Other Blog Posts in Chapter 7 bankruptcy category

Disabilities and Chapter 7

There is a variety of reasons why people file for Chapter 7 bankruptcy to seek debt relief, including medical emergencies, unexpected job loss, and divorce, but another unfortunately-common reason people file for Chapter 7 is disability.Many disability injuries which lead struggling clients to file for bankruptcy resulted from serious and unexpected accidents, such as auto accidents, leaving th......

Student Loan Debt and Chapter 7

Student loan debt, which now affects every generation, continues to increase beyond $1.3 trillion in the United States, and new data from the Department of Education shows that defaulting is also an ongoing problem: at over 1,000 colleges and trade schools across the U.S., 50% or more of students have defaulted on their loans or not made a payment in the last seven years.Some borrowers eventual......

Protecting Personal Injury Compensation in Chapter 7

If you’re considering filing for Chapter 7 bankruptcy in Illinois, it’s important to remember that proceeds from a lawsuit may not necessarily be exempt. These proceeds include: money you’ve received from a lawsuit prior to filing for bankruptcy; money you have not yet received from said lawsuit; and money you may be entitled to receive for said lawsuit.Any claims you have in a lawsuit or settl......

Debt Collectors Pursuing Old and Expired Debts

In May, the U.S. Supreme Court ruled that, using a debtor’s bankruptcy proceedings, debt collectors can collect debts even if they have expired under the state’s statute of limitations. These companies will no longer be held liable under the Fair Debt Collection Practices Act (FDCPA) for filing claims for otherwise-expired debt which isn’t required to be repaid under Illinois law.Of course, cou......

Baby Boomers Struggling with Debt

Studies are showing that the “Baby Boomer” generation is struggling with more debt than previous generations – especially in old age – and it’s been estimated that in the past decade, those between ages 65 and 74 have accrued five times more debt and saved 32% less than previous generations.As we recover from the financial crisis in which millions of Americans faced pay cuts, declining real est......

Auto Repossession and Chapter 7

If you’re struggling with debt, it’s important to remember that you’re not alone: millions of Americans, for example, are struggling with subprime auto loans with high interest rates, and failing to keep up with these costs can result in reduced credit scores, lawsuits, and even auto repossession.Unfortunately, debt-collection for subprime loans is a profitable business in the United States, an......

Driver's License Reinstatement and Chapter 7

If you’re struggling financially and have too many unpaid debts, it is possible to have your driver’s license suspended until those debts are paid off even if they are not traffic-related; such debts include personal injury claims, alimony, and unpaid child support.Depending on the types of debt you have (not all debts are dischargeable in bankruptcy), filing for Chapter 7 bankruptcy with the h......

Revocable Trusts in Chapter 7

During the Chapter 7 bankruptcy process, you will need to relinquish some assets to the bankruptcy trustee so they can be sold or liquidated and your creditors can be repaid, and you may be wondering how Chapter 7 will affect you if you are the beneficiary (or “successor trustee”) of a revocable trust.In a revocable trust, you, as the trust beneficiary, do not immediately control the assets in ......

Ineligibility Reasons for Chapter 7

There are several criteria for filing for Chapter 7 bankruptcy, and if you’re struggling financially and considering filing a petition, it’s helpful to understand how these criteria apply to you and whether you are eligible before beginning the process.- Income – First, you must measure your currently monthly income compared to the median monthly income for your family size in ......

Non-Dischargeable Debts in Chapter 7

If you’re struggling financially, Chapter 7 bankruptcy can help you eliminate certain types of debt after liquidating non-exempt assets. However, there are certain debts which cannot be discharged in Chapter 7, and these include:- Alimony;- Child support;- Criminal fines;- Parking tickets;- Debts due to embezzlement, fraud, or ......

The Importance of an Attorney in Chapter 7

While some clients in Chapter 7 bankruptcy cases assume that an attorney’s assistance is not necessary, the truth is that filing without this assistance is a primary risk factor for an unsuccessful case and insufficient discharge of debt. The help of an experienced bankruptcy attorney can be the difference between a dismissed case and saving hundreds or even thousands of dollars, and failure to......

Protection During the Automatic Stay in Chapter 7

When you file for Chapter 7 bankruptcy, the U.S. Bankruptcy Code provides an “automatic stay,” a period of time in which any and all lawsuits, wage garnishments, harassing phone calls, and debt collection efforts against you are prohibited.While the automatic stay is effective immediately, your creditors must also be notified in order to temporarily cease these actions, and how soon creditors a......

Basic Timeframes for Chapter 7

With the help of an experienced bankruptcy attorney, you can potentially file and be successfully discharged from Chapter 7 bankruptcy within one year.If you intend to file for Chapter 7, it’s recommended to itemize your current source/s of income, major financial transactions in the past two years, debts, property, and monthly living expenses, and you should also gather all tax returns in the ......

A Second Bankruptcy Filing in Illinois

Technically speaking, there’s no limit to the frequency of filing for Chapter 7 bankruptcy, as the act of filing does not by itself result in the discharge of your debts. If you have previously filed for Chapter 7 and had debt successfully discharged, you must legally wait at least eight (8) years to receive an additional discharge in Chapter 7.Illinois also mandates a waiting period between di......

Spouses Filing Individually or Jointly in Chapter 7

If you are married but intend to file for Chapter 7 bankruptcy by yourself, you can legally do so, but there are some important factors to keep in mind. For example, if you and your spouse share any debt (joint debt), you both will still be responsible for that debt. The more joint debt you have, the better off you may be by filing a joint petition.Generally speaking, filing a joint bankruptcy ......

Bankruptcy Estate in Chapter 7

If you’re considering filing for Chapter 7 bankruptcy, you may have heard the term “bankruptcy estate.” This describes your property which is subject to sale (“non-exempt assets”) by the case’s trustee to pay off your creditors, and even income that has been earned but not yet received before filing can automatically become part of the bankruptcy estate, while income earned after filing will st......

Removing Chapter 7 from Credit Reports

In 1970, the Fair Credit Reporting Act (FCRA) was passed by Congress and it remains an important pillar of American consumers’ credit rights to this day. If you’re considering filing for Chapter 7 bankruptcy, you will usually receive your discharge in six months or less, but you may be wondering when the bankruptcy will be behind you in terms of your credit report. In accordance with the FCRA, ......

Income Limits for the Chapter 7 Means Test

Illinois has median incomes based on household size for those who file for Chapter 7 bankruptcy in Illinois. If your income is below the state’s median for your household size, you will be exempt from the “means test,” but for all others, this test is necessary to determine your eligibility.A client’s average household income i......

Obtaining Unsent or Lost Discharge Papers After Chapter 7

After you have received your discharge from Chapter 7 bankruptcy, you should receive paperwork known as “discharge papers” which officially release you from liability for your eliminated debts and prohibit the listed creditors from taking further actions against you. These papers are especially important if a listed creditor do......

Keeping a Tax Return in Chapter 7

If you are considering filing for Chapter 7 bankruptcy in Illinois, you may be wondering whether your tax return will be subject to garnishment. While this usually depends on the timing of your filing (relevant to your financial situation) and the receipt of the refund, there are also certain steps which can be taken to keep a ......

More Paperwork Preparations for Chapter 7

Some people may struggle financially for months or years before considering filing for bankruptcy, while others must make the decision due to unexpected events and circumstances, such as medical emergency, chronic illness, divorce, job loss, or exhausted savings. Regardless of your financial situation, the assistance of an experienced bankruptcy attorney is essential to ensure that you can have......

Valuable State Protections for Struggling Clients

Mortgage problems are among the most common reasons why struggling homeowners file for Chapter 7 bankruptcy to get a fresh financial start. Here are some steps taken in the state of Illinois in the past ten years to help citizens get a better handle on their home finances:- Governor’s Homeowner Assistance Initiative...

Housing Counseling and Chapter 7

Foreclosure and mortgage-related problems affect millions of Americans each year, causing a rise in non-profit programs around the country, such as Housing Counseling Services and NeighborWorks America, which are generally funded by Congress via the Department of Housing and Urban Development (HUD). However, a lack of requested funding for these programs in the past five years has shown that th......

Tax Discharges in Chapter 7

A common question about filing for Chapter 7 bankruptcy concerns whether certain taxes can be discharged in the process. This is indeed possible in certain situations, but because bankruptcy cases can vary so greatly, it is highly recommended to work with an experienced bankruptcy attorney to fully understand which of your debt......

The Automatic Stay in Chapter 7

The “Automatic Stay” is a period of time after filing for bankruptcy in which creditors are temporarily barred from attempting to collect debt from you. It has also been defined as “a self- executing, universal injunction that goes into effect the moment a case is filed and keeps most creditors from exercising control over the assets of the Bankruptcy Estate.” It also helps to ensure that no si......

Inheritances and Chapter 7

If you are considering filing for Chapter 7 bankruptcy, you may be wondering about an inheritance you will soon receive and whether you will be able to protect it. Here is some helpful information about inheritances and Chapter 7, and remember as always that it’s important to work with an experienced bankruptcy attorney to ensure that you can protect valuable property and successfully eliminate......

Paperwork Preparations for Chapter 7

Millions of Americans are struggling with significant debt, and some can benefit from filing for Chapter 7 bankruptcy to eliminate certain debts and earn a fresh start. If you are struggling financially and considering filing for Chapter 7, it is best to seek legal guidance as early as possible to have the assistance of an experienced attorney and benefit from the many forms of “bankruptcy plan......

Proof of Claim in Chapter 7

In Chapter 7 bankruptcy cases, a creditor must file a “Proof of Claim” (PoC) in which it states: how much you, the debtor, owe to the creditor; why the creditor is owed this amount; and whether this debt is secured by “property of the Estate.” PoCs are also supported by documentation such as copies of Judgment Orders and calculations of debts owed.A creditor’s PoC generally represents what it m......

Life After Chapter 7 Bankruptcy

If you’re filing for Chapter 7 bankruptcy, you may have a variety of questions about what things will be like when bankruptcy is over, such as how your credit will be affected and whether new credit will be available. The truth is that while individual cases can vary greatly, Chapter 7 offers you the opportunity for a fresh financial start, but you must begin and maintain sound financial practi......

How your Attorney Ensures a Successful Bankruptcy

Filing for Chapter 7 bankruptcy without the assistance of a dedicated bankruptcy attorney can be dangerous and put your discharge and new financial start in jeopardy. Without an attorney’s assistance, you may risk missing important deadlines, submitting incomplete information, or leaving exempt property unclaimed, and many who ......

More Helpful Guidelines for Chapter 7

Here are some guidelines for Chapter 7 bankruptcy regarding changed residence, court appearances, and how soon automatic stays go into effect:- How soon will creditors stop calling after I file for Chapter 7? – Creditors must immediately cease any debt-collection efforts when they become aware of your filing. W......

Reaffirmation Agreements in Chapter 7

After filing for Chapter 7 bankruptcy, a creditor may ask you to “reaffirm” a particular debt, or you may choose to reaffirm debt yourself. A “reaffirmation agreement” made between you and a creditor, and enforced by signing a legally-binding document, states that you will pay some or all of a debt which may otherwise have been dischargeable in order to keep certain property. These agreements a......

Unique Exemptions for Chapter 7

For Chapter 7 bankruptcy, Illinois provides its own state exemptions instead of the standard federal exemptions. Here are a few types of Chapter 7 exemptions under Illinois law:- Alimony, support, and maintenance – You may exempt an amount which is “reasonably necessary” for support in any of these categories.- Life insurance proceeds – This protects a payment ......

Finding Relief Through Chapter 7

If you are faced with overwhelming debt and feel as if there is no way out, Chapter 7 bankruptcy can be a viable option to find financial relief and eliminate some portions of your debt. It’s also important to remember that you’re not alone: millions of Americans are struggling with debt, underemployment, unemployment, and a depressed real estate market, but many are able to find relief through......

General Timeline for Chapter 7

“How long will my case take?” is a common question from clients who are filing for Chapter 7 bankruptcy and understandably unfamiliar with the process. Here’s a basic summary of the average timeline for Chapter 7 bankruptcy in the Northern District of Illinois, which is around four to five months:- Date of filing – When you file, the “automatic stay” officially begins, which me......

How Chapter 7 can Help You

If you are considering filing for Chapter 7 bankruptcy, it’s important to understand both what theprocess can do for you and what it cannot. With the help of an experienced attorney, Chapter 7 can help you to eliminate certain debts and start on a new path to financial freedom.In Chapter 7 bankruptcy, you have the opportunities to:- Discharge most or all of your debts, which eliminates your leg......

Filling out Schedules for Chapter 7

When you file for Chapter 7 bankruptcy, you will need to fill out “schedules,” which are documents that list all your income, expenses, assets, and liabilities. While your attorney will help ensure that these documents are filled out properly, here are brief summaries of each schedule and what they should include:- Schedule A – Your “real” property (mainly real estate), its approximate value, a......

Preparing for Chapter 7

If you are considering Chapter 7 bankruptcy, filing may seem like a complex and overwhelming process. But with proper organization of information and the assistance of an experienced bankruptcy attorney, you can ensure that you are fully prepared for what is usually a much smoother process than you may think. Here are some important preparations to consider when filing for Chapter 7 bankruptcy:......

Individual and Joint Chapter 7 Filing in Illinois

A married couple is usually considered a single financial and legal unit, but when it comes to finances, debt, and bankruptcy, there are many ways in which spouses are considered financially separate. Here are some examples:- Married couples can file jointly or individually for income taxes;- An inheritance may be considered marital property or belong only to one spouse;- A spouse can start a b......

Co-Signed Debt in Chapter 7

Chapter 7 bankruptcy is generally a faster process than Chapter 13 and can potentially eliminate most or all of your consumer debt. However, it’s important to understand how co-signers for certain debts may be affected by filing, as discharging a debt in Chapter 7 will not necessarily remove liability for a co-signer or non-filing spouse who is also responsible for the debt.You must not omit an......

Your Home and Car in Chapter 7

One of the most common myths about bankruptcy involves the fear of losing your home or vehicle. It’s a natural fear considering how essential our homes and vehicles are in our lives, and whether they will be included in bankruptcy is a common question during an initial consultation.All of your income, assets, debts, and liabilities must be listed when filing for Chapter 7 bankruptcy. Fortunatel......

Common Chapter 7 Bankruptcy Questions, Pt. 1

Chapter 7 bankruptcy can be a complex process, but with the help of an experienced Chapter 7 bankruptcy attorney, you can successfully eliminate certain debts and get your finances back in order. Here are some common questions about Chapter 7:     - Can spouses file jointly for Chapter 7? – A husband and wife c......

Common Chapter 7 Bankruptcy Questions, Pt. 2

If you’re considering filing for Chapter 7 bankruptcy, you may have a variety of questions about the process and how it will affect you and your finances. Here are some more common questions and concerns about Chapter 7:     - What are secured creditors? – These are creditors which have valid liens or mortgages......

Your Home and Chapter 7

If you’re struggling financially and considering filing for Chapter 7 bankruptcy, you may be wondering about the future of your house and what you can do to protect it. In Chapter 7, you can protect your house if you are current on your mortgage and do not exceed your permitted amount of equity in the house, known as the “homes......

Common Reasons for Filing Chapter 7

The vast majority of Chapter 7 bankruptcy clients are good people who have simply fallen into difficult financial situations for a variety of reasons. Some clients are curious about the most common reasons to file for bankruptcy to see how their circumstances match with others’, and it’s important to remember that you are never alone if you are struggling with debt.While the law does not requir......

The Means Test for Chapter 7

If you are considering filing for Chapter 7 bankruptcy, you’ll need to pass a “means test,” which determines eligibility based on your income and unsecured debt. And if you feel overwhelmed, remember that you’re not alone. Speak with an experienced bankruptcy attorney today for a free consultation.The means test has two parts, and you only need to pass one to be eligible for Chapter 7 bankruptc......

Important Chapter 7 Reminders, Part 1

Chapter 7 bankruptcy can be a complicated process, and here are some important considerations for some of the lesser-known aspects of this type of bankruptcy:     - First Meeting of Creditors – Both you and your spouse (if applicable) will need to attend this meeting, and you’ll need both picture identification and proof of your Social Security number. It is usually scheduled f......

Chapter 7 Limitations and Disqualifications

Because Chapter 7 bankruptcy can potentially eliminate debt, Illinois law imposes strict income-and debt-limitations to ensure that this protection is available only for those who need it most.To be eligible for Chapter 7, your income should be below the median income in the state of Illinois, and this income comparison depends partially on the number of people in your household; the income cap......

The Homestead Exemption in Chapter 7

In Chapter 7 bankruptcy, the “homestead exemption” – which varies by state – refers to the equity you can protect during your bankruptcy. Some states have large or unlimited homestead exemptions while others have none at all, and remember that Illinois does not allow a choice between the state and federal exemption system; you must abide by Illinois’s state system.Within Illinois’s Compiled Sta......

Eligibility and Reaffirmation for Chapter 7

If you are struggling financially and considering filing for Chapter 7 bankruptcy, here are some more guidelines and considerations about the bankruptcy process:     - Eligibility – You will be eligible for Chapter 7 if you have not filed for Chapter 7 in the past eight years and your income is below a certain limit; your income-limit depends on both your household size and Ill......

Common State Exemptions for Chapter 7

When filing for Chapter 7 bankruptcy in Illinois, you must use the state’s exemption system rather than choose between it and the federal system. Here are some common Illinois bankruptcy exemption statutes:     - 735-5/12- 1001 – Motor vehicle (up to $2,400), health aids, clothing, family pictures, school books, Bibles, personal injury compensation (up to $15,000), wrongful dea......

Conditional Tax Relief in Chapter 7

While many tax debts are not dischargeable in bankruptcy, in certain Chapter 7 bankruptcy cases you may be able to eliminate some state tax debts and IRS debts. However, proper timing and the assistance of an attorney are essential to maximize your tax relief, and filing at the wrong time can be extremely costly in the long run.Certain tax debts may be dischargeable in Chapter 7 under the follo......

Credit Card Debt and Chapter 7

With the help of an experienced bankruptcy attorney, you may be eligible for relief from credit card debt in Chapter 7 bankruptcy. However, you must be careful to avoid creating false suspicion of fraud if your bankruptcy is filed soon after making large credit card purchases, and your attorney can answer your questions and help you understand your options.In Chapter 7, you may be able to compl......

Your Credit Report After Chapter 7

Your credit report may reflect your Chapter 7 bankruptcy for ten (10) years after you file, while Chapter 13 bankruptcy may be shown for seven (7) years after filing. The debts you list in Chapter 7 will be listed as part of the bankruptcy in your credit report, and any co-signers on your debt may also be affected.A few months after being discharged from Chapter 7, it’s recommended that you obt......

The Statement of Intention in Chapter 7

When you file for Chapter 7 bankruptcy, you will need to file a written “Statement of Intention,” which outlines your secured property (such as your home or car), what you will keep, and what you’ll be giving up to creditors. This statement will be drafted by your attorney and must be filed either within 30 days of your bankrup......

Important Chapter 7 Reminders, Part 2

Chapter 7 bankruptcy can be a complex process, but you can never do too much research to ensure that you’re prepared, and your attorney will be there to help guide you every step of the way. Here are some additional considerations for Chapter 7 bankruptcy: Adding creditors – If you realize after filing ......

Chapter 7 and Motor Vehicle Exemptions

If you’re considering filing for Chapter 7 bankruptcy, you may be concerned about what could happen to your car and whether you will keep it during or after bankruptcy. Fortunately, Illinois law provides a motor vehicle exemption which will allow you to protect up to $2,400 in car equity.Of course, if your car’s entire eq......

Chapter 7 and Social Security Benefits

If you’re receiving disability benefits, they may be considered an asset in bankruptcy, but are typically protected by both state and federal exemptions during Chapter 7 bankruptcy:Social Security Disability Insurance (SSDI) – SSDI benefits are usually protected due to a debtor’s need for these benefits to provide support while they cannot work. If you’ve received a lump sum payment for past be......

Chapter 7 and Divorce

If you are going through both a divorce and Chapter 7 bankruptcy, there is a variety of factors to consider, including timing, your income, the status of secured debt, and whether property settlements are dischargeable.You may file a joint bankruptcy either before or during the divorce, or an individual bankruptcy before, during, or following the divorce. This may depend on the types of debt yo......

What Chapter 7 Bankruptcy Won't Do

If you’re struggling financially and considering filing for Chapter 7 bankruptcy, it could be your best option to halt the collection efforts and start on a new path to financial freedom. Despite its potential benefits, however, it’s also important to understand what bankruptcy cannot do for you, and here are some essential considerations.Bankruptcy will not:Remove......

Chapter 7 and Wage Garnishment

In Illinois, judgment creditors are capable of “wage garnishment” via a court order, meaning a certain percentage of your professional wages is transferred to the creditor before you even receive it in order to pay debt. This, of course, requires a “valid judgment debt” as determined by the court and creditors must file actions in court to claim a percentage of your wages, typically around 15% ......