What You Should Know About Bankruptcy in Illinois

It can be difficult deciding what to do about mounting debt that you see no hope of paying. You can get relief through bankruptcy in Illinois. Bankruptcy in Ilinois is a legal process many debtors use to get discharged from debts. Bankruptcy is an ideal option if you are facing foreclosure or your creditors keep harassing you. When you are under bankruptcy code, creditors can no longer attempt collection of debts nor take legal action. However, new laws passed in 2005 have made the process more complicated. Each debtor who files must take a pre-filing credit counseling course before filing their petition and post -filing financial planning before they can get discharged. The new laws were enforced to prevent abuse of the bankruptcy code.

The first step is to decide on a kind of bankruptcy to file. You will find various types of bankruptcy for businesses and individuals. If you have few assets, you may want to attempt Chapter 7 bankruptcy which can get you discharged in under six months. Chapter 7 requires you to liquidate some of your assets and sell them through a trustee. However, new laws dictate who is eligible. The court applies a Means Test based on income comparisons for a household of your size to the state average. If your disposable wages surpass the limit, you do not qualify for Chapter 7. The court will convert your case to Chapter 13. Chapter 13 is a chance to repay creditors under a new payment plan without seriously impacting your credit. Your income must be sufficient to pay creditors. Chapter 13 is also ideal if you have co-signers on loans. Bankruptcy is on a personal basis so a co-signer could still be held responsible for paying off the debt.

To help make the process smoother, you are advised to hire bankruptcy lawyer. A bankruptcy lawyer is familiar with the process and can guide on your eligibility for Chapter 7 or Chapter 13. There is a great amount of paperwork involved as well and a lawyer will make certain you fill them out correctly. Stop thinking of bankruptcy as a negative. After your discharge, regard it as a chance to start fresh with no debt. Browse www.lakelaw.com to know more.

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