Illinois Bankruptcy & Debt Relief Attorneys
Chicago Bankruptcy Lawyers
You may be struggling to pay your debts. You may be falling further behind ina your payments. You may be considering filing for bankruptcy in order to resolve your debt problems. At Loop Bankruptcy, a service of Lakelaw, our experienced Chicago bankruptcy attorneys understand the confusion and stress that you may be experiencing. Contact our Chicago bankruptcy lawyers now to schedule a Free Consultation and we can explain your options to you. Should you choose to file for bankruptcy, we can assist you through the entire process and help you emerge from bankruptcy in the right financial direction.
I.Can I file Chapter 7 bankruptcy?
In order to be eligible for a Chapter 7 bankruptcy, you cannot have filed a Chapter 7 bankruptcy within the previous eight years or a Chapter 13 bankruptcy within the previous six years. In a Chapter 7 bankruptcy, your assets are subject to liquidation unless they are exempted. If you have assets that you are unable to exempt and do not want to liquidate, then Chapter 13 bankruptcy may be a better alternative.
II.Can I file Chapter 13 bankruptcy?
In order to receive a Chapter 13 bankruptcy discharge, you cannot have filed a Chapter 7 bankruptcy within the previous four years or a Chapter 13 bankruptcy within the previous two years. You also must have regular income in order to propose a repayment plan and must owe less than $1,081,400 in secured debt and less than $360,475 in unsecured debt.
III.Which should I file – Chapter 7 or Chapter 13 bankruptcy?
For both Chapter 7 and Chapter 13, a means test must be completed to determine whether or not you have the ability to repay your debts. Under the means test, you first determine whether your annual gross income is above or below the limit: $45,607 for an individual, $59,104 for a household of 2, $68,782 for a family of three, and $79,788 for a family of four (with an additional $7,500 for each individual in excess of four). If your annual gross income is below the applicable income limit, then you are eligible to file Chapter 7 bankruptcy. If your annual gross income is above income limits, then further analysis is necessary.
The second part of the analysis involves an adjustment to your annual gross income for necessary expenses, secured debt obligations, deductions from wages for taxes, social security or other mandatory payroll deductions.
If, after all applicable deductions are made, your disposable income is negative, you are eligible for Chapter 7 bankruptcy based on the means test analysis. Regardless of amount of disposable income determined by the means test, the U.S. Trustee will consider the totality of the circumstances when determining your ability to repay unsecured debts. If the means test shows disposable income, then a Chapter 13 repayment plan must be proposed.
IV.What else should I consider before filing bankruptcy?
Under the U.S. Bankruptcy Code, payments to any one creditor that total more than $600 and that are made within 90 days of the bankruptcy filing can be recalled by the trustee. You should not incur any additional debt within that 90-day period. Luxury purchases made within 90 days of a bankruptcy filing are presumed fraudulent and non-dischargeable. Additionally, there is a 70-day look-back period for cash advances in excess of $875 from any single creditor.
Do not transfer property in anticipation of filing bankruptcy for less than market value, it may be considered a fraudulent transfer and the trustee may repossess the property.You should stop paying family members up to one year before filing bankruptcy or the trustee will demand the family member return the payment(s) received. You must list all debts owed on the day of filing. You cannot exclude debts from bankruptcy.
Do not cash out an IRA or 401(k) account because they are considered protected assets that the trustee cannot liquidate in the bankruptcy court and creditors cannot liquidate in state court collection actions.
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