About Chapter 7 bankruptcy
You may be concerned about the stigma of filing for bankruptcy or worried that filing will "ruin" your credit. However, the bankruptcy law is intended to repair your credit, and bankruptcy is more common than you think. Chances are, you already know several people who have filed for bankruptcy. Indeed, many famous people have filed for bankruptcy and have gone on to achieve great personal and financial success, among them Mark Twain, Milton Hershey, Walt Disney, and Francis Ford Coppola.
Consider bankruptcy if you:
• Have had a severe financial setback, such as a divorce, job loss or a reduction in pay, or injury or illness that has resulted in high medical bills;
• Are paying only minimum amounts on your bills, or cannot afford to pay the minimums; or
• Are being sued by one or more creditors.
A bankruptcy may not eliminate all debts you owe. For example, child support, spousal maintenance, most student loans, recent cash advances and large credit card purchases, and most recent back taxes cannot be discharged. Also, if you desire to keep your house or car, you may need to reaffirm those debts and continue to pay them as before. Chapter 7 bankruptcy will enable you to eliminate your remaining debt.
Illinois law allows you to keep certain property, called “exempt” property. The following property is protected:
• Pensions and qualified retirement plans
• Maintenance and child support
• Social Security benefits & lump sum payments
• Workers’ compensation
• College tuition 529(a)(1) savings account
• Clothing
• Whole life insurance policy cash surrender value (if the beneficiary is a dependent)
Other exemptions include, but are not limited to:
• Personal injury- $15,000 protected ($30,000 if spouses filing jointly)
• Homestead- – Personal residence of the debtor $15,000 ($30,000 if spouses filing jointly)
• Motor vehicle - Up to $2,400 in one motor vehicle ($4,800 if spouses filing jointly)
• “Wild card”- – any personal property of the debtor up to $4,000 (a portion of this exemption may be applied toward the motor vehicle)
In order to be eligible for Chapter 7, you must take a "means test." If your income for the previous six months is below the state median, you are eligible to file. You may still be able to file for Chapter 7 if your income is above the median, so long as your disposable income is not sufficient to pay your bills.
For a confidential bankruptcy consultation, please give us a call or use our online contact form. Once you have scheduled your consultation, we will send you a link to our convenient online questionnaire to fill out prior to your appointment. All data that you enter is protected by high-grade 256-bit SSL encryption (the same level of encryption used by the electronic filing system for the U.S. Courts) and is fully secure.
© 2010-2011 Law Office of Sandra M. Emerson. The information on this website is for general information purposes only. Nothing on this or any associated pages, links, documents, comments, answers, emails, or other communications should be taken as legal advice. This information on this website is not intended to create, and the viewing of information on it does not constitute, an attorney-client relationship. We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.
