trustee must review the debtor’s proposed payment plan. Creditors will also get to review it, and then the plan heads to a confirmation hearing with the judge. If the judge approves the plan, the debtor can begin making payments under it.
Once the payment plan is completed, the bankruptcy is discharged. But the debtor has to consistently make payments on time under the plan. Failure to do so will allow creditors to resume collection efforts, including foreclosures.
What Is the Automatic Stay?
Whether you file for a Chapter 7 or Chapter 13 bankruptcy, an automatic stay is triggered which prevents creditors from taking further collection actions against you. Those actions include:
- Wage garnishments
- Creditor lawsuits
- Collection letters and calls
Creditors can, in certain circumstances, have automatic stays lifted. This would allow them to continue collection efforts or efforts to seize an asset (such as a house in foreclosure or a vehicle in repossession). The stay will also be lifted if the bankruptcy is dismissed. We can fight a creditor request to lift the stay or assist with issues that may result in a dismissal of the bankruptcy.
How an Oak Brook Bankruptcy Attorney Can Help
Knowing whether to file bankruptcy and which type to file, is where having a skilled attorney helps. Your lawyer will review the type and amount of debt you have, along with your income and other financial information, to determine whether a Chapter 7 or Chapter 13 is best for you. There may be certain assets you wish to keep rather than liquidate, or you may have questions about what a repayment plan might look like. Those are excellent questions to ask a knowledgeable bankruptcy lawyer. An attorney can also help protect your rights and seek damages in the event creditors violate the law, for instance by continuing collection efforts after the automatic stay is entered.
Contact Our Oak Brook Bankruptcy Attorney
If you’re ready to get started on your bankruptcy, or you still have questions or concerns, reach out to Chicago Bankruptcy Clinic. We can schedule your confidential consultation today.