|
BANKRUPTCY |
|
What we will do for you |
| If you are experiencing financial difficulties, we will sit down with you in our office and discuss your situation without any charge. After reviewing the facts of your case, we will explain all your options to you and give you our recommendation. |
| If you are interested in either a Chapter 7 or Chapter 13 proceeding, we will give to you a set of information sheets for you to fill out. We will explain to you how much money we need before filing a Chapter 7 or Chapter 13 for you. |
| Once you have filled out the information sheets and have the retainer fee, we will have you schedule an appointment with our Legal Assistant. She will go over the forms with you and make sure we have all the information we need in order to file for you. |
| When we have all the information we need, we will usually have the papers prepared for you to sign within a few days. |
|
GENERAL INFORMATION |
|
When creditors are "at your door" many persons think of filing bankruptcy. Often they are reluctant because they really do not understand bankruptcy. |
|
Chapter 7 Bankruptcy (simply put) means the following: |
| A. You will not be legally required to pay most of your debts (three major exceptions being child support, most taxes and student loans). |
| B. You will get to keep all your property that is exempt on which a creditor has a lien or mortgage (if you pay the secured creditor and any equity you have in the property is exempt). |
| One person's exemptions in Illinois (doubled for a married couple) are basically as follows: |
| A. $15,000 of "equity" in real estate (Example: If a couple own a home worth $80,000 and have a mortgage of $50,000, they have $30,000 in "equity". If they pay the mortgage, they can keep their home because their exemption together totals $30,000. |
| B. $4,000 of property of any kind or description other than real estate. |
| C. $2,400 in a motor vehicle. |
| D. $1,500 in tools of a trade. |
| E. Miscellaneous items, such as worker's compensation benefits, unemployment compensation, life insurance, and others. |
| The date the debtor obtains relief from his debts is the date of filing of the bankruptcy petition. Although he is not "discharged" from his debts until later, after the filing of a petition no creditor can do any more to collect a debt without permission of the Bankruptcy Court. You can only file a Chapter 7 every eight (8) years. |
|
Chapter 13 Bankruptcy means the following: |
| A. You will pay your secured creditors and some money to your unsecured creditors. In the Decatur Area, you must pay at least 10% of your unsecured debt. (In a Chapter 13, payments are made to a person called a Trustee who divides the payments among your creditors.) |
| B. You will keep all of your property if your Chapter 13 plan is confirmed (unless you choose not to pay a secured creditor). |
| You may be eligible for a Chapter 13 even if you have filed a Chapter 7 in the last eight years. |
| You can force a mortgage company
or loan company to permit you to catch up your payments on a home or car loan in
a Chapter 13.
|
|
New Bankruptcy Law Congress passed a major change of the bankruptcy laws. This change went into effect on October 17, 2005. Under the new law, persons making more than the statewide median income may be forced to file a Chapter 13 instead of a Chapter 7. For most people, the new law will still allow them to file a Chapter 7 and discharge their dischargeable debts. The new law does require that a debtor go through consumer credit counseling before filing. |
| Obviously, this is a surface analysis of bankruptcy. For more information, call us at (217) 422-2400 to arrange an appointment. |