Chicago Bankruptcy FAQ’s
For more information on these and other bankruptcy topics, feel free to contact our offices anytime at 312-360-0500.
Can I ever financially recover after bankruptcy?
In the past, bankruptcy was associated with “financial failure,” but this perception has changed in the last few decades. Now, more and more people are struggling with mounting debt, high interest rates, and loss of income, so bankruptcy is quickly becoming a more attractive solution to millions of people. Two of the most popular forms of bankruptcy include:
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
Bankruptcy can actually help a person or a business recover from financial difficulties by eliminating some or all of the debt, allowing the individual or business to start fresh. Bankruptcy does not necessarily mean the end of financial stability; in fact, it can help a business or person reach financial independence.
How is business bankruptcy different from individual bankruptcy?
Just like individuals, businesses can experience difficult financial times and need to reassess their financial stability. Fortunately, forms of bankruptcy are available for businesses and individuals alike. Although a business owner would file a different bankruptcy application than an individual, business bankruptcy is essentially the same as individual bankruptcy. For example, bankruptcy for both businesses and individuals often involve:
- Evaluation of current debts and income
- Evaluation of projected debts and income
- Negotiation of repayment plans
- Protection from creditor harassment
Bankruptcy can be a good decision for both individuals and businesses who are struggling with various debts.
Can businesses file for bankruptcy?
A business can file for bankruptcy just like an individual, though there are specific forms of bankruptcy that are made for businesses under Chapter 7 or Chapter 11. Depending on the size of your business, and its particular financial circumstances, there are several options for bankruptcy. In many cases of business bankruptcy, asset liquidation is necessary in order to eliminate much of a debtor’s financial obligations.
Just like individuals, bankruptcy for businesses can provide benefits including:
- Protection against creditors
- Reorganization of finances
- Assessment of current and projected financial state
- Negotiation of repayment plan
These benefits lead many struggling business owners to turn to bankruptcy.
Who can help me with my application for bankruptcy?
Many people want professional help to file for bankruptcy and even handling the entire bankruptcy process. While bankruptcy proceedings can be lengthy and complex, legal assistance can make it less overwhelming. An experienced Chicago bankruptcy attorney is the best person to help you with your application for bankruptcy because he will be well-equipped to explain the details of the bankruptcy process and handle all of the legal negotiations for you.
Bankruptcy attorneys can help debtors in a variety of ways during the bankruptcy process. Some of the most common ways that bankruptcy attorneys provide legal assistance include:
- Formal negotiations with creditors
- Negotiations regarding repayment plans
- Negotiations regarding liquidation of assets
- Extension of payment period
Having the assistance of a reliable bankruptcy attorney during the bankruptcy process can make the situation much more manageable for people.
Where do I begin if I’m thinking of filing for bankruptcy?
Making the decision to file for bankruptcy can sometimes be the most difficult part of the bankruptcy process. Once you have decided to take control over your financial situation, it’s fairly simple to seek and receive legal assistance with filing your application. The best place to begin is with a consultation with a bankruptcy attorney.
An experienced bankruptcy attorney can help you with your initial bankruptcy application and can also help with negotiations regarding:
- Asset liquidation
- Financial evaluations
- Repayment plans
- Creditor involvement
Millions of Americans are turning to bankruptcy to help them resolve their financial difficulties.
Has the bankruptcy process changed over the years?
For the most part, the overall bankruptcy process has remained constant over the years, though it has undergone some changes. For instance, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has led to several changes for bankruptcy eligibility, but many aspects of bankruptcy have stayed the same, including:
- Different forms, like Chapters 7, 11, 12, and 13
- Ability of both individuals and businesses to file for bankruptcy
- Offering financial restructuring
- Preventing creditor harassment
Many people have discovered that bankruptcy can be a beneficial option for them if they find themselves facing overwhelming debt.
Can potential employers find out if I filed for bankruptcy?
In 2011, The Illinois Employee Credit Privacy Law came into effect. This law limits a potential employer ability to obtain your credit.
An employer or potential employer has to obtain your permission to run a credit check on you, so you control access to your personal financial information.
Although filing for bankruptcy may be difficult initially, once you get back on your feet financially, you may feel more comfortable:
- Applying for jobs
- Meeting with potential employers
- Explaining your financial past
- Making big financial decisions
- Accepting a new job
Although many people feel anxiety about filing for bankruptcy, such a decision can actually reflect a keen awareness of the need to take action and control over a difficult financial situation.
Will my spouse have to declare bankruptcy if I do?
This is a common myth about bankruptcy that many people believe. However, because every bankruptcy case is handled on an individual basis, your spouse may not have to file for bankruptcy just because you do.
Benefits of Bankruptcy
However, although your spouse is not required to file for bankruptcy if you do, sometimes a person’s spouse is in an equally trying financial situation and bankruptcy can be helpful for him or her as well. In many instances, bankruptcy can allow a person to:
- Eliminate debt
- Extend payment periods
- Reorganize finances
- Retain possession of assets
- Start over financially
Filing for bankruptcy can be a tough decision for some people, but it can also be the best option for those dealing with overwhelming debts.
When is bankruptcy a good idea?
There are many indicators that may signal that bankruptcy is right for you. Filing for bankruptcy is a big decision, but there are many who could benefit greatly from filing for bankruptcy but never take advantage of this opportunity. Knowing the truth about your own financial situation can help you to take control of your finances and decide if bankruptcy is right for you.
Some common indicators that bankruptcy may be the best solution to your financial problems include:
- Owing more money than you can pay off
- Sudden loss of job and inability to obtain another
- Increasing credit card or other debts
- Emotional distress / loss of sleep / anxiety because of debt
These can all be signs that bankruptcy may be a good idea for you and your personal situation. Filing for bankruptcy may not be easy, but it may be the best way for you to achieve financial freedom.
What property can I keep if I file for bankruptcy?
Yes, you can file a Chapter 7 bankruptcy and keep property. How much property you can keep depends on how much the property is worth, and the strategic application of “Exemptions” which are provided by law.
Exemptions are like umbrellas – they allow you to cover or protect your assets. However, you are given limited exemptions/protections. The vast majority of cases filed in Illinois would use Illinois Exemption Laws to determine what you can protect and how much you can protect. However, there can be some exceptions for recent residents to our state. We will use the exemptions to protect your property/assets.
During your free consultation, you will discuss with our attorneys (a) the status of your property/assets, (b) the value of your property/assets (not what you paid for the assets – but its current market value, trade-in value, etc.), (c) which exemption laws apply to you and (d) how to best apply the exemptions to your property. You will then be informed of what you are able to keep/protect if you file for Chapter 7.
Unlike a Chapter 7, if the repayment plan is constructed properly, a Debtor will be able to KEEP ALL his/her property!
A Chapter 13 is essentially a Court approved and monitored debt reorganization plan. There are several requirements that must be met in order for the Judge to approve the Debtor’s Chapter 13 plan. One of these requirements relates to the value of the Debtor’s property. In the event that the Debtor owns property which is not protected by the appropriate exemption law, the Debtor’s unsecured creditors must receive an amount equal to the unexempt property value during the life to the plan. All of this will be reviewed with you during your free, confidential consultation with one of our experienced bankruptcy attorneys.
What is the difference between a Chapter 7 and Chapter 13 bankruptcy?
A Chapter 7 bankruptcy is sometimes referred to as a straight liquidation or a “Fresh Start.” It can eliminate the majority of debt. There are still some debts that it does not eliminate such as student loans. And if you want to keep a house or vehicle, you must continue to make your payments.
A Chapter 13 consolidates your debt in to a more comfortable, manageable payment. The creditors receive anywhere from 10% to 100% of what they are owed, depending on different factors. It can help save your home from foreclosure, save your car from repossession, and protect assets.
Our experienced bankruptcy attorneys will help you decide which bankruptcy is going to be the best solution for your financial needs.
What is asset liquidation?
When you file for certain types of bankruptcy, you may have to contend with asset liquidation. Liquidation simply refers to the relinquishment of some or all of your financial assets in order to pay off debts. Not all assets are subject to liquidation, but some of the most commonly liquidated assets include:
- Stocks and other investments
Although it may be difficult to part with some of your belongings, liquidation can be one of the fastest ways to eliminate debt.
Will bankruptcy hurt my credit score?
More and more people are seeking bankruptcy as a financial solution. Despite the initial negative effect, it does enable you to QUICKLY REBUILD your credit and GAIN CONTROL of your finances.
Filing for bankruptcy is not an easy decision but it is often the best, most effective solution to financial difficulties.
While bankruptcy may temporarily affect your credit score, failure to act can be even more damaging. Judgments, collections, foreclosures can be just as damaging to your credit as a bankruptcy. Unlike consolidation programs, bankruptcy helps you REBUILD your credit IMMEDIATELY.
Some further benefits to bankruptcy include:
- Consolidation of debt
- Protection from creditors
- Negotiation of new repayment plan
- Elimination of some/all debt
Which form of bankruptcy is right for me?
Although bankruptcy may seem like a frightening decision, it is often the best solution to help people restructure their finances and organize their lives. Because not every debt situation is the same, there are several kinds of bankruptcy available to people who are struggling financially. For instance, bankruptcy for businesses is typically different from bankruptcy for individuals.
Some forms of bankruptcy include:
- Chapter 7 – for individuals and businesses, allows for liquidation
- Chapter 11 – for businesses
- Chapter 12 – for farmers and fishermen
- Chapter 13 – for businesses and individuals, involves creating a repayment plan
An experienced bankruptcy attorney could help you decide which form of bankruptcy is right for you and your loved ones.
What does it cost to file a bankruptcy?
There are usually just four costs associated with a bankruptcy:
- Attorney fee
- Court filing fee
- Credit counseling before filing (required by law)
- Debtor education after filing (required by law)
1. Attorney Fees
No two bankruptcy cases are alike and therefore, we do not have one flat/set payment. Because each case is unique, we offer a FREE CONSULTATON with an attorney where your financial situation will be evaluated and the attorney fees addressed. We are always FAIR and REASONABLE and strive to meet your needs.
2. Court Filing Fee
The court sets the filing fee for bankruptcy and they can change, however the current filing fees are:
- Chapter 7 – $306.00
- Chapter 13 – $281.00
3. Credit Counseling
Before a bankruptcy can be filed, Credit Counseling must be completed. It is a quick process that costs an average of $25.00 per case.
4. Debtor Education
Before you can receive your bankruptcy discharge, which tells your creditors that the case is successfully completed, you must complete Debtor Education. This is generally a two (2) hour video that costs an average of $15.00 per person.
How do I file a bankruptcy?
It all starts with calling The Law Offices of Stuart B. Handelman, P.C.. Upon receiving your telephone call, we will go through a quick question and answer session and upon concluding that conversation will be able to ascertain whether or not we can be of assistance to you or give you any bankruptcy advice. If we feel that we can help, we will invite you to schedule an appointment for a FREE BANKRUPTCY CONSULTATION. We will also ask you to provide some basic information, though our “Confidential Financial Profile”.
In your consultation we will perform a detailed analysis of your budget by evaluating your income, expenses, debt history and debt-to-income ratio, as well as whether or not you have had any previous bankruptcy filings. Upon completing that analysis, we will present you with all of your options. Often, other law firms specialize in one area of advice on bankruptcy or another. In some instances, those firms may try to fit your situation into their particular area of expertise. Because we handle all areas of debt relief, you can be assured that we will help you consider all viable options.
Upon completing your consultation, you will walk out of our office being fully informed as to what you can expect every step of the way. In order to schedule your consultation, contact The Law Offices of Stuart B. Handelman, P.C. at 312-360-0500 today.
What is Automatic Stay Protection?
Automatic Stay is a form of protection that is available to people that have filed for certain forms of bankruptcy. It goes into effect as soon as the application is complete and turned in and is intended to prevent creditors and bill collectors from pursuing/contacting the applicant. Any failure to adhere to these regulations can result in punishments by the legal system.
Can bankruptcy stop creditor harassment?
YES! After hiring our firm, when you receive calls from a collection agency or bill collector, simply advise them (a) that you are NOW REPRESENTED BY AN ATTORNEY and (b) they should call The Law Offices of Stuart B. Handelman, P.C. The result? The vast majority of creditors will NOT CONTINUE THEIR EFFORTS since they know action will soon be taken to resolve the debt. Additionally, ALL BILL COLLECTORS are PROHIBITED from contacting people represented by counsel under the Fair Debt Collection Practices Act. Any further action on their part may result in monetary damages.
- Don’t let what started as ONE collection call a day, turn into FIVE collection calls a day.
- Don’t let the calls turn into LAWSUITS, and lawsuits turn into JUDGMENTS!
- Don’t waste any more time!
STOP the harassment, the calls, the threats, the collections letters NOW – Call the lawyers at Law Offices of Stuart B. Handelman, P.C. Let us get the PROTECTION you need from your creditors and their bill collectors.
If I file for bankruptcy will I be able to avoid foreclosure?
Each bankruptcy case is unique so it is hard to know whether or not bankruptcy will help you avoid foreclosure without an examination of your financial situation. Some forms of bankruptcy will permanently protect you and your family from foreclosure, but others may not affect this risk. Chapter 7 offers temporary protection, while Chapter 13 may offer a more permanent foreclosure option through your already existing mortgage.
For more information about bankruptcy and foreclosure and to discuss your specific case, contact the Chicagoland bankruptcy attorneys at the Law Offices of Stuart B. Handelman at 312-360-0500.
Free Consultation with a Chicago Bankruptcy Law Firm
If you are interested in speaking to one of our Chicago Bankruptcy attorneys regarding your financial situation, please call us for a FREE, confidential consultation at (312) 360-0500.