Bankruptcy In Illinois: Where And How Long?
The traditional form of personal bankruptcy is Chapter 7, where the court sells most of your assets and uses that money to pay off as much of your debt as possible. Anything not paid is discharged or erased. Under a Chapter 13 bankruptcy, you draft a plan to pay off secured debts and as much unsecured debt as possible over a limited amount of time. Federal law governs bankruptcy, but specifics can vary by state. If you are considering bankruptcy in the Chicago area, realize that it is not always the wisest way to deal with mounting debts. Discuss your circumstances at once with an experienced Chicago bankruptcy lawyer who can suggest alternatives to bankruptcy or guide you through the bankruptcy process.
In Illinois, you must file in the district where you reside. Bankruptcy courts in Illinois are divided into three districts: the Northern, Central, and Southern. The main bankruptcy courts are in Chicago for the Northern District, Springfield for the Central District, and East St. Louis for the Southern District. Each district also has other divisional offices.
Chapter 7 bankruptcy is available to those whose average monthly income for the preceding six months is below the state’s median income. Those with higher incomes may file for Chapter 7 bankruptcy only by passing a stringent means test. In a Chapter 13 bankruptcy, the length of the bankruptcy depends on how your monthly income compares to the state median. If you make less than the median income, your plan should not exceed three years; the bankruptcy court may extend it to five years if you can present a good reason. If your monthly income matches or exceeds Illinois’ median income, your plan will typically last for five years, but you may pay off all of your unsecured debt in less time if you can.
If your debts are spiraling out of your control, bankruptcy may or may not be the right answer. Let an experienced Chicago bankruptcy lawyer take a look at your circumstances and recommend the answer that’s right for you. If you’re falling deeply into debt in the Chicago area, make that call today.
