Chapter 7 Bankruptcy
Bankruptcy law gives qualifying individuals the right to obtain a complete discharge of certain kinds of debts. While other debt-relief options, such as Chapter 13, debt consolidation, or debt settlement require repayment of all or part of the debt, Chapter 7 allows the debtor with fully-exempt assets to eliminate the qualifying debt, without paying anything to the creditors.
Chapter 7 Bankruptcy Eliminates Most Types of Debts
The following types of debt can be discharged in Chapter 7:
- Credit card debt
- Personal loans
- Medical debt
- Utility bills
- Cell phone debt
- Lease obligations
- Car loan repossession deficiencies
- Mortgage loan foreclosure deficiencies
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For more information on filing for Chapter 7, contact us at (815) 788-9511.
Chapter 7 Bankruptcy Stops:
- Lawsuits
- Garnishments
- Creditor Calls
- Foreclosure
- Repossession
When you file for Bankruptcy, you will be protected by an Automatic Stay. The Automatic Stay is an injunction that provides protection from most creditors - this will typically stop wage garnishments, pause any pending lawsuits, stop the foreclosure of your home, and more. The case will move forward while this automatic stay is still in effect, allowing you to take the necessary steps to complete your case and obtain a discharge of your debt.
How the Process Works
In simple terms, the individual seeking to discharge debt in a Chapter 7 bankruptcy case will follow these steps:
- The individual provides certain financial information and records that are used to prepare the bankruptcy Petition and Schedules
- The individual completes an online credit counseling class
- The individual files a Voluntary Bankruptcy Petition with the U.S. Bankruptcy Court that contains all relevant financial information
- The creditors are provided with notification of the bankruptcy
- An injunction goes into effect (called the "automatic stay") that stops creditor collections
- The individual attends a brief hearing to verify his of her financial information under oath and to determine whether any assets will be liquidated to pay the debt
- If no objection is filed in the case, the U.S. Bankruptcy court enters an Order of Discharge
- After the court enters the Order of Discharge, the debtor is debt-free (of all dischargeable debt)
Bankruptcy Exemptions
Under the U.S. Bankruptcy Code, an individual filing for Chapter 7 is allowed to keep their assets, so long as the assets do not exceed a certain dollar amount as determined by the applicable statute. In Illinois, the state's statutory "exemptions" establish the protections available for each type of asset.
Call Our Chapter 7 Bankruptcy Lawyers at (815) 788-9511
If you believe that Chapter 7 is right for you or you have any questions and concerns for us to address, all you have to do is reach out to us. We offer free consultations at our office in Crystal Lake to allow clients like yourself to discuss your unique situation and determine what type of solution is right for you. Our goal is to determine if Chapter 7 is the right option for you and your family to seek relief from debt.
Related Reading
- Do's and Dont's Before Filing for Chapter 7
- Don't Use Credit Cards Before Filing for Chapter 7 Bankruptcy
- Can I Keep My Tax Refund if I File for Chapter 7 Bankruptcy?
Call our Crystal Lake Chapter 7 lawyers at 815-788-9511 for a free case evaluation.