The typical personal bankruptcy is a Chapter 7 bankruptcy, where the court sells off most of your assets and uses the funds to pay as much of your debt as possible. Anything not paid is discharged or erased. However, under a Chapter 13 bankruptcy, you develop a plan to pay off important and secured debts and as much unsecured debt as possible over a specified length of time. If you are considering bankruptcy in the Chicago area, it’s imperative to speak first with an experienced Chicago bankruptcy lawyer. Bankruptcy is not for everyone, and a knowledgeable lawyer may be able to suggest more appropriate alternatives.
Chapter 7 bankruptcy is available to debtors whose average monthly income for the previous six months is less than the state’s median income. In Illinois, the median income is $3,961 monthly ($47,536 annually) for a single-person household as of 2014. Those with higher incomes may file for Chapter 7 bankruptcy only if they pass a stringent means test. A good bankruptcy lawyer can give you more details regarding after assessing your personal circumstances.
When you file for bankruptcy, you’re allowed to keep some of your personal property. These are called exemptions. Illinois lets you keep personal property including medical devices, a Bible, clothing, and prepaid tuition trust funds. Certain pensions, public benefits, and the property of a business partnership are exempt as well. Illinois also exempts up to $15,000 of equity interest (the amount you actually own) in owner-occupied real estate, and $2,400 of equity interest in motor vehicles.
Bankruptcy is a legal way to get a fresh start, but bankruptcy laws in Illinois are complicated. A good bankruptcy lawyer can evaluate your personal financial situation and suggest the options and alternatives that are best for you and your family. If you’re struggling with debt in or near Chicago, call today and arrange for a consultation with an experienced Chicago bankruptcy lawyer.