What is Bankruptcy?
Bankruptcy is a legal remedy for your financial problems, not the end of your financial future. The fear of bankruptcy is common, because creditors don't want you to know that you have alternatives. Those alternatives include Chapter 7 and Chapter 13, both of which will get creditors off your back and put you on the road to financial health. Most people can keep all of their possessions, including cars, houses and bank accounts. You can even establish credit again shortly after filing bankruptcy.

Chapter 7-Erase Debt with a "Straight Bankruptcy"
The majority of all bankruptcies filed are Chapter 7, also called a "straight bankruptcy." A Chapter 7 bankruptcy will eliminate unsecured debts, such as credit cards, utility bills, medical bills, personal loans and debts owed on a repossessed car.

Chapter 13-Reorganize Your Bills
Chapter 13, also known as a "debt repayment plan," is designed for people who have had a temporary setback in life, but are still earning enough money to pay some or all of their debts. A Chapter 13 is usually used to help people catch up on their house and car payments.

Who Should Consider Bankruptcy?
If you can answer yes to any of the following questions, bankruptcy may be the answer for you. Are you.

• falling behind on your monthly bills because of loss of employment, divorce, illness or just plain over-extension?
• taking cash advances on one credit card to make payments on another?
• using up your savings to pay bills?
• receiving calls and letters from creditors or collection agencies at home or on the job?
• without car or medical insurance because you can't afford the payments?
• losing sleep because you're worried about your bills?

The Sooner You Act, the Better
If you're not sure what to do about your financial problems, call us right away to schedule a free consultation. You cannot afford to wait if you want to achieve the most favorable result. Do not wait for your creditors to sue you. Do not wait until a creditor is garnishing your check. Do not wait until your mortgage company files a foreclosure suit against you. The sooner you act, the easier it will be for your bankruptcy to go through without complications. Call without hesitation for your free consultation, or click here for further information on how we can help.

A Chapter 7 bankruptcy will eliminate unsecured debts, such as credit cards, utility bills, medical bills, personal loans and debts owed on a repossessed car.

Debts not covered
A Chapter 7 will not eliminate secured debts, like car loans and mortgages. If you want to keep your house or car, you must continue to make those payments. A Chapter 7 will also not eliminate debts such as student loans, recent tax bills, parking tickets, child support, alimony payments, or accidents caused by drunk driving. Those types of debts can only be dealt with through Chapter 13.

Student loans
The laws regarding the elimination of student loans changed in October 1998. The only way to get rid of student loans now is if you can show extreme hardship.

Tax debts
Generally, tax debts are dischargeable only if the debt is over three years old from the time it first became due.

Avoiding problems when filing Chapter 7
Because of the many nuances in Chapter 7 law, the specific terms of any filing will only become clear once the facts of a particular situation are known. However, if you are considering filing Chapter 7, there are a few things you should not do under any circumstances:

• Do not make any more charges or take any cash advances on any of your credit cards.
• Do not make any property transfers.
• Do not pay off one of your credit cards. That is called a "preference" and will make it more difficult for you to get a discharge.

The filing process
Filing Chapter 7 is relatively easy. There are typically no court appearances necessary. You need only to appear (with your attorney) for a very informal meeting that takes place about five weeks after your case is filed. This meeting is referred to as a Section 341 Meeting. The purpose of this meeting is for a court-appointed trustee to ask you a few very brief questions to determine whether you have any non-exempt assets. Your creditors are given notice of this meeting and are permitted to question you, but usually they are not present. The meeting generally takes less than five minutes. After the meeting, all you have to do is wait about two-and-a-half months for your discharge papers to arrive in the mail.

Chapter 13 is often referred to as a court-ordered debt consolidation. Chapter 13 will stop a pending foreclosure or car repossession. It will stop a wage assignment or wage garnishment. It will even prevent the IRS from taking any tax refunds that you are entitled to. In short, a Chapter 13 will allow you some breathing room so you can reorganize your finances.

Reorganizing your debts
When you file a Chapter 13, you are essentially consolidating all of your debts into one large debt. Payments are made either once a month by you to a court-appointed trustee, or are deducted automatically from your paycheck, whichever you prefer. The trustee will then distribute your money among all of your creditors according to a plan that we will help you formulate.

In a Chapter 13 you only have to pay back what you can afford. This determination is based on your income, your living expenses, the amount of your debt, your assets and types of debt you have. Chapter 13 can help you deal with recent student loans, recent tax debts, parking tickets and other debts that cannot be discharged in a Chapter 7.

The filing process
Filing Chapter 13 is very simple. After your case is filed with the court, you will go with your attorney to the office of the trustee. This meeting takes place about six weeks after your case is filed and is very informal. The purpose of the meeting is for a trustee to go over your case to make sure the plan that we have filed on your behalf is workable. Assuming that the trustee recommends your plan-and he/she almost always does-your case will be set for confirmation in front of a judge. You do not need to be present in court for your confirmation hearing-we will be there for you. Then, all you need to do a make your monthly payment to your trustee. If you prefer, we can arrange for your payment to be automatically deducted from your paycheck.

Duration of Chapter 13
The typical Chapter 13 plan will last between three and five years. If your financial situation improves during that time, you may choose to pay off your Chapter 13 plan in a shorter amount of time without penalty.

Disclaimer: The information provided here is to be used as general information only and is not intended to suffice as legal advice upon which you can rely for your particular situation. In the event you have specific questions, please call us or another qualified attorney.

Laws May Be Changing, So Don't Delay
312-360-0500 or 815-722-2201

Consumer Bankruptcy Review has named Stuart B. Handelman
"Bankruptcy Attorney of the Year" for the past five years.

Member: American Bankruptcy Institute
Chicago Bar Association, Bankruptcy Committee
National Association of Consumer Bankruptcy Attorneys, Will Bar Association

Disclaimer: The information provided here is to be used as general information only and is not intended to suffice as legal advice upon which you can rely for your particular situation. In the event you have specific questions, please call us or another qualified attorney.