Chicago Illinois Chapter 7 Bankruptcy Lawyer

Forrest Ingram

More and more American find themselves struggling with debt that they cannot control. The U.S. government has set up several options for individuals to get a handle on their financial situations. One of the most common forms of bankruptcy is Chapter 7 known as "Fresh Start" or "Straight" bankruptcy, Chapter 7 bankruptcy allows a person to eliminate most or all of his unsecured debt while being allowed to keep whatever property (secured debt) he or she may have. This commonly includes their current residence and their vehicles as long as they can continue to make payments and are current on the loans.

Chapter 7 eliminates unsecured debt such as:

Credit Card debts
Medical debts
Personal loan debts
Lawsuit debts
Judgements - Unless fraud or criminal related
Deficiency debts on repossessed autos and foreclosures
Some IRS Debts - many income tax debts are dischargeable.
Personal Injury Debts - except driving while intoxicated and criminal injury.

Chapter 7 does not eliminate student loan debts (unless you can justify an extreme hardship), alimony or support payments.

Chapter 7 is the most commonly filed bankruptcy because it allows the individual to get a “fresh start” relatively soon. A Chapter 7 Bankruptcy wipes out all a person's eligible debts usually within four months.

Will I lose anything if I file for bankruptcy?

Generally, you may file a bankruptcy and retain all of your personal belongings, including your house, your car and all household goods. You may be more at risk of losing property if you don't file bankruptcy, as creditors can sue you for the unsatisfied debts and attach your bank accounts, garnish your wages and attach and seize your property. As a result, you may miss rent, mortgage or car payments, making it difficult to provide even your most basic necessities.

Does my spouse have to file jointly with me?

If all or most of the debts are in your name only, your spouse may not have to file. Creditors usually cannot pursue a non-filing spouse, unless he or she is legally a co-debtor on the debt. Additionally, the bankruptcy should not be reflected on the non-filing spouse's credit report. The law does vary, however, from state to state so make sure you are aware of the laws in your area.

Who knows about my bankruptcy case?

The only parties that receive notice of the bankruptcy are your creditors, the bankruptcy court and the IRS. Generally, the bankruptcy will have no affect whatsoever on your taxes. Your employer will not be notified of the bankruptcy unless your employer is also a creditor. The bankruptcy is public record, so anyone who wants to find out could determine that you had filed. Generally, however, only you, your creditors and the IRS will know about the bankruptcy.

Will I be able to rent after I file bankruptcy?

Individuals that file bankruptcy are not and do not become homeless. If you are presently renting a home or apartment, usually your present landlord will renew your lease without running an updated credit report, and will have no knowledge that you even filed a bankruptcy. If you are applying for a new lease, there could be some slight difficulties that can easily be overcome. We have found that larger leasing companies usually have stricter policies regarding leasing to applicants with blemished credit. Remember that it is the blemished credit report, not necessarily the bankruptcy that is reflecting poorly on your application. Also, with no outstanding debt, you may appear to be a better risk than other applicants who have outstanding debt and blemished credit reports. Sometimes a good faith gesture, such as offering an extra month security deposit, may be enough for a potential lessor to overcome his or her concerns about your blemished credit.

How do I know if I should file bankruptcy?

Are you being sued?

If you are being sued, and you own a home, it is suggested that you speak to an attorney about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.

Is your home being foreclosed or is your car about to be repossessed?

If it is, very often bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan. If your house is being foreclosed or your car is about to be repossessed, Chapter 7 may not be an option. Chapter 13 may save your house and your car.

Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future?

If you are only paying the minimum payment on the credit card bills from month to month Chapter 7 bankruptcy can provide you with a fresh start that you are entitled to under the law and get you out of debt NOW.

Is filing bankruptcy immoral or does it make me a bad person?

Everyone is entitled to a fresh start. Many times, events occur in people's lives that cannot be expected. You may have had a sudden loss in income, a family medical catastrophe, a work injury, or any one of numerous other difficulties that would have been almost impossible for which to plan.

Can I get rid of student loans or tax debts?

Any bankruptcy attorney must have a sophisticated understanding of bankruptcy law to deal with student loan and tax debts. Until October 1998, student loans were discharged through Chapter 7 bankruptcy if the first payment on the loan became due more than seven years prior to the date of filing. In October 1998, President Clinton signed a new law into effect that disqualified all student loans from discharge.

Tax debts are generally subject to discharge only if you file bankruptcy more than three years after you file a timely, truthful tax return. If your return is filed late, the taxes are generally discharged only if you file bankruptcy more than two years after filing a truthful tax return. Of course, these are general rules and you should speak with a Legal Helpers representative who will perform a detailed analysis of these issues.

Can I get credit after filing bankruptcy?

Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin to reestablish your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio. You are probably visiting this site because you already have more outstanding debt than you have the ability to pay. So, arguably, you do not have credit.

Filing eliminates most, if not all of your debts, therefore reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed, you will not be able to file again for 6 years.

Many individuals have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a discharge. Many individuals even receive solicitations for unsecured credit cards almost immediately upon receiving their discharge.

Representing clients throughout Illinois: Chicago, Aurora, Addison, Chicago Heights, Joliet, Hinsdale, Plainfield, Rolling Meadows, Des Plaines, Schaumburg, Palatine, Elk Grove Village, Hoffman Estates, Arlington Heights, Mount Prospect, Hanover Park, Streamwood, Prospect Heights, Wheeling, Wheaton, Waukegan, Inverness, Barrington, Buffalo Grove, Elgin, Bartlett, Itasca, Bloomingdale, Wooddale, Cook County, DuPage County, Lake County, McHenry County, and Will County

(312) 759-2838 - 79 W. Monroe, Suite 900, Chicago, IL 60603