Chicago Bankruptcy LawyerChicago Bankruptcy Lawyers Protecting the Rights of Consumers
The Kaplan Law Firm has handled consumer bankruptcy matters for over 48 years. Whether you are filing for Chapter 7 or Chapter 13 bankruptcy, you should consult an experienced attorney about filing. We have substantial experience advising clients who are wondering whether filing for bankruptcy would bring them relief and which kind of bankruptcy might be appropriate. Our attorneys handle all of the crucial elements of our clients’ cases, with paralegals expediting paperwork that must be completed so that reasonable fees are charged.Bankruptcy
Bankruptcy ordinarily starts when a debtor files a petition with the bankruptcy court. The petition can be filed by an individual debtor, by spouses who are in debt, or by a business. There are different kinds of bankruptcies. Consumers usually file for Chapter 7 or Chapter 13 bankruptcy, depending on what their situation is. Chapter 7 is a liquidation bankruptcy. Chapter 13 is a debt reorganization bankruptcy.
The purpose of filing for bankruptcy is to obtain a discharge. A bankruptcy discharge is a permanent order that releases you from being personally liable for specific debts. This means that you will not need to pay those debts that are discharged. Even though you will not be personally liable, if there is a valid lien that has not been avoided in a bankruptcy case, it will stay after the bankruptcy case is over. This means that a secured creditor may enforce the lien to recover the secured property.Chapter 7
Some debtors can file for Chapter 7 bankruptcy to obtain a discharge of their debts. The means test will determine whether you can file for Chapter 7 bankruptcy. Our Chicago bankruptcy attorneys also can advise you on whether it may be right for your situation. The trustee may liquidate certain property to repay creditors. Obtaining a discharge can take 4-6 months. Debtors who already received a bankruptcy discharge within the last 6-8 years may not be able to file for Chapter 7 bankruptcy. Moreover, people who have sufficient income to repay their debts will not pass the means test and will need to file for Chapter 13 bankruptcy, rather than Chapter 7.
Once a Chapter 7 bankruptcy is filed, an automatic stay goes into effect. This stops most creditors from being able to collect the money owed. During the stay, most creditors cannot garnish or pursue your car or house, or conduct other collection activities. You will not be able to sell or give away the property that you own at the time that you file for bankruptcy without court consent.Chapter 13
Chapter 13 bankruptcy is a form of consumer bankruptcy that requires you to create a repayment plan and repay your debts. If you file for Chapter 13 bankruptcy, you will need to be able to show the court that you can afford to meet monthly household obligations and make regular payments. A bankruptcy lawyer can help Chicago residents craft a plan that is likely to be approved by a court.
There are different categories of debts. Priority debts need to be paid in full, and they include tax debts and child support and alimony debts. Secured debts are debts secured by an item of value, such as your car or house. If you want to keep an item that is secured, you will need to continue making regular payments and also pay arrearages in your plan. Your plan will need to apply any disposable income toward unsecured debts. Unsecured debts are those not secured by property, such as credit card bills or medical bills. These need not be paid in full, but your extra income needs to go toward repaying them. Unlike in a Chapter 7 bankruptcy, you are allowed to keep all of your property in a Chapter 13 bankruptcy if you can afford this.
The same means test that is used to determine eligibility for Chapter 7 bankruptcy is also used to decide what a debtor must pay to creditors in a Chapter 13 bankruptcy. The trustee and creditors will have a chance to object to the debt repayment plan, but if there are no objections, the court will confirm your plan. Most people who file for Chapter 13 bankruptcy propose a five-year repayment plan.Student Loans
Bankruptcy is not an available solution to all types of debts. It is not appropriate to file for bankruptcy if the primary debt that is causing your difficulties is a student loan. Our Chicago bankruptcy lawyers understand that it can be stressful to pay off student loans. However, student loan debt is not treated in the same way as other unsecured loans, except when a debtor is able to show that it would be an undue hardship to be bound to paying off the loans. This is a very tough standard to meet.
There is another path that may be available to you to reduce the stress of student loans. The Kaplan Law Firm may be able to help you keep your credit solid by applying for or negotiating an income-driven repayment plan on your behalf. The repayment plan would involve federal and private loan repayments that you would be able to afford.
For federal loans, the U.S. Department of Education provides four types of income-driven repayment plans. The plans are the Revised Pay as You Earn Repayment Plan, the Income-Contingent Repayment Plan, the Income-Based Repayment Plan, and the Pay As You Earn Repayment Plan. Each of these plans has monthly payments that are calculated to be manageable, based on your wages, income, and family size. For example, the Income-Contingent Repayment Plan would allow you, as a borrower with eligible federal student loans, to repay loans based on the lesser of 20% of your discretionary income or what you would pay on a repayment plan with a fixed income over a 12-year period, adjusted based on your income.Consult a Knowledgeable Bankruptcy Attorney in the Chicago Area
Bankruptcy is not the right solution for everyone. However, for some people with massive consumer debt, bankruptcy can provide great relief. Meanwhile, people worried about student loans may have other avenues to obtain debt relief. You should talk to a bankruptcy attorney about your options. Whether you believe that Chapter 7 or Chapter 13 may be the solution to your financial worries, or you are concerned about repaying your student loans, we may be able to help you. The Kaplan Law Firm, LLC represents people throughout Cook, Lake, DuPage, Will, and Kane Counties. Call us at (312) 294-8989 or contact us through our online form.