Category: Chapter 7 Bankruptcy Lawyer

If your debt is greater than your current income and you appear headed into further debt, declaring bankruptcy is an option you should consider. Chapter 7 can help clear away several unsecure debts, which can bring your finances back on track. While it can have a negative effect on your creditworthiness, filing can be a feasible option if your home is facing foreclosure.

Who is Eligible for Chapter 7 Bankruptcy?

In order to quality for this bankruptcy you:

• Need to complete a credit counselling course from an approved agency at least 180 days before you file.
• Cannot have filed for Chapter 7 bankruptcy in the past eight (8) years or Chapter 13 bankruptcy in the past six (6) years.

Also, the average of your monthly income in the past six (6) months must be less than the income of a household that is the same size as yours or you will have to clear a means test. This will determine if your disposable income is sufficient enough to make partial debt payments to unsecured creditors.

The Means Test

The decision to file for bankruptcy is not yours alone. You will also have to clear a means test ordered by the court to determine whether you are eligible for Chapter 7. As previously mentioned, if you earn less than the median, you are eligible.

In fact, even if your income is higher than the median, you may still qualify after allowable expenses are discarded. Ultimately, if the final calculation shows you have enough money left over after expenses to pay off debts, you may be allowed to file Chapter 13.

Debts Chapter 7 Bankruptcy Can and Cannot Erase

Chapter 7 bankruptcy can do away with dischargeable debts such as medical bills, car loans, utility bills, credit card debt and judgements from debt collectors. However, it cannot erase debts pertaining to child support, alimony, student loans and debts you owe the government, such as traffic tickets and tax debts.

Before you file, make sure you are actively knowledgeable on your debt payments to increase your chances of qualifying. If you are looking for an attorney to help you out, get in touch with ours at Covert Marrero Covert, LLP today. We offer personalized services in Warrenville, Schaumburg or Naperville, Illinois. Get in touch with us for a one-on-one consultation today. We are also accepting virtual conferencing appointments via telephone and video conferencing.

Filing for bankruptcy is never a pleasant experience, but with a professional attorney by your side, the process can be simplified. Here are some things you need to know about filing for Chapter 7 Bankruptcy.

If you file for bankruptcy in Illinois, you can make sure some of your property remains safe with certain exemptions. For instance, when you file Chapter 7 bankruptcy, the trustee can sell off property that is not exempt and use the money to pay off creditors, utility bills and loans. However, before you opt for this, you should determine whether it makes financial sense for you. Here are some questions you should ask yourself:

• Will you have to give up property you would like to retain?
• Will filing for Chapter 7 Bankruptcy give you enough funds to make it beneficial for you?
• Can your creditors take your property or income, even if you don’t file for bankruptcy?

The answers to these questions will help you figure out whether filing for this bankruptcy benefit you, or if you are better with the alternative, i.e. Chapter 13.

If you think you can file, you need to submit some forms with the bankruptcy court. These documents will require the following information:

• Your debts, properties, current income and monthly living expenses.
• Property you own and the funds spent in the last two years.
• Property you sold or gifted during the last two years.
• Property you can retain legally, i.e. those that are exempt. This can be your home, furniture, clothing, your car, etc.

You will also have to pass a means test if you decide to go with this bankruptcy. In other words, if your disposable income is high, the Bankruptcy Code will determine you should opt for the Chapter 13 plan so some of the funds can be paid to creditors. The key to filing is to wait long enough to ensure you are eligible for Chapter 7.

However, if you are wallowing in debt and do not have cash to spare at all, you could pass the mean test. Rather than tackling these complicated calculations yourself, consider hiring an experienced attorney from Covert Marrero Covert. We can do the number-crunching so you don’t have to, and we can assist you in the filing process as well. We offer our legal services in Naperville, Schaumburg, and Warrenville, Illinois. Call us today and take the first step toward a fresh start.