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Chapter 7

Chicago Chapter 7 Bankruptcy Lawyer

Experienced Legal Counsel for Debt Relief Solutions in Illinois

In the face of crushing debt and creditor harassment, it is easy to think you have no options. Fortunately, nothing could be further from the truth. Federal bankruptcy law allows debtors like you to file for bankruptcy to get a fresh start. By taking the proper steps and contacting a bankruptcy lawyer, you could have your debts discharged through bankruptcy.

Attorney Joseph P. Doyle is an expert in bankruptcy law in Chicago, providing a wide range of legal services to clients in the city and the surrounding areas. He can thoroughly assess your financial situation, determine your options to eliminate or reduce your debt, and help you get a clean slate and get your life back on track.

Having a Chicago Chapter 7 attorney with a thorough knowledge of bankruptcy law to help you determine your best option for debt relief is essential. With our bankruptcy law experts in Chicago, you can benefit from time-tested advice and dedicated counsel.

Call Attorney Joseph P. Doyle at (312) 957-8077 or contact us online to schedule a meeting with our Chapter 7 bankruptcy attorney in Chicago! Se habla Español.

Who Qualifies for Chapter 7 Bankruptcy?

To file for Chapter 7 bankruptcy, you must pass the means test, a legal calculation that examines your income and expenses to determine eligibility. If your income falls below the Illinois median income for a household of your size, you may qualify for Chapter 7. Attorney Doyle will guide you through the means test and help you understand whether Chapter 7 bankruptcy is the right option based on your unique financial situation.

What Happens When You File Chapter 7?

Filing under Chapter 7 of the bankruptcy code is a way to obtain immediate debt relief and regain financial stability with a fresh start. The Chapter 7 process involves liquidation and discharge of any remaining debts. It is a viable solution for many individuals who cannot escape their troubling financial situation.

When you file for Chapter 7 in Illinois, you eliminate your legal obligation to pay unsecured dischargeable debt and some secured debts.

How Does Chapter 7 Bankruptcy Work?

Think of a Chapter 7 bankruptcy as a fresh start. In this type of filing, all of your debt is listed on the schedules of your bankruptcy petition. There is a schedule for secured debts, like your house and car, and a schedule for your unsecured debts, like medical bills and credit cards. If the case is successful, these unsecured debts are all discharged in the Chapter 7 bankruptcy, which makes this type of filing a fresh start. Secured property can also become an unsecured debt and thus be discharged in Chapter 7 bankruptcy if repossessed or foreclosed upon. All that remains is a deficiency balance or if the client decides they would like to surrender their interest in the secured property ahead of time.

Since a Chapter 7 bankruptcy is a liquidation of your assets, there is also a schedule for listing all of your assets. This includes anything from bank accounts to life insurance policies, cars, and other significant assets. Most of the time, these assets can be exempt; thus, there will never be any issues with the case. However, it is still vital to your case to consult with your attorney to ensure that your assets are properly shielded from the liquidation that occurs in every Chapter 7 case.

Finally, an individual can only receive a discharge in a Chapter 7 case every eight years. If you need bankruptcy protection and are ineligible for a Chapter 7 due to this rule, there are other options for you, such as a Chapter 13 bankruptcy. In this case, consult an expert in Chapter 7 attorney in Chicago to decide the best course of action your situation requires.

What Happens Next?

After you have completed bankruptcy and debts have been discharged, you may no longer be liable for those discharged debts. Sometimes, debtors can reaffirm secured debts to reinstate their previous legal obligation. For example, they may be able to reinstate a prior mortgage, making regular payments as they stay in the house. Some types of debt, however, cannot be discharged. Our Chapter 7 Bankruptcy attorney in Chicago.

Classic examples include:

Are There Disadvantages to Chapter 7?

Chapter 7 bankruptcy provides debt relief for many, but it also has its drawbacks. One significant disadvantage is the potential loss of assets. When you file for Chapter 7, a trustee may liquidate non-exempt property to pay off creditors. This could mean losing valuable possessions or even your home if you have substantial equity.

Additionally, Chapter 7 remains on your credit report for ten years, affecting your ability to secure credit or loans. It can make it challenging to get new credit cards or loans, and if you do, they may come with high interest rates.

Furthermore, not all debts are dischargeable through Chapter 7. Non-dischargeable debts like student loans, child support, and certain tax debts will remain your responsibility.

Lastly, the process can be relatively quick, with your case typically taking a few months to complete. However, it's essential to remember that not all debts can be discharged. Therefore, it's essential to consult with a Chapter 7 attorney in Chicago to determine if Chapter 7 is the right choice for your financial situation.

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Contact our team to learn more about Chapter 7. Speak with a skilled bankruptcy attorney in Chicago at Attorney Joseph P. Doyle. Our services are available in Spanish.

Understanding Chapter 7 Bankruptcy

Helpful Insight from Our Chicago Chapter 7 Bankruptcy Attorney

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a legal process that allows individuals and businesses to eliminate most of their unsecured debts. This can provide a fresh start for those overwhelmed by debt and struggling to make ends meet. Like all financial (and legal) matters, however, understanding Chapter 7 can be difficult. 

That's why we've highlighted a few key aspects of the Chapter 7 bankruptcy process:

The "Automatic Stay" 
Once you file for Chapter 7 bankruptcy, an automatic stay goes into effect immediately. This legal provision halts most creditor collection actions, providing you with temporary relief from wage garnishment, foreclosure, repossession, and incessant collection calls. The automatic stay is designed to give you breathing room to reorganize your finances and focus on your bankruptcy proceedings without the constant pressure from creditors.

Debt Discharge
One of the most significant benefits of Chapter 7 bankruptcy is the potential discharge of qualifying debts. This means that upon the successful completion of your bankruptcy case, you are no longer legally obligated to repay certain unsecured debts, such as credit card balances, medical bills, and personal loans. Debt discharge can provide a fresh financial start, allowing you to rebuild your credit and future without the burden of overwhelming debt.

The Means Test 
To qualify for Chapter 7 bankruptcy, you must pass a means test. This test evaluates your income and expenses to determine if your financial situation meets the criteria for Chapter 7 relief. The means test compares your average monthly income over the past six months to the median income for a similar household in your state. If your income is below the median, you generally qualify. If it is above, you may need to provide additional information to prove that your disposable income is insufficient to repay your debts, potentially leading to eligibility for Chapter 13 instead.

Exempt Property 
In Chapter 7 bankruptcy, not all your assets are subject to liquidation. Certain properties are deemed exempt, meaning you can retain them even as you undergo the bankruptcy process. Exemptions typically include your primary residence (up to a specific value), retirement accounts, necessary personal belongings, and in some cases, a vehicle. These exemptions are designed to ensure that you have the essential means to live and work while seeking debt relief. Understanding which assets are exempt can help you better prepare for the bankruptcy process and safeguard your most important possessions.

If you are considering filing for bankruptcy, there is much to understand. Having a seasoned Chicago Chapter 7 bankruptcy lawyer to explain your rights, outline your options, and protect your interests through the entire process can make all the difference in your peace of mind and financial security. Bankruptcy is a powerful tool, but it must be used correctly if you are to reap the many advantages it has to offer.

Will I Lose My Property If I File?

Chapter 7 bankruptcy in Chicago involves liquidating a debtor's nonexempt assets. In this situation, the trustee will take possession of the debtor's property and liquidate any unprotected assets. During this process, the assets will be sold, and funds will be paid to creditors. Under the bankruptcy code, the debtor can retain certain basic assets, exempt property.

Below are properties that might be exempt from bankruptcy:

  • Whole Life Insurance
  • Personal Injury Payment
  • Wild Card
  • Homestead
  • Motor Vehicle
  • Pensions and Qualified Retirement Plans
  • Alimony and Child Support
  • Social Security, Unemployment, and Public Assistance
  • Workers' Compensation
  • Illinois College Savings Pool Accounts
  • Certain Personal Items (Clothing, School Books, Family Photos)

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Stop Creditor Harassment and Protect Your Assets

Filing for Chapter 7 bankruptcy can provide you with immediate relief from creditor harassment. Once you file, an automatic stay is put in place, preventing creditors from contacting you, garnishing your wages, or repossessing your property. This allows you to regain control of your finances and focus on rebuilding your future.

Our experienced bankruptcy attorney, Joseph P. Doyle, can guide you through the process and help you understand which assets you can keep.

Benefits of Chapter 7 bankruptcy:

  • Debt Discharge: Chapter 7 can eliminate most unsecured debts, including credit card bills, medical expenses, and personal loans, freeing you from the burden of repayment.
  • Automatic Stay: Filing for bankruptcy triggers an automatic stay, which immediately halts collection activities such as wage garnishments, lawsuits, and creditor harassment.
  • No Repayment Plan: Unlike Chapter 13 bankruptcy, Chapter 7 does not involve a repayment plan, making it a quicker solution for debt relief.
  • Protect Essential Assets: Illinois law provides exemptions for essential assets, allowing you to protect items such as your home, vehicle, retirement accounts, and more.

The Cons of a Chapter 7 Bankruptcy

You cannot keep your credit cards, and you will lose property not exempt from sale by the trustee, in addition to other luxury items that were not exempt.

If you declare bankruptcy now, it will be harder to declare it later if you find yourself in an even worse financial situation. Make sure that filing for a Chapter 7 bankruptcy is necessary. Once you file a Chapter 7 bankruptcy, you cannot file again under that chapter for another eight years.

If you previously filed a Chapter 13 bankruptcy and less than 70% of your unsecured debt was paid to creditors in good faith, you must wait six years before filing a Chapter 7 bankruptcy.

What Type of Debt Relief Is for Me?

There is only one way to know whether or not filing for bankruptcy is the right choice for you: to discuss your options with a Chicago bankruptcy attorney to understand the benefits and disadvantages of each fully. If you initiate the Chapter 7 bankruptcy process blindly, you could be in trouble later. At our firm, we fully understand the scope of bankruptcy law and can even dispel some common bankruptcy myths you may have heard.

Chapter 7 Vs Chapter 13 Bankruptcy

Chapter 7 and Chapter 13 bankruptcy serve different financial needs and offer distinct advantages based on an individual’s situation. Chapter 7, often called “liquidation bankruptcy,” is ideal for those with low income and primarily unsecured debt, as it quickly discharges most debts within a few months but may involve selling non-exempt assets to repay creditors. In contrast, Chapter 13, known as “reorganization bankruptcy,” allows individuals with regular income to retain their assets by creating a 3- to 5-year repayment plan to address overdue debts gradually. While Chapter 7 remains on a credit report for 10 years, Chapter 13 only remains for 7 years and can be beneficial for people who are behind on secured debts like mortgages but want to keep their property. Both options offer an automatic stay, which stops collection actions, providing immediate relief to those facing financial distress.

Life After Chapter 7 Bankruptcy

Many people fear the long-term consequences of bankruptcy, but filing for Chapter 7 often serves as a financial reset. Attorney Doyle provides post-bankruptcy guidance to help you rebuild credit, manage finances, and avoid common pitfalls, empowering you to regain financial stability. With dedication and careful financial management, many clients find that they can significantly improve their credit within a few years after filing.

Contact Attorney Joseph P. Doyle today to schedule a consultation with our Chapter 7 bankruptcy lawyer in Chicago!

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Chapter 7 Bankruptcy FAQ

1. How much does it cost to file for Chapter 7 bankruptcy?
The cost of Chapter 7 bankruptcy includes court fees and attorney fees, which vary based on the complexity of your case. Attorney Doyle offers a free consultation to discuss costs, and we provide transparent pricing with flexible payment plans.

2. How soon can I rebuild my credit after Chapter 7?
Many people start rebuilding their credit shortly after bankruptcy by securing a low-limit credit card or installment loan. With responsible credit use and on-time payments, it’s possible to see improvements in your credit score within a year or two.

3. Can both my spouse and I file for Chapter 7 jointly?
Yes, married couples can file for Chapter 7 bankruptcy jointly. Filing jointly may simplify the process, but it’s important to assess whether joint filing is beneficial. We can advise you on the advantages and potential considerations of filing jointly or separately.

4. Will Chapter 7 bankruptcy affect my employment?
Bankruptcy is a legal right and should not directly impact your current employment. In most cases, employers are not notified unless your wages are garnished. Additionally, federal law prohibits employers from firing employees solely due to bankruptcy.

Why We Are Prepared to Help You

  • We Can Help to Eliminate Your Debt
    We strongly believe in providing clients with accessible and honest advice throughout the entire bankruptcy process.
  • We Can Protect Your Consumer Rights
    We are dedicated to protecting you from debt collection, telemarketer abuse, unfair auto financing, and student loan debt.
  • We Can Help End Wage Garnishment
    We can help put a stop to collector calls, garnished wages, and frozen bank accounts to move to a stronger future.
  • We Can Put a Stop to Creditor Harassment
    When you hire us to handle your lender negotiations or bankruptcy, debt collectors can no longer contact you.