Justia Lawyer Rating
AMI
SuperLawyers - Rasing Stars
NACBA

Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as “liquidation” bankruptcy. This form of bankruptcy is normally best suited for people with low incomes and large amounts of unsecured debt. Filing for Chapter 7 bankruptcy will eliminate this type of debt without having to pay for it and typically only lasts four to six months. However, not everyone can file for Chapter 7 bankruptcy.

Who Can File for Chapter 7 Bankruptcy?

To qualify for Chapter 7 bankruptcy, you must pass the “means” test. The means test is used to determine whether your household income is at or below the median income level in your jurisdiction. Even if you are above that threshold, however, you may still qualify if you have certain uncommon monthly expenses. In determining whether you qualify, it is important to speak with an experienced bankruptcy lawyer in Chicago who knows the different deductions you can take.

What is the Process of Filing for Chapter 7 Bankruptcy?

After you file the case, you will have a meeting of creditors with an appointed trustee. During this meeting, the trustee will review your petition, ask questions to verify if everything is accurate, and determine whether there are any unexempt assets to liquidate.

The standard Chapter 7 bankruptcy timeline is as follows:

  1. Within 180 days prior to filing complete an approved credit counseling course
  2. Meet with one of our attorneys (virtually or in person) to prepare and file your bankruptcy petition
  3. Within 20-40 days attend a mandatory meeting of creditors
  4. After the meeting, complete any reaffirmation agreements within 45 days
  5. Complete a debtor education course
  6. Within four to six months from filing receive your discharge order

What are the Advantages of a Chapter 7 Bankruptcy?

Immediately upon filing for Chapter 7 bankruptcy you are protected from your creditors. The “automatic stay” prevents creditors from collecting debt from you while you are in the case – creditors cannot call you, garnish you, pursue any lawsuits against you, or repossess your property without seeking court permission.

In addition to this protection, you will be able to eliminate your eligible unsecured debt, including:

  • Credit Cards
  • Medical Bills
  • Personal or Payday Loans
  • Utility Bills
  • Judgments and Lawsuits, and
  • Repossessions

Will I Lose My Property if I File Chapter 7 Bankruptcy?

Although Chapter 7 bankruptcy is a liquidation chapter, in practice it is very rare for the trustee to sell your property. Under Illinois law, you are afforded certain exemptions that prevent the trustee or creditors from doing this. The most common exemptions include:

  • Any personal property up to $4,000
  • Motor vehicles up to $2,400
  • Necessary wearing apparel 100%
  • Residential property homestead exemption up to $15,000 ($30,000 for joint cases)
  • Social security benefits 100%
  • Pension and retirement accounts 100%
  • Proceeds from a lawsuit stemming from personal injury $15,000

Additionally, if you are financing a vehicle and would like to keep it you may do so through the “reaffirmation” process. If you are current on your car note, and continue to pay it while in the case, the creditor will allow you to keep the car and sign a new contract with them under the same pre bankruptcy terms. Conversely, if the car note is too burdensome to pay, you can also decide to “surrender” the car and eliminate the outstanding debt.

Contact Our Chicago Chapter 7 Bankruptcy Lawyers for a Free Consultation

If you are considering filing for Chapter 7 bankruptcy call now to learn more about our services. The consultation is free and you will speak directly with a bankruptcy lawyer in Chicago who will answer all your questions and determine if bankruptcy is the right course of action for you.

Client Reviews

I am honored to provide such a financial relief feedback for this amazing blessing whose name is Atty. Wonais. There is so much I could share endlessly about his superb knowledge and service that he offered me as his...

- Val B.

I was referred to them, and this has been the best decision I have ever made. I never been this confident in a person like I am with John. He heard my needs and wants, he made it possible to give me that. Excellent...

- Nicole Murray

This office and staff was amazing. I was referred to John from my best friend and as soon as I reached out he was very prompt on getting back to me and helping. From start to finish the process was amazing stress free...

- Kierra Smith

So one night I went online looking for advice on google and John came up and I called him on the weekend late evening and he happened to answered which was awesome. John helped me out with my situation he gave me amazing...

- Freddy

John took me on as a client with no problem. He was very understanding, passionate, helpful and available every step of the way. Trust me I am a very happy client, I definitely recommend John.

- Jessica Burton

John did a wonderful and seamless job with my case-he handled everything properly and was very timely in all of his communication. He is professional and reliable. I would highly recommend him to anyone who may have to...

- Ashley I.

I had a great experience with Wonais Law, LLC. John is very patient and replies right away to any questions or concerns that you have. I would recommend his services to anyone.

- Erika Sing

Get in Touch

Fill out the contact form or call us at (312) 883-5422 to schedule your free consultation.
  1. 1 Free Consultation
  2. 2 Available 24/7
  3. 3 Plan for Your Future Today

Leave Us a Message