Introduction To Bankruptcy In Illinois
If you’re considering bankruptcy in the Chicago area, it’s genuinely imperative to have the advice and assistance of an experienced Chicago bankruptcy lawyer. Most personal bankruptcies are Chapter 7 bankruptcies. In a Chapter 7 bankruptcy, the bankruptcy court liquidates most of your assets and uses the funds to pay off as much of your debt as possible. Anything not paid in a Chapter 7 bankruptcy is discharged or erased. If you file a Chapter 13 bankruptcy, you’ll develop with your lawyer a plan to pay off priority and secured debts plus as much of your unsecured debt as possible over a specified amount of time.
Chapter 7 bankruptcy is available to debtors whose average monthly income for the previous six months is less than the state’s median income, which is recalculated annually. Those with incomes exceeding the state’s median income qualify for Chapter 7 bankruptcy only if they pass a rigorous means test. The duration of a Chapter 13 bankruptcy also depends on how your monthly income compares to the state median income. If you make less than the median, your plan should take no more than 36 months, although the court may extend it to 60 months for good cause. If your monthly income matches or surpasses the Illinois median, your plan will usually last 60 months (5 years). If you can pay all of your unsecured debt in less time, do it.
When you file for bankruptcy, you are allowed to retain some of your personal property, called “exemptions,” including health aids, a bible, clothing, prepaid tuition trust funds, certain pensions, public benefits, and the property of a business partnership. Illinois also exempts up to $15,000 of equity interest in owner-occupied real estate and $2,400 of equity interest in motor vehicles.
In Illinois and everywhere else, bankruptcy can be complicated. Don’t try to do it by yourself – any mistakes could make your financial circumstances even worse. For the advice and help you need if you’re struggling with overwhelming debts in the Chicago area, contact an experienced Chicago bankruptcy lawyer as quickly as possible.
