Bankruptcy is a method of seeking relief from debts that you cannot repay. The purpose of filing for bankruptcy is to help individuals get out from under overwhelming debt. This is accomplished through legal proceedings that are held to help resolve the filer of their debt obligations while finding a way to provide partial repayment to debt collectors. There are several different types of bankruptcy, known as “chapters”, that apply to either corporate or personal debt. When you file for bankruptcy, it is wise to get an attorney involved because of the complexity of the process and potential ramifications filing for bankruptcy can have on your credit history.

Chapter 7 and Chapter 13 bankruptcy are two popular bankruptcy solutions for personal debt management. However, there are distinct differences between the two that you should understand.

With Chapter 7 bankruptcy, your assets are sold off as a means of repaying some or all of the debt you currently owe. Chapter 7 bankruptcy is reserved for individuals with low income who pass the “means test”, which compares your income against the median income of households your size in your state.

With Chapter 13 bankruptcy, your debt is reorganized into a payment plan that allows you to repay what you owe over several years. Chapter 13 bankruptcy does not require you to relinquish property. However, there are debt limits; you cannot have more than $394,725 in unsecured debts and $1,184,2000 in secured debts.

A bankruptcy attorney can advise you on which type of bankruptcy to pursue, counsel you on how to navigate the process, file necessary documentation on your behalf, represent you in the courtroom, and negotiate the best possible terms. There is a lot that goes into filing for bankruptcy than appears at the surface in terms of preparing, such as valuing your property, determining which of your debts can be discharged, and much more. A bankruptcy attorney will handle all of this for you.

You do not have to have a bankruptcy lawyer represent you, but it can be advantageous to have an attorney on your side to help you achieve the best possible outcome and ensure all the right steps are taken. A bankruptcy lawyer can be especially helpful if your wages are being garnished, you are facing foreclosure or seizure of your belongings, or have creditors harassing you nonstop.

While you might be tempted to forgo hiring a lawyer in the interest of saving money, you may lose out on more money in the long run without a bankruptcy attorney negotiating on your behalf, especially if you are filing for Chapter 7 bankruptcy where your assets are on the line. As an established law firm, our bankruptcy attorneys in Chicago are well-equipped to devise a personalized bankruptcy strategy with a single goal in mind, achieving the best possible resolution for your case.

If you have accumulated debt that you cannot repay in the foreseeable future and it’s destroying your credit, you should consult an attorney as soon as possible to determine whether bankruptcy is the right solution for you, and if so, which type of bankruptcy you should pursue.

If you are filing for bankruptcy in Illinois, then you need to hire one of our bankruptcy lawyers in Chicago on your side. Do not hesitate to call us, we can assist you from start to finish so that you can stop foreclosure, the seizure of your wages and possessions, and the constant demands of creditors. Working with us is the first step to rebuilding your credit and peace of mind.

The cost of hiring a bankruptcy attorney is unique to each individual case. This is because your unique circumstances dictate the amount of work, resources, and time your attorneys need to devote to helping you file for bankruptcy. Other factors, such as state of residence, your attorney’s experience, and more, can also impact attorney fees.

That said, our law firm is dedicated to providing legal counsel that is affordable. We also offer free consultations with our Chicago bankruptcy lawyers.

While there are virtually endless options, not all bankruptcy lawyers are created equal. When searching for a bankruptcy attorney in Illinois, there are certain factors you should pay specific attention to, including:

• Their reputation (research reviews and professional references)
• Years of experience (more experienced attorneys may have a greater understanding of the nuances of bankruptcy filings)
• Your comfort level with them (communication is key when resolving legal matters)

While this might seem obvious to some, if you have not hired an attorney before, it’s important to note that attorneys typically focus on a specific area of law—make sure you verify that bankruptcy law is one of your lawyer’s focus areas. We are confident that our bankruptcy attorneys in Chicago check off all of these requirements and more.

The general steps of the bankruptcy process are as follows:

1. Consultation with a bankruptcy lawyer
2. Credit counseling
3. Complete and file forms, provide documentation, and submit a proposal
4. Make first payment (Chapter 13) or reaffirm debts (Chapter 7)
5. Attend a 341 meeting (meeting of creditors)
6. Enter payment plan (Chapter 13) or liquidate assets (Chapter 7)
7. Complete exit counseling
8. Debts discharged

Certain debts can be resolved with bankruptcy, while others are not dischargeable. Chapter 7 bankruptcy can resolve debt such as medical bills, credit card debt, personal loans, payday loans, and certain tax debts. However, Chapter 7 bankruptcy is not a solution for student loans, back child support or alimony, fines or penalties to government agencies, and HOA fees, among others.

Chapter 13 bankruptcy can discharge debts such as credit card debt, medical bills, utility bills, older back taxes, student loan debt, post-petition HOA fees, property damage, some divorce settlement debts, and more. You may also be able to resolve debt that was not discharged in a prior bankruptcy case. However, debts such as outstanding alimony payments, back child support, and mortgages cannot be resolved with Chapter 13 bankruptcy. That said, it is not guaranteed that all of these debts will be discharged.

When you consult a bankruptcy attorney, they will be able to explain which of your debts you may be able to discharge with a bankruptcy. Keep in mind that you still may be eligible to file for bankruptcy even if you do not have legal immigration status!

Generally speaking, bankruptcy can be a fairly private matter. Of course, those directly impacted by your debts will typically be notified, such as:

• Your creditors
• Those involved in the case (your lawyer, bankruptcy trustee, and others present at the bankruptcy court proceedings)
• Co-signers (if you have discharged a debt that was co-signed, the other individual will be notified)
• Future employers (if a potential employer runs a background credit check, they will see that there is a bankruptcy on your record, but you cannot be denied employment solely because of bankruptcy)
• Future landlords (a prospective landlord can run a credit check and deny you because of bankruptcy)

Whether filing bankruptcy in Illinois affects your business depends on the structure of your business, the severity of your debts, and whether there are other owners. In many cases, yes, bankruptcy will affect your business, if only for the immediate future. This is because your business can continuously incur assets and liabilities which affect your bankruptcy estate. In some cases, you may be required to dissolve your business and sell your assets, or step down from the business. However, in larger businesses, such as a corporation with various owners, bankruptcies shouldn’t have much, if any, effect on operations.

When our bankruptcy attorneys evaluate your case, we can help you decide what the right move is for your business if you choose to file.

Bankruptcy is not always your only option to get out of debt. You can also consider:

• Debt management plan and credit counseling
• Selling off your assets to come up with cash to pay debts
• Strategic default, deed in lieu of foreclosure, or short sale
• Debt settlement
• Applying for a debt consolidation loan

In some cases, doing nothing may be an option if you have little to no assets or financial means. Let our bankruptcy attorneys in Chicago help you make this decision, so you can ensure you’re fully aware of the pros and cons of each of these options, as well as filing for bankruptcy in Illinois.

If you were in the process of filing for bankruptcy and the court is currently closed due to COVID-19, you will be protected by the automatic stay until proceedings can resume. As the country’s response to the pandemic evolves, further changes may affect your proceedings, so be sure to remain abreast of how your district is handling these processes.

Additionally, if you are currently in a payment plan as a result of bankruptcy, you may be eligible for an extension under the CARES Act (if you are experiencing hardship due to COVID-19).

Once your debt has been discharged, it is important to hold onto all relevant documentation. Now that you have control over your debt, it is also critical to implement protective measures to keep it that way, such as regularly checking your credit reports, closely following a budget, and taking precautions when you do consider new lines of credit down the road.