If you’re deep in debt, you probably have these questions running through your head: I’m in over my head each month will bills, how can I get a fresh start? How can I get the creditors to stop harassing me? Are my wages being garnished, and if so what do I do?
If you have asked yourself any of these questions then read below and see how Chapter 7 Bankruptcy can help relieve your stress and put you on back the path to a successful financial future.
Top 10 Reasons to File for Chapter 7 Bankruptcy in Illinois
Even considering bankruptcy can stress people out, but there are many reasons why bankruptcy may be the best solution for your financial issues:
- Filing a Chapter 7 Bankruptcy puts you in control of your future financial security.
- Bankruptcy helps you start to address your financial situation in a constructive manner.
- Bankruptcy will not relieve you of your obligation to pay your mortgage, but it might make your mortgage easier to pay by getting rid of other debts that are weighing you down each month.
- If you do not have insurance and are over come with medical bills. Chapter 7 can help you eliminate those debts.
- You lost your driver’s license and need to get it back. Chapter 7 can help you eliminate accident debts for no insurance.
- It stops harassing behavior from creditors and collection agencies.
- Chapter 7 Bankruptcy is often the way to go because it’s fast, effective, easy to file, and doesn’t require payments over time.
- By regaining control of your finances you are now able to rebuild your credit, stay out of debt, start saving for the future and live your life the way you want: Debt free!
- Filing a Chapter 7 Bankruptcy stops wage assignments and garnishments.
- Everyone deserves a second chance.
Having a Banruptcy Attorney in Chicago who listens to your concerns, makes you feel important, does not treat you like a number, and cares about your case can be an invaluable tool when filing your bankruptcy.
Chapter 7 Bankruptcy: Simple Steps
Bankruptcy is a serious issue that is never entered into lightly. That being said, there may come a time when debt is so overwhelming and out of control that Chapter 7 becomes your best solution.
It may surprise you but the filing process is fairly simple and relatively fast.
- Get a qualified bankruptcy attorney on your side: Chapter 7 bankruptcy may be straightforward but you will still need an attorney who knows the process and understands how best to proceed.
- Take the “means test”: This is a test that evaluates your personal income in comparison to the state average. You need to pass this test to qualify to petition for bankruptcy.
- Receive a trustee: Once you pass the means test you are placed under protection and creditors will no longer be allowed to contact you for debt repayment. Instead they will be directed to your state appointed trustee who will handle them going forward.
- Liquidation: Your trustee is also given control over all of your assets. They take these assets and liquidate them into cash. That cash is then used to first pay your daily living expenses and then the remainder is distributed amongst your creditors. You may imagine that this would mean you could lose everything with Chapter 7, but this is far from true. In the state of Illinois, you can protect some or all of your property with Illinois’ bankruptcy exemptions. What you can keep really depends on your assets.
- Discharge: The Chapter 7 Bankruptcy process will last approximately 6 months. Then you will receive discharge and the bankruptcy proceedings will be complete.
- Fresh Start: As soon as your bankruptcy process is rolling any income or properties that you obtain are untouchable and yours to keep. Once you are discharged and bankruptcy is behind you your focus can be directed at rebuilding your finances.
Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy
Many people do not know the difference between filing Chapter 7 or Chapter 13 Bankruptcy. This is certainly something your bankruptcy attorney will be able to explain to you in detail but the two types of bankruptcy have some major differences.
- Liquidation vs. payment plan – Both forms of bankruptcy involve a plan to pay off your debts. Chapter 7 uses liquidation where your assets are sold for cash and the cash is used to pay off your debts. Chapter 13 gives you a payment plan and you have 3-5 years to pay back your debts without interest.
- Financial Stability – To qualify for Chapter 7 you need to take a means test to evaluate your income in comparison to your state average. Qualifying for Chapter 13 Bankruptcy requires that you have enough income coming in to make the necessary payments towards your debt for the next few years.
- Credit effects – Filing Chapter 7 will stay on your credit report for 7-10 years. The effect of Chapter 13 on your credit report for 2 years less. That is a big difference when you consider that while bankruptcy is on your record you will not be easy to get approved for a home or car loan.
With such different requirements for Chapter 7 and Chapter 13 bankruptcy you will need to get the insight of a qualified bankruptcy attorney to determine what is the best decision for your situation.
Five Tips For Getting Back On Track Financially After Filing For Chapter 7 Bankruptcy
The whole point of filing for bankruptcy is to help you get a fresh start. What you do with this fresh start is up to you! Here are a few actions that will help you stay on track:
- Order your credit report from all three companies: Experian, Equifax and Transunion.
- Make sure all of your discharged debts have been removed from these reports.
- Monitor your credit reports consistently as you work to rebuild your credit.
- Make sure that any payments you are still responsible for are made on time or early.
- If you have a credit card make sure you don’t use more than 10% of your credit limit. This will help build your credit score back up.
Do You Have Questions About Your Finances and Chapter 7 Bankruptcy?
Are you being hounded by creditors? Is it time to consider bankruptcy? Would you like to know how the legal team of Suburban Legal Group PC can help? Request a Free No Obligation Chapter 7 Bankruptcy Consultation today, and we’ll let you know your options and whether bankruptcy is the right step for you.
You can also download our book on the 12 Things You Should Know Before Filing For Bankruptcy. You’ll learn all the essentials on filing for bankruptcy in Illinois.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.