Chapter 7 Bankruptcy Lawyers Kane County, Illinois
Over 40 Years of Bankruptcy Law Experience
If you are struggling with debts you no longer can afford to pay, bankruptcy may be the answer for you. The type of bankruptcy that is right for you depends on your particular circumstances. At Illini Legal Services, we handle all bankruptcy filings, to provide the type of bankruptcy services you need. One of the types of bankruptcy we handle is Chapter 7 bankruptcy.
Discharge Your Debts through a Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is a debt liquidation bankruptcy in which most forms of debt are completely eliminated. A Chapter 7 bankruptcy can discharge credit card debts, medical bills and other unsecured debts. Only a limited number of debts, such as child support and school loans, may not be discharged. By using exemptions that are allowed by law, you will be able to keep your property in most instances.
Through a Chapter 7 bankruptcy, you may be able to:
Eliminate or reduce your debts
Stop creditor harassment
Stop a wage garnishment
To be eligible for Chapter 7 relief, you must meet an economic means test. At your free consultation, we will discuss your eligibility for Chapter 7 bankruptcy. Most of the people who contact our firm are pleased to discover that they are eligible for Chapter 7 relief.
If you are not eligible for Chapter 7 bankruptcy, a Chapter 13 bankruptcy may provide the relief you need. Chapter 13 bankruptcy is a debt repayment plan that is approved and ordered by a Bankruptcy Court. Chapter 13 is frequently used to help people avoid a home foreclosure.
People who retain our law firm can be confident that their case will be handled with the highest degree of competence and care.
Chapter 7 Bankruptcy FAQ's - Frequently Asked Questions
What is a Chapter 7 bankruptcy case and how does it work?
1. A Chapter 7 bankruptcy is a proceeding under federal law in which the debtor seeks relief under the bankruptcy code. In a Chapter 7, the debtor must turn his or her non-exempt property, if there is any, over to a trustee, who then converts the property to cash and pays the debtor's creditors.
2. What is a Chapter 7 discharge?
It is a court order releasing a debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. A debt that is discharged is a debt that the debtor is released from and does not have to pay. However, not all debts are discharged by a Chapter 7 discharge.
3. Who is permitted to file a Chapter 7?
Any person who resides in, does business in, or has property in the United States is permitted to file Chapter 7 except a person who has intentionally dismissed a prior bankruptcy case within the last 180 days. To be permitted to maintain a Chapter 7 a person must qualify for relief under a process called means testing.
4. What is means testing?
Means testing determines a person's eligibility to file a Chapter 7. Under this method a person must show that he or she is not able to pay a minimum of $100.00 per month for 60 months to his or her unsecured creditors from his or her disposable monthly income. If a person is able to pay $100.00 per month or more to unsecured creditors for 60 months the Chapter 7 may be dismissed or converted to a Chapter 13.
5. What types of debt are not dischargeable?
All debts may be dischargeable except for those types of debts that are nondischargeable by law. Below are just some of the debts that are not dischargeable:
a. Most tax debts and debts that were incurred to pay nondischargeable federal tax debts.
b. Debts for domestic support obligations, which may include debts for alimony, maintenance, or support and certain other divorce related debts, including property settlement debts.
c. Debts for certain fines or penalties.
d. Debts for most educational benefits and student loans.
e. Debts for personal injury or death caused by the debtor's operation of a vehicle while intoxicated.
6. Is there anything that a person must do before filing?
A person is not permitted to file a Chapter 7 unless he or she has, during the 180 day period prior to filing, received from an approved budget and credit counseling agency an individual briefing that outlined the opportunities for available credit counseling and assisted the person in performing a budget analysis.
7. How much is the filing fee?
The filing fee is $306.00 for either a single or joint case. The filing fee is payable when the case is filed.
8. May a husband and wife file jointly?
A husband and wife may file a joint case under Chapter 7. However, both husband and wife must receive the required credit counseling before the case is filed and both must complete the required financial management course after the case is filed. A husband and wife should file a joint Chapter 7 if both of them are liable for one or more significant dischargeable debts. If only one spouse files, a creditor may later attempt to collect the debt from the nonfiling spouse.
9. How does filing affect collection proceedings in progress?
The filing of the case automatically suspends virtually all collection proceedings pending against that person. A few days after a case is filed the court will mail a notice to all creditors ordering them to refrain from any further action against the person. This is called the "automatic stay". Criminal proceedings and child support or domestic support actions are not affected by the automatic stay.
10. How does filing a Chapter 7 affect a person's credit rating?
Filing will usually worsen your credit rating. However, some financial institutions openly solicit business from person who have filed because it will be at least 8 years before the person can file another Chapter 7.
11. Will a person lose all of his or her property when they file?
Normally a person will not lose all their property. Certain property is exempt and may not be taken by creditors. A person may also be allowed to keep other encumbered exempt property. Encumbered property is property against which a creditor has a valid lien.
12. What is exempt property?
Exempt property is property that is protected by law from the claims of creditors. However, if exempt property has been pledged to secure a debt, the lien or mortgage holder may claim the exempt property by foreclosing on the mortgage. Your attorney can advise you in these matters.
13. When must a person appear in court and what happens?
The first court appearance is for a hearing called the "meeting of creditors". This is usually held about a month after the case is filed. The person filing the case must bring photo identification, his or her social security card, his or her most recent pay stub and all of his or her bank and investment account statements to the hearing. At this hearing the person is put under oath and questioned about his or her debts, assets, income and expense by the hearing officer or trustee. The trustee is a person appointed by the United States Trustee's Office to examine the person who filed the case, collect the person's nonexempt property, and pay the expenses of the estate and the claims of the creditors.
14. What if there are no assets?
If there are no nonexempt assets, a notice will be sent to the creditors advising them that there appear to be no nonexempt assets from which to pay creditors, that it is unnecessary for them to file claims, and that if assets are later recovered, they will be given an opportunity to file claims. This is a no asset case.
15. How are secured creditors dealt with?
Secured creditors are creditors with valid mortgages or liens. A secured creditor is usually permitted to repossess or foreclose on its secured property, unless the value of the secured property greatly exceeds the amount owed to the creditor.
16. How are unsecured creditors dealt with?
An unsecured creditor is a person without a valid lien. If the person filing has nonexempt assets, unsecured creditors may file claims with the court within 90 days after the first date set for the 341 meeting of creditors.
17. May a utility company refuse to provide service?
If within 20 days after a case is filed, the person filing the case furnishes a utility company with a deposit to insure the payment of future utility services, it is illegal for a utility company to refuse to provide services to the person after the case is filed, even if its bill for past services is discharged.
18. How does filing affect cosigners?
A Chapter 7 discharge releases on the person who filed. The liability of any other party on a debt is not affected by the filing. Therefore a person who has cosigned or guaranteed a debt is still liable for the debt.
19. Will I be able to keep my car?
In many instances you will be able to keep your car. It may be exempt property or it may have a lien against it. Depending on the value of the car and the nature of the lien you may be able to make an agreement that will allow you to keep you vehicle. Your attorney can help you.
20. Will I be able to keep my house?
Many houses have certain exempt values. These coupled with the security or lien interest may allow you to keep you house. Much depends on the status of the payments and the nature of the security. You should immediately seek the advice of counsel to determine what to do.
At Illini Legal Services, we offer a free in person consultation to each of our clients. During your consultation, we will take the time to listen to your financial concerns and assess your case and individual situation. We have four locations to serve you. Contact us today for help!
Illini Legal Services is engaged in the private practice of law and is not a public legal aid agency. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.