Overview of a Chapter 7 Bankruptcy
A Chapter 7 bankruptcy in Illinois gives a person a fresh start with his or her finances by wiping out debt in a relatively short amount of time. The benefits of filing a Chapter 7 bankruptcy begin immediately. Creditors are forbidden from contact; lawsuits and judgments are stopped; wage garnishment ceases; bank accounts are unfrozen; and, in most circumstances, all dischargeable debt is wiped out within 3-6 months of filing. In the vast majority of cases, a person will get to keep all of his or her assets. A Chapter 13 bankruptcy will be recommended if an experienced bankruptcy attorney at JRQ & Associates determines that an asset that you would like to keep may be lost through a Chapter 7 bankruptcy. Some features of a Chapter 7 bankruptcy have been laid out below, but the process is best utilized with the assistance of an experienced bankruptcy attorney at JRQ & Associates.
An individual filing a Chapter 7 bankruptcy should know his or her rights when it comes to existing debts and harassment from creditors to pay. Upon the filing of Chapter 7 bankruptcy, an “automatic stay” instantly springs into existence. No further Court review or order is needed. The automatic stay immediately stops all creditor action and allows you some much-deserved peace and quiet.
A Chapter 7 bankruptcy is available for people that have an average monthly income less than the state’s median income. Many individuals with higher incomes may still qualify if they pass a “stringent means” test. An experienced bankruptcy attorney at JRQ & Associates will identify whether or not a person will qualify for a Chapter 7 bankruptcy under either of these income calculations.
The vast majority of people that file a Chapter 7 bankruptcy will keep their assets. Again, a Chapter 13 bankruptcy will be recommended for a person that has the potential to lose any asset that he or she wants to keep. Illinois provides generous bankruptcy exemptions that allow a person to walk away with all of his or her property even after debts are discharged. An exemption is important because the exempt property is not used to pay existing debts during a Chapter 7 proceeding. The Court only considers the equity value (a house, car, etc. being worth more than the underlying debt). Some of the most helpful Illinois exemptions include up to $30,000 (if married and filing jointly) of the equity in a house, $4,800 in vehicles, $15,000 in personal injury settlement, most retirement plans, alimony, child support payments, and many others. This list of exemptions is only a sampling of the most common examples. A Chapter 7 bankruptcy attorney at JRQ & Associates will provide assistance identifying all of the potential exemptions that can be utilized.
At the end of the process, most people will walk away completely debt-free. There are only a handful of debts that are not discharged at the end of the proceeding. These debts include, but are not limited to, back child support, alimony obligations, certain tax debt, and student loans.
An Illinois resident considering a Chapter 7 bankruptcy to help relieve his or her heavy financial burden should not hesitate to contact an experienced bankruptcy lawyer at JRQ & Associates. A prospective filer will receive a free bankruptcy consultation with one of our experienced bankruptcy attorneys. The benefits of a Chapter 7 bankruptcy start immediately after the case is filed and have already helped thousands of Illinois residents this year. Contact us now and get your life back on track.