What are my options if I want to file for bankruptcy in Illinois?
By
If you are considering filing for bankruptcy in Illinois, you have several options available to you. The two most common types of bankruptcy are Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 bankruptcy:
Chapter 7 bankruptcy is also known as a “liquidation” bankruptcy. In this type of bankruptcy, all non-exempt assets will be liquidated, and the proceeds will be used to pay your creditors. However, some types of property are exempt from liquidation, such as your primary residence, personal property, retirement accounts, and some types of insurance policies.
To file for Chapter 7 bankruptcy in Illinois, you must meet certain eligibility requirements, such as passing a means test that compares your income to the median household income in Illinois. Additionally, you will need to complete mandatory credit counseling before you can file for Chapter 7 bankruptcy.
Chapter 13 bankruptcy:
Chapter 13 bankruptcy is also known as a “reorganization” bankruptcy. In this type of bankruptcy, you will create a repayment plan to pay off your debts over a period of three to five years. Your monthly payments will be based on your disposable income, which is the amount of money you have left over after paying for your necessary living expenses.
To file for Chapter 13 bankruptcy in Illinois, you must meet certain eligibility requirements, such as having a regular source of income and having unsecured debts that are less than $394,725 and secured debts that are less than $1,184,200.
Other options:
In addition to Chapter 7 and Chapter 13 bankruptcy, there are other options available to you, such as debt consolidation, debt management plans, and debt settlement. These options do not involve filing for bankruptcy and may be a better choice for some individuals.
It is important to note that bankruptcy has long-term consequences and should not be taken lightly. Bankruptcy can remain on your credit report for up to 10 years and can make it difficult to obtain credit, such as loans or credit cards, in the future. It is recommended that you speak with a licensed bankruptcy attorney before making any decisions about filing for bankruptcy. An attorney can help you determine which type of bankruptcy is right for your situation and can help you navigate the complex legal process.
