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Frequently Asked Questions About Bankruptcy in Illinois
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How do I know if I should file for bankruptcy in Illinois?
If you are unsure whether you should file or not then you should speak to an attorney who can provide you with accurate information that will help you decide.
What debts are dischargeable under Chapter 7 bankruptcy and what are not?
The following is a list of debts that are dischargeable under Chapter 7:
- Credit cards
- Leases
- Personal loans
- Auto accident claims
- Repossession deficiencies
- Judgments
- Guaranties
- Business debts
- Negligence claims
The following is a list of debts that are not dischargeable under Chapter 7:
- Trust fund taxes
- Recent taxes
- Child or family support
- Auto accident claims involving intoxication
- Penalties payable to the government other than tax
- Criminal fine or restitution
- Debts not scheduled
- Student loans
- Debts listed in prior bankruptcy where debtor has been denied a discharge
- Debts incurred by fraud or intentional wrongdoing
What debts are dischargeable under Chapter 13?
Most debts in Chapter 13 filing are dischargeable. Drunk driving judgments, family support, student loans and fines are not dischargeable. Debts incurred by fraud or intentional wrongdoing may be discharged if the debtor can demonstrate the plan is proposed in "good faith."
Is all credit card debt dischargeable when filing a bankruptcy in Illinois?
Credit card debt may be non-dischargeable when:
- The application submitted to get the card was fraudulent.
- The care was used fraudulently (11 U.S.C. 523(a)(2)).
Will bankruptcy allow me to clear all my debts?
No. In most cases bankruptcy allows you to clear most debt, but not all. The following is a list of debts that it generally will not wipe out:
- Debts not listed on the bankruptcy petition
- Student loans
- Money owed for child support or alimony
- Fines
- Some taxes
- Loans obtained by giving false information to a creditor who then reasonably relied on that information to give you a loan
- Drunk driving damages
How does bankruptcy affect my credit?
This is a difficult question to answer. If you plan on filing bankruptcy it is probably safe to say that you credit is already bad or damaged because you have not been able to pay bills. In many cases bankruptcy is helpful because it will allow you to get back into shape financially by paying current and new bills, therefore making it possible to get new credit. In this situation bankruptcy will not make things any worse.
Do I have to go to court to file for bankruptcy?
Generally, you only have to go to court once for a "meeting of creditors." This is a proceeding in which you meet with the bankruptcy trustee and any creditors that appear. You will be asked simple questions regarding your bankruptcy forms and your financial situation. Additional hearings may be necessary, but only if complications arise. Your Illinois bankruptcy Lawyer should be able to handle most of the process for you.
Is an attorney necessary if I decide to file for bankruptcy?
Although an attorney is not required, this process is complicated and a mistake may lead to a loss of property or a loss of other rights.
What is an automatic stay?
An automatic stay is a provision that prevents creditors from making direct contact with you or staking a claim on any of your property from the day of filing forward. An automatic stay goes into effect once you have filed with the bankruptcy court.
What is a bankruptcy trustee?
The court will appoint a trustee to your case to see that your creditors are paid as much as possible. The court assumes legal control of your debts and property not covered by your Illinois exemptions.
What is a "341 meeting of creditors"?
This is a meeting in which you must attend. You will meet with the bankruptcy trustee and any creditors that chose to attend. In most Chapter 7 cases, the creditors do not attend; sometimes creditors will attend a meeting for a Chapter 13 case. This meeting allows the parties to resolve any objections between you and the creditors. A judge will intervene if a resolution is not reached.
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