Chapter 7 Bankruptcy
Chapter 7 Chicago and Northwest Suburbs Bankruptcy Attorney
Chapter 7 Bankruptcy, also called “liquidation”, is the most common type of bankruptcy relief for individuals. The appeal of Chapter 7 Bankruptcy is that, if you qualify for it, all or almost all of your debt will be discharged while you get to keep all or almost all of your assets through applying the appropriate Illinois exemptions. In order to qualify for bankruptcy under Chapter 7, you must pass the so-called “Means Test”. The test applies only to individuals and only to those individuals whose debt is primarily consumer debt. In essence, the means test is comparing the debtor's average income for the past six months to the median income for households of the same size in Illinois. If the debtor's income is less than or equal to the Illinois median income, the debtor "passes" the means test and may file Chapter 7. However, even if the debtor’s income is higher than the state median, the debtor may still qualify to file for Chapter 7. If a debtor does not qualify for Chapter 7 bankruptcy filing, the debtor usually considers filing under Chapter 13.
Once the petition for bankruptcy is filed, all collection activities against you including harassing creditor calls, lawsuits, and wage garnishment will stop immediately. Upon the successful conclusion of your Chapter 7 bankruptcy case, your debts will be “discharged.” This means that you will no longer owe creditors and that they cannot pursue any legal action or otherwise attempt to collect the debts from you. Not all debt is eligible to be discharged, such as alimony, child support, student loans, fines for penalties or criminal offenses, and some taxes.
Chapter 7 bankruptcy may eliminate most kind of unsecured debt like credit card debt, medical bills, personal loans, and judgments. However, secured loans, such as for your home and car, survive Chapter 7 bankruptcy and you must keep making the payments. Alternatively, if you cannot afford to make the payments on secured debts, you can surrender the property to the lender and discharge the debt.
At the Law Offices of Paul T. Marinoff, Ltd. we will determine whether you are Chapter 7 eligible, the applicable exemptions in your case and whether your debts are dischargeable through Chapter 7. We will ensure that any and all assets that can be protected are protected.
If you are considering Chapter 7 bankruptcy, contact Law Offices of Paul T. Marinoff, Ltd. for a consultation today.