Debt is a heavy burden to carry, especially if you do not see yourself paying off your debt in a reasonable period. If it is a struggle to make your payments or keep your property, Chapter 7 Bankruptcy erases your dischargeable debts and gives you a fresh start. In many ways, it is a new beginning because the old debts are erased, and the past will no longer burden you. It is an excellent option if your debt is not allowing you to move forward with your life. Unforeseen circumstances or unwise financial decisions can put you in a situation where you may lose your home, car or have your wages garnished. Do not give up or despair because Chapter 7 bankruptcy gives you the option to erase your dischargeable debts under the protection of US bankruptcy law and the State of Illinois laws.
As a Chicagoland bankruptcy lawyer in Cook, Lake, and DuPage, McHenry Kane, and Will counties, I have helped my clients get out of debt since 1995. I have helped hundreds of individuals and families get a new financial start by getting a discharge of debts in Chapter 7 bankruptcy.
So, what happens when I file Chapter 7 Bankruptcy?
Once your case is filed, your creditors and their collectors are not allowed to call or contact you in any way whatsoever. If they continue to contact you, they can be sanctioned by the court and sued for monetary damages. All lawsuits, collection activities, and wage garnishments must also stop. With a filed bankruptcy case, you will not have to worry about being harassed by your creditors while you are under federal bankruptcy protection. The pressure is off, and then life gets much - much better.
Within a few weeks of filing your bankruptcy, you must attend a meeting with a Chapter 7 trustee that reviews the paperwork filed with Court. I also attend the meeting and prepare you, so everything goes smoothly. The Chapter 7 Trustee is usually a bankruptcy lawyer who reviews all the filed documents and makes sure that everything is done correctly. Your creditors are also allowed to attend the meeting. In almost all Chapter 7 cases, no creditors show up to the meeting. This meeting with the Trustee is often referred to as a 341 or creditor's meeting and usually lasts about 10 minutes. Your Chapter 7 bankruptcy case will take about three to four months to finish after it is filed. Upon completion, the US Bankruptcy Court will issue an order erasing your dischargeable debts at the end of your case. Once completed, you will have eliminated debts like credit cards, payday loans, personal loans, medical bills, delinquent mortgages, credit cards, personal loans, payday loans, car repossessions, car loans, wage garnishments, judgments, mortgage deficiencies, certain taxes, and other debts. You can even erase student loans if you can prove that paying them back would cause severe hardship. It is an incredible feeling to erase your debts and take control of your life once again.
What do I get to keep in Chapter 7?
Although Chapter 7 is often referred to as a liquidation, the reality of the matter is that you get to keep a lot!! The idea in a Chapter 7 bankruptcy is to give you a fresh start, a new financial life - not to leave you with nothing. Many of your assets and property are exempt from lenders under federal and state law. Thus, when you file for bankruptcy with the help of a seasoned bankruptcy lawyer, you get to keep those exempt assets.
You can keep:
- your everyday things and household goods and furnishings.
- your retirement accounts - including but not limited to - your 401k,
- pension, IRAs, life insurance policies, and other retirement accounts;
- you can keep your car if you can continue making the payments;
- you can refinance your car and lower the loan amount from lenders who lend to Debtors in Chapter 7 (referred to as 727 redemptions); and
- You can keep your home if you can continue to make payments and do not have a lot of equity. If you have substantial equity in your home, you can file Chapter 13 and save your home.
Do not be afraid or discouraged to file for bankruptcy. The right to file bankruptcy is found in the United States Constitution. The forefathers of this country did realize that debts can keep a person from realizing their potential without debt relief. Last year, 509,769 consumer Chapter 7s were filed in the United States. If a crushing debt is causing you to be stressed out and you want a new start for yourself or your family, a Chapter 7 bankruptcy gives you the opportunity to regain your financial freedom.
It has been a pleasure for over the last 22 years as a bankruptcy attorney in the Chicagoland area to help people and families erase the burden of unsustainable debt while keeping most of their assets and property.
Am I eligible to file for Chapter 7 bankruptcy?
If, after paying your reasonable monthly living expenses, there is not much money left over, you can qualify for Chapter 7 bankruptcy. If you have more than $4,000.00 in equity in your car or more than $15,000 ($30,000 for a couple) of equity in your home, you may have to file and seek relief under Chapter 13 instead of a Chapter 7. It takes precise legal skills to get a person to qualify for Chapter 7. It takes more than a lot of math; it takes creativity and a keen understanding of the state and bankruptcy laws. With a seasoned bankruptcy attorney, you can be assured that your Chapter 7 will successfully conclude by getting your dischargeable debts erased.
What happens to my credit score if I file for Bankruptcy?
In almost all Chapter 7 cases, your credit score will improve after your Chapter 7 has been completed. If you are late on your payments to your creditors, the credit bureaus lower your credit score, and you are, for the most part, unable to get new credit like credit cards, car loans, or house loans. Continuing to do this just assures that you have bad credit with no hope of increasing your credit score. Filing for Chapter 7 bankruptcy will, in almost all cases, increase your score if you were delinquent on your debts when your Chapter 7 bankruptcy was filed.
On the other hand, if you are current on your payments but are maxed out on your credit cards, the credit bureaus will also reduce your credit score, effectively cutting you off from any further credit. Without the ability to refinance your debt, you often get stuck paying high credit cards that take years to pay off - over 20 years in many instances if you only make the minimum payments.
My office uses sophisticated software that accurately estimates your credit score after your Chapter 7 bankruptcy is finished. You will be surprised to see that your credit score will increase within a few months of completing your bankruptcy. The great thing about the software we use is that it estimates your future credit score before filing for bankruptcy. Your credit score will continue to improve further as time goes on. You will once again be able to buy a car, get credit cards, or buy a home. As an experienced bankruptcy attorney practicing in the greater Chicago area, including Cook, Lake, and DuPage counties, I can assure you the bankruptcy system allows you to get back on your feet. Do not hesitate to take advantage of your rights and permanently remove your creditors and their collectors from your life.
How do I start?
Call me at 312-229-5500 or contact me online for a free consultation. Take advantage of the opportunity to learn about your federal and state rights and how you can best use the law to help you get out of debt. You will always be treated with respect and honesty. I am one of the most experienced bankruptcy attorneys in Illinois, so take the first step by reaching out for help.