Posted on 24 August 2012.
What is Chapter 7 Bankruptcy?
There are basically two types of bankruptcies. They are Re-organization and Liquidation. Chapter 7 comes under the Liquidation category. Chapter 7 allows people under bankruptcy to clear off most of their debt. Liquidation of property will be executed to pay off debts to creditors. Re-organization which is covered under Chapter 11 and Chapter 13 works on creating a better payment plan and credit terms with creditors. Chapter 7 can be used by individuals, couples, business entities or partnerships.
Things you need to know for filing Chapter 7 bankruptcy in Illinois
Major modifications regarding the eligibility criteria for Chapter 7 bankruptcy was brought by the 2005 Federal Bankruptcy Law. According to the law a person in debt is eligible for Chapter 7 bankruptcy if his income does not exceed the state?s median income. In the state ofIllinoisthe median income stands at $46,983 for a single earner. The median incomes for 2, 3 and 4 earner families inIllinoisstand at $59,794, $68,865 and $81,570 respectively. If you are resident ofIllinoisand are planning to file for Chapter 7 bankruptcy Illinois it is suggested that you avail legal assistance for a smooth execution of the process. Once you have filed for Chapter 7 bankruptcy, the court will appoint a trustee to monitor your case. You will be asked to provide a list of your debts and assets. Then a meeting will be arranged with the creditors by the trustee. Trustee will ask you questions regarding your financial status and creditors will be given the opportunity to explain their side. Although almost immediately after you file for bankruptcy, an automatic stay is issued by the court which will prevent the creditors from directly contacting you for the payment. Creditors will have to pass through the court for seeking payments.
Legal help for Chapter 7 bankruptcy in Illinois
There are several attorneys in Illinois who have expertise in Chapter 7 bankruptcy cases. The technicalities of the process are not easy to grasp and it would help if you avail their service for the case. Such attorneys can explain you all the details you should know prior to filing the case. You can continue their service if you feel that a legal assistance could make things easier. The expenses for attorney depend upon the sophistication of your case. If there are not many complications most attorneys inIllinoiswill charge only a flat fee. However the case may differ if the case is more sophisticated and require more ground work.
Certain assets are exempted from liquidation by the court. The individuals filing for Chapter 7 bankruptcy will be able to keep such exempted assets. However if you have considerable equity in your home there can be alterations in the liquidation process. The debts which are unlikely to be discharged by the court include student loans, Alimony and child support and certain other taxes. Unsecured debts like credit card payments, medical bills etc will be discharged by the court. The court also requires the debtor to complete a finance management class before he is discharged from debts.
What is Chapter 7 Bankruptcy?
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Source: http://universalfinances.com/what-is-chapter-7-bankruptcy
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