How to File Bankruptcy in Illinois for Free
Full Answer
But if you have no money, you can ask for a fee waiver (in Chapter 7 cases) or ask the bankruptcy judge to roll the payment in your repayment plan (in Chapter 13 cases). While in some cases you can file bankruptcy without a lawyer, there are exceptions, depending on the type of bankruptcy. Some examples include:
The truly hard part of getting ready to file a Chapter 7 bankruptcy in Illinois is now done, and your bankruptcy forms are ready to be submitted to the bankruptcy court. If you hired a lawyer, they’ll print all the forms and go over everything with you, getting your signature where necessary, then turn around and file the case electronically.
Everyone who wants to take advantage of the protections the bankruptcy code offers by filing bankruptcy in Illinois has to first complete a credit counseling class. In fact, without completing this class first, you are not eligible to be a debtor in any bankruptcy case.
If you’re unable to pay the fee, whether that's in full at one time, or at all, you can still file for bankruptcy protection. If your income is less than 150% of the federal poverty guidelines, and you don’t make enough to cover your basic expenses, the Illinois Bankruptcy Court may waive your filing fee.
If you're not or your case is complicated, then an attorney might be well worth the money. Attorney fees are usually the biggest expense of filing bankruptcy, but they're not usually necessary for a simple Chapter 7 (a “liquidation” or “straight” bankruptcy) case.
Filing for bankruptcy in Illinois costs $299 for a Chapter 7, or liquidation, bankruptcy, and $274 for a Chapter 13, or reorganization, bankruptcy. However, federal law does provide that the Chapter 7 filing fee may be waived if your household meets certain income limits prescribed by the federal government.
In a Chapter 13 bankruptcy, you must pay your creditors in full if you can. If that is not possible, you must pay all of your disposable income for 3-5 years. Disposable income is the income left over after paying necessary living expenses. Once the repayment plan is completed, you will get a discharge of your debts.
If you live in a three-person household and your income is below $91,581, you qualify for Chapter 7 bankruptcy in Illinois. If your household income is above the state median, you can still qualify for Chapter 7 bankruptcy based on your disposable income.
Again, there's no minimum or maximum amount of unsecured debt required to file Chapter 7 bankruptcy. In fact, your amount of debt doesn't affect your eligibility at all. You can file as long as you pass the means test. One thing that does matter is when you incurred your unsecured debt.
Most people prefer Chapter 7 bankruptcy because, unlike Chapter 13 bankruptcy, it doesn't require you to repay a portion of your debt to creditors. In Chapter 13 bankruptcy, you must pay all of your disposable income—the amount remaining after allowed monthly expenses—to your creditors for three to five years.
After you file for bankruptcy protection, your creditors can't call you, or try to collect payment from you for medical bills, credit card debts, personal loans, unsecured debts, or other types of debt.
You can exempt the following personal property: necessary wearing apparel; bible and school books; family pictures; professionally prescribed health aids; a certificate of title to any watercraft over 12 feet in length; prepaid tuition trust fund; Illinois College Savings Pool accounts invested more than one year ...
Cons of Chapter 7Income Limit. If your individual or business income is higher than a specified amount, you shall not qualify for Chapter 7. ... Bad Credit Score. No matter what kind of bankruptcy you file, your credit score will suffer. ... Asset Liquidation. ... Unwanted Publicity. ... Non-dischargeable Debts.
Look at Your Disposable Income If your disposable income after expenses is less than $128, you qualify for Chapter 7 under the means test. If it's more than $214, you do not qualify.
With Chapter 7, those types of debts are wiped out with your filing's court approval, which can take a few months. Under Chapter 13, you need to continue making payments on those balances throughout your court-instructed repayment plan; afterwards, the unsecured debts may be discharged.
There are certain protected things that a creditor cannot take, such as:Necessary clothing.Income from: ... Take home pay up to $540 per week after all state and federal taxes have been taken out.$15,000 worth of equity in the home you live in (including a mobile home or condominium). ... A vehicle (car, truck, van, etc.)More items...
Debtors must list all property and debts in their bankruptcy schedules. If a debt is not listed, it is possible the debt will not be discharged.
For example, a debtor whose case is dismissed for failure to file a required document, such as a credit counseling certificate, may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay.
Corporations and partnerships must have an attorney to file a bankruptcy case. Individuals, however, may represent themselves in bankruptcy court. While individuals can file a bankruptcy case without an attorney or " pro se ," it is extremely difficult to do it successfully.
Please be aware that bankruptcy fraud is a crime. Pro se litigants, whether debtor or creditor, are expected to follow the rules that govern procedures in the federal courts. Pro se litigants should be familiar with the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the local rules of the court .
Failure to do so may result in dismissal of the case, or other sanctions. It is always best to seek legal advice and representation from an attorney experienced in bankruptcy law and procedure.
Bankruptcy can be complicated. The staff of the U.S. Bankruptcy Court Clerk's office provides a variety of services; however, they are not permitted to assist with the preparation of the voluntary petition, schedules, or other documents, nor can they provide legal advice. All parties must comply with the U.S. Bankruptcy Code, and the Federal Rules of Bankruptcy Procedure. Failure to do so may result in dismissal of the case, or other sanctions. It is always best to seek legal advice and representation from an attorney experienced in bankruptcy law and procedure.
If not, your bankruptcy case may be dismissed. Bankruptcy fraud is a felony under federal criminal law and may result in arrest, fine or imprisonment. General information about bankruptcy for debtors not represented by an attorney may be found in our Pro Se Debtor Guide (see the link on the left).
The process begins with deciding what type of bankruptcy you want to file: Chapter 7 or Chapter 13. Chapter 7 bankruptcy is used to discharge debts, whereas Chapter 13 bankruptcy is a debt reorganization plan.
Alternatively, individuals may legally file bankruptcy without being represented by a bankruptcy attorney. However, you will be hard-pressed to find anyone, attorney or not, that will recommend undertaking such a complicated legal endeavor without an attorney.
The primary problem with filing without a bankruptcy attorney is that the courts offer no for giveness for mistakes, even if they are seemingly small and technical mistakes.
These debts include debts for money or property obtained by false pretenses and debts for willful and malicious injury by the debtor to another entity or to the property of another entity. If the bankruptcy judge grants the creditor's request, the debt owed to that creditor will not be discharged.
For individuals, there are two main types of bankruptcies that can be filed: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 cases are also referred to as "liquidation" cases, while Chapter 13 cases are commonly referred to as "debt adjustment" or "wage earner" cases. Individuals may also be eligible for a Chapter 11 bankruptcy, ...
When you file for Chapter 7 liquidation, the petition operates as an automatic stay, which generally prevents creditors from pursuing debt collection actions against you unless the bankruptcy judge approves it first.
In order to be eligible for a Chapter 7 case, you must receive credit counseling from an approved agency within 180 days prior to filing. When you file, you are required to provide the court with a certificate from the agency describing the services you received along with a copy ...
Each individual who files a bankruptcy is entitled to keep any property that qualifies for an exemption under either federal or Illinois law. For some types of property, such as family pictures, necessary wearing apparel, worker compensation benefits, qualified retirement plans, IRAs, and life insurance, the value and amount of property an individual can claim as exempt is unlimited. In other cases, however, the equity an individual can claim as exempt is limited by a fixed dollar amount. Common examples of such exemptions include: 1 Your personal residence (equity of $15,000, or $30,000 for spouses filing jointly); 2 Compensation for personal injury claims ($15,000); 3 Motor vehicle (equity of $2,400 for each individual owner); 4 Tools or books used in your occupation ($1,500).
A bankruptcy can remain on your credit report for up to 10 years, but many people are able to raise their credit score to a relatively good level within a few years after bankruptcy.
Illinois law also gives each individual the right to exempt up to $4,000 in equity for any other personal property, including cash or money in the bank. If a husband and wife file jointly for bankruptcy, each spouse is entitled to claim these exemptions as well.
The bankruptcy process may be simple enough to handle on your own if the following are met: 1 You own few assets 2 Your household income is below your state's median 3 You haven't been accused of fraud
In general, you need to at least pay a filing fee and the credit counseling and financial management course fees to finalize your bankruptcy petition. But if you have no money, you can ask for a fee waiver (in Chapter 7 cases) or ask the bankruptcy judge to roll the payment in your repayment plan (in Chapter 13 cases).
Even though your case is relatively uncomplicated, a bankruptcy case requires you to fill out extensive paperwork and have a good knowledge of the Bankruptcy Code. Thus, it may be in your best interest to at least have an initial consultation with an attorney to make sure you are on the right course.
You'll have to attend your “ Meeting of Creditors " on the scheduled date. Although your creditors won't actually be present , the trustee will be and will ask you a number of standard questions about your case. Be sure to answer truthfully and accurately.
Yes, you can legally file for bankruptcy without a lawyer. But should you? Every year, thousands of Americans find themselves too broke to pay off their debts, yet unable to afford bankruptcy. It probably comes as no surprise that attorneys' fees make up the lion's share of bankruptcy expenses.
The following is a list of ways your lawyer can help you with your case. Advise you on whether to file a bankruptcy petition. Advise you under which chapter to file. Advise you on whether your debts can be discharged. Advise you on whether or not you will be able to keep your home, car, or other property after you file.
Non-attorney Petition Preparers. If you file bankruptcy pro se, you may be offered services by non-attorney petition preparers. By law, preparers can only enter information into forms. They are prohibited from providing legal advice, explaining answers to legal questions, or assisting you in bankruptcy court.
Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues. Misunderstandings of the law or making mistakes in the process can affect your rights. Court employees and bankruptcy judges are prohibited by law from offering legal advice.
Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes. Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues.