State Laws

Illinois Bankruptcy

     

Illinois Bankruptcy
Bankruptcy allows those who cannot pay their bills to have a clean slate and do it legally. Federal law provides individuals with the right to file for bankruptcy, and subsequently the federal court handles all bankruptcy issues. It is advised to file for bankruptcy as soon as possible to halt creditors who are seeking debts and to allow the law to help find a credit solution.

Bankruptcy in Illinois can take away any financial obligations of paying all or most of pending debts. This form of assistance is named as a discharge and allows individuals to start over without the worry of debt.

Bankruptcy can halt mortgage foreclosure and help those about to lose their mobile homes to keep them. This can help those who are behind in payments. But bankruptcy does not eliminate property lines without paying first.

Bankruptcy can help keep a motor vehicle from being repossessed or help individuals regain repossessed property from creditors. Bankruptcy can also stop the harassment of debt collectors, wage garnishments, and other collecting creditors.

It can prevent or restore utility service termination and allow individuals to have creditor claims challenged when fraud has been an issue. In this case some creditors try to obtain more money than what was originally owed. Bankruptcy can assist with this problem.

Bankruptcy Chapters
Illinois has different chapters of bankruptcy available. Each of these chapters assists in different situations. Illinois law provides four kinds of bankruptcy.

Chapter Seven bankruptcy is called the liquidation of debts or straight bankruptcy as it admonished debtors to forego property under the exemptions limits. The property is then sold through trustees and the money is used to pay creditors.

Chapter Eleven bankruptcy is called reorganization and is for business purposes and those who have debts in extremely high amounts.

Chapter Twelve bankruptcy helps assist family owned farms.

Chapter Thirteen bankruptcy is called debt adjustment and helps individuals plan a payment system for repaying debts from a present income.

Most Illinois citizens will file for Chapter Seven bankruptcy or Chapter Thirteen bankruptcy as they are for small corporations, single individuals, and married couples. Chapter Seven bankruptcy can be re-filed six years after a previous filing date, whereas Chapter Thirteen bankruptcy can be re-filed whenever needed. However only certain individuals are eligible for bankruptcy.

Chapter Seven Bankruptcy
Chapter Seven bankruptcy will discharge all current debts through the court. Some dislike this kind of bankruptcy because it requires different types of property to be sold. Property can be exempt in some cases, but un-exempt property will be sold via an assigned trustee.

Those who have missed mortgage payments or vehicle payments are not advised to file for Chapter Seven bankruptcy because these kinds of property are usually sold.

Chapter Thirteen Bankruptcy
Under Chapter Thirteen bankruptcy individuals will be advised in how to have an exact plan for how to pay for debts within a maximum of five years. Chapter Thirteen bankruptcy does not sell property and instead assists in how to use current incomes to pay off debts.

See also:
Illinois Felony
Illinois Gun Laws
Illinois Divorce
Illinois Misdemeanor External link (opens in new window)
Illinois Expungement External link (opens in new window)