How to File for Bankruptcy in Illinois

Nearly six people out of every thousand in the state of Illinois have filed for bankruptcy in the past year.  That is eleventh in the country in filings, making it likely that many more will face that prospect before the economy shows improvement.  How do those struggling with debt decide the right course for their financial future?

Finding a Bankruptcy Attorney

Bankruptcy is a serious option that should not be entered into lightly.  However, with the right advice from a knowledgeable bankruptcy attorney, debtors can limit that damage.  Finding a lawyer skilled in this area is important, and well worth the time to do research on the internet and with the state or local Bar Association, as well as to interview several potential advisors before choosing the right one.

Bankruptcy Options

The most common bankruptcy options are Chapter 7 and Chapter 13; however, these forms have substantial differences:

• Chapter 7 allows the debtor to discharge, or erase, most of their consumer debt; however, they may be required to liquidate some of their property or assets that are non-exempt, if they have any.  This is a good option for those with few assets.
• Chapter 13 allows the debtor to retain their property but they are also required to pay off their debt, albeit in a longer term (usually three to five years) with smaller payments.

Illinois Exemptions

For those filing Chapter 7, both the federal government and state statutes provide exemptions types of property to protect it from liquidation.  Illinois law requires filers to use only state exemptions.  Those exemptions include:

Filing the Petition

There are significant exemptions for Illinois residents, making Chapter 7 a good choice for many in financial difficulties.  Once the type of bankruptcy is determined and the consumer has concluded their debt counselling, the debtor’s lawyer files the bankruptcy petition with the court and the filer is under the jurisdiction of the bankruptcy trustee.  They will call a 341 meeting to discuss the plan and allow all creditors to ask questions.  If all the elements are in order, the bankruptcy is generally granted and the filer may complete the plan and begin restoring their credit record.