All attempts are made to provide accurate information. However, nothing contained herein should be relied upon as legal advice or legal authority. Nothing contained herein should be substituted for the advice of competent legal counsel. 

WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.  

 

WHAT CAN I KEEP?

 

            Illinois law permits each individual to keep the following property:                       

$15,000.00 in equity for a home ($30,000.00 for a Husband and Wife).
$2,400.00 in equity in one car.
$4,000.00 in miscellaneous property of your choice.
Necessary clothing.
$1,500.00 in books or tools of trade.
$15,000.00 of a personal injury claim.
Workman's compensation injury proceeds.
A federally qualified retirement or 401K plan.

            CAN I KEEP MY CAR?

 

            If you are current on the payments, you may keep the car but you must sign a "reaffirmation agreement" and possibly attend the "reaffirmation hearing" in court.  You must also be prepared to prove that the vehicle remains insured.  If the equity in your car is over $2,400.00 and you have no other exemptions left, you may have to buy the car equity back from the court. 

 

            WHAT DEBTS DO I INCLUDE?

 

            Absolutely every debt you have must be listed in the bankruptcy.  This includes debts to friends and relatives.  You must list a debt even if you object to it or you don't know how much you owe.

 

            WHO KNOWS ABOUT THE BANKRUPTCY?

 

            Although the petition is public record, only the people you owe money to receive a letter from the Bankruptcy Court.  Unless you owe money to your employer or your wages are being garnished, they do not receive a notice.

 

            HOW LONG DOES THIS TAKE?

 

            The end of the case is an "order of discharge" which the court mails to you about four to six months after you start.

           

            WHAT WILL I HAVE TO DO?

 

            Your obligations include signing and filing full and complete schedules.  My office will assist you in this process.  Next, about 14-16 days after your case is filed you will receive a letter from the court advising you to be at "the meeting of creditors."  This meeting is usually 35-45 days after you file the case.  An attorney will be with you to help you.  In Cook County, the meeting is at the AT&T Corporate Center on Monroe Street, 33rd Floor, Chicago, Ill.  In Du Page County the meeting is at the courthouse on County Farm Rd, Wheaton.  You and your spouse (if a joint petition was filed) must attend this meeting.  At the meeting, the "trustee" will ask you questions about your financial affairs.  You have an obligation to cooperate with the trustee in answering any of his or her questions.  If you have no reaffirmation agreements and if the trustee "finds no assets," you are done.

 

 

            WHO IS THE TRUSTEE AND WHY IS HE ASKING ME THESE THINGS?

 

            A "trustee" is appointed in every case to find out if there are assets which can be sold to pay the creditors.  The trustee is usually a lawyer.  You will meet the trustee at the meeting of creditors.  The trustee has the right to inspect your property and determine its value but in a "typical" case all he does is read your petition and schedules and then ask you a few questions at the meeting.  He will typically ask: do you or have you owned any real estate; have you made any substantial or unusual gifts; how did you determine the value of your assets; have you listed all of your debts and assets and do you have any personal injury cases pending.

 

            SECURED CREDITORS

 

            A secured creditor is someone to whom you have given or pledged your property to assure that you will pay the bill.  A typical example is an auto loan.  You generally give your car title as security for your promise to make your payments.  Your options are limited to:

 

  1. Discharge the debt and return the property (i.e., give back the car or T.V.)

  2. Reaffirm the debt and continue to pay as before the bankruptcy (you must be current on your payments).

  3. Pay the "replacement cost" of the property of similar age and condition in cash up front and receive your title back.

  4. Sometimes you can negotiate a combination of the three prior options, but this depends entirely upon my successful negotiations with the creditor.

 

            HOW LONG WILL MY CREDIT BE BAD?

 

            There is no good answer to this question.  Whether any company will, in the future, extend credit to you depends upon their evaluation of you at that time.  Federal law allows a credit reporting agency to keep the record of your bankruptcy for 10 years.  Bankruptcy provides a fresh start so that you can pay your bills when due.  Improper entries on your credit report may be removed upon the submission of a proper request.  To repair your credit report, you may at any time contact the credit reporting agencies and ask for the procedures to remove incorrect information.  They are: Equifax (800-685-1111), Trans Union (312-408-1050) and TRW (800-682-7654).  Additional assistance my be available from my office after the bankruptcy is completed.

 

            SHOULD MY SPOUSE FILE ALSO?

 

            Illinois law provides that your spouse may be liable for bills which were incurred to provide necessities for the home.  This would include food, clothing, furniture and medical care.  However, there is no requirement that your spouse file.

 

            CAN I PAY SOMEONE AFTER I FILE BANKRUPTCY

 

            You have an absolute right to pay someone after you have filed the bankruptcy petition.  Payments before the filing may be considered an unlawful preference of one creditor over another and the trustee can get the money back from the creditor.

 

            CAN I GET RID OF MY STUDENT LOANS?

 

            Student loans must be paid even though you have filed bankruptcy unless there is extreme hardship (no money for food).  The law permitting discharge after seven years was revoked in 1998.

 

            WHAT HAPPENS TO MY I.R.S. DEBT?

 

            Some income tax obligations may be discharged in bankruptcy.  In the event that the obligation was disclosed on your 1040 tax return, and if more than three years have passed since the filing of the return, then that debt may be dischargeable.

 

            WHAT ARE THE IMPORTANT RECORDS?

 

            Make sure that you keep in your permanent records 1) The Petition and Schedules, 2) The Notice of Meeting of Creditors and 3) The Discharge of Debtor.  I guarantee you will need these documents when you apply for credit in the future.

 

            CAN I TRANSFER MY ASSETS TO MY FRIENDS AND FAMILY?

 

            No! No! and No!  One of the easiest tasks for the trustee is to reverse a fraudulent transfer to friends and family.  A trustee can go back FOUR YEARS to reverse a transaction which violates the laws pertaining to fraud on creditors.

 

            CAN I PAY MY FAVORITE CREDITOR?

 

            The trustee can reverse a "Preference" of one creditor over another. The fundamental principle of bankruptcy is fairness among creditors.  Any payment to friends or family, made within one year of Bankruptcy, can be reversed.