Even though it is something that you probably do not want to think about or consider, you may have reached a point where it is impossible to pay your debtors. If this is true, it is an option that you may need to look into.
It may help to have a clear understanding of what bankruptcy is. Bankruptcy is defined as, “a legally declared inability or impairment of ability of an individual or organization to pay its creditors.” It is legal insolvency. Bankruptcy is a legal surrender of your remaining assets into the hands of your creditors.
In the United States, bankruptcy is placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8, Clause 4), which allows Congress to enact “uniform laws on the subject of bankruptcies throughout the United States.” The Congress has enacted statute law governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. Federal law is amplified by state law in some places where Federal law fails to speak or expressly defers to state law.
Bankruptcy cases are always filed in United States Bankruptcy Court, which is an adjunct to the U.S. District Courts. However, bankruptcy cases, particularly with respect to the validity of exemptions and claims, are often dependent upon law. Because of this, it is usually not possible to generalize bankruptcy law across state lines.
For this reason, it is important for you to know the laws regarding bankruptcy of the state that you live in. If you plan on filing bankruptcy in Illinois, you need to know the laws as they relate to you in filing an Illinois bankruptcy. You will probably need the help of an Illinois bankruptcy lawyer who can help you understand how Illinois bankruptcy laws will affect your case.
Chapter 7 and Chapter 13 are the most common types of personal bankruptcy that are filed in Illinois. In chapter 7, your non-exempt property is given to a bankruptcy trustee. The trustee then liquidates your property and gives the proceeds to your unsecured creditors. In exchange for this, you are entitled to a discharge of some of your debt. In Chapter 13 bankruptcy, you keep possession and ownership of all of your assets. In exchange, you have to give some portion of your future income to repay your creditors. Usually, this is over a period of three to five years.
You will have to decide whether Chapter 7 or Chapter 13 is best for you if you file bankruptcy in Illinois. An Illinois bankruptcy lawyer can help you make this decision.
Chapter 7 is the most attractive choice if you are under a heavy burden of debt and are not able to pay it back. However, some debt is non-dischargeable. If you have this kind of debt, you may want to consider filing Chapter 13.
You may ask, “Why would anyone ever want to file Chapter 13 instead of Chapter 7?” Actually, there are several situations where Chapter 13 may be better for you than Chapter 7. For example, Chapter 13 is probably a better choice if you are behind on your mortgage or business payments, and you want to keep your property at the end of the bankruptcy process. Chapter 13 allows you to reinstate your original mortgage agreement and make up overdue payments over time.
Also, you may not have a choice. Chapter 13 is your only option if you are not eligible to file Chapter 7. You can file Chapter 7 if your income is below the median income in Illinois. If your income is above the median, you may still qualify to file Chapter 7, if you pass the “Means Test”.
The “Means Test” checks to see if you have enough income, after subtracting certain things, to repay at least a portion of your unsecured debts over a five-year repayment period. You have to file Chapter 13 if you fail the “Means Test”.
If you can file Chapter 7 bankruptcy in Illinois, you cannot take Federal exemptions. The exemptions that you can take are the state exemptions of Illinois.
An Illinois bankruptcy lawyer can tell you what your exemptions are. He or she can also explain to you the limits and amounts on these exemptions.
Choosing the right lawyer to help you with your bankruptcy filing is important. Lawyers with a general law practice and family attorneys can help you in many ways, but are they right for bankruptcy?
An Illinois lawyer who understands the bankruptcy laws in Illinois will probably be your best choice. This is what an Illinois bankruptcy lawyer does. He or she works with bankruptcy cases every day. Illinois bankruptcy lawyers know the changes and updates that happen in Illinois bankruptcy law.
Bankruptcy Home.com can help you find an Illinois bankruptcy lawyer who will help you file the right bankruptcy for you.
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