Bankruptcy is often surrounded by a cloud of misconceptions and misinformation, which can deter individuals from seeking the financial relief they need. As a DuPage County bankruptcy lawyer with decades of experience, I want to clarify some of these common misconceptions about filing for bankruptcy in Illinois under both state and federal law. My goal is to provide you with accurate information so you can make informed decisions about your financial future.
One common misconception is that filing for bankruptcy will ruin your credit forever. While it’s true that bankruptcy can have a significant impact on your credit score, this effect is not permanent. In fact, many people find that their credit scores begin to improve within one to two years after their bankruptcy discharge. Bankruptcy provides a fresh start, a beacon of hope that allows you to rebuild your credit by managing your finances more responsibly post-bankruptcy.
Another myth is that you will lose all your assets if you file for bankruptcy. This is a major concern for many, but it’s largely unfounded. Illinois law allows for various exemptions that can protect certain types of property during bankruptcy proceedings. For example, your home, car, personal belongings, and retirement accounts can often be safeguarded to some extent. Chapter 13 bankruptcy, in particular, permits you to keep your assets while reorganizing your debts into a manageable repayment plan.
Some people believe that only irresponsible spenders file for bankruptcy. This couldn’t be further from the truth. Many individuals who file for bankruptcy do so because of unforeseen circumstances such as medical bills, job loss, or divorce. These events can happen to anyone, and filing for bankruptcy is a responsible step toward regaining control over one’s financial situation.
There is also a misconception that you can only file for bankruptcy once in your lifetime. While there are limits on how often you can file, it’s not a once-in-a-lifetime option. You can file for Chapter 7 bankruptcy once every eight years, and Chapter 13 can be filed more frequently, depending on the specifics of your case and the outcome of previous filings. It’s important to understand the rules and timelines, which a knowledgeable bankruptcy attorney can help you navigate.
Bankruptcy Doesn’t Eliminate All Debt
Many people think that bankruptcy will eliminate all their debts. While bankruptcy can discharge many types of unsecured debt, such as credit card debt and medical bills, there are certain obligations that bankruptcy typically does not discharge. These include student loans, child support, alimony, and certain tax debts. Understanding what debts can be discharged is very important when evaluating whether bankruptcy is the right solution for your financial issues.
Some individuals worry that filing for bankruptcy is complicated and overwhelming. While it’s true that the process involves detailed paperwork and adherence to specific legal procedures, you don’t have to go through it alone. Hiring an experienced bankruptcy lawyer can significantly simplify the process. A bankruptcy attorney can help you understand the legal requirements, prepare the necessary paperwork, and guide you through court proceedings. At Covert Marrero Covert LLP, we are here to guide you through every step, ensuring that you understand your options and make the best choices for your situation.
Finally, there’s a misconception that you should only consider bankruptcy as a last resort. While it is a serious decision, waiting too long to file can actually worsen your financial situation. If you are struggling with insurmountable debt, speaking with a bankruptcy attorney sooner rather than later can provide you with options that you may not have known were available. Bankruptcy is not a sign of failure but a legal process designed to give people a fresh start. It should be considered a viable option when appropriate.
Illinois Bankruptcy FAQs
What are the main types of bankruptcy available to individuals in Illinois?
In Illinois, the two main types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidating non-exempt assets to pay off unsecured debts. In contrast, Chapter 13 permits you to keep your property and repay debts over a three to five-year period under a court-approved plan.
How long does a bankruptcy stay on my credit report?
A Chapter 7 bankruptcy will stay on your credit report for up to 10 years from the date of filing. A Chapter 13 bankruptcy will remain on your credit report for up to 7 years. However, this doesn’t mean your credit will be impacted negatively for the entire duration; many people see improvements much sooner.
Can I file for bankruptcy without an attorney?
While it’s legally possible to file for bankruptcy without a bankruptcy attorney, it is not recommended. The process is complex and involves numerous legal requirements and deadlines. An experienced bankruptcy lawyer ensures that your case is handled correctly and efficiently, potentially preventing costly mistakes.
Will I lose my home if I file for bankruptcy?
Not necessarily. Illinois has a homestead exemption that allows you to protect a certain amount of equity in your home. Additionally, Chapter 13 bankruptcy can help you catch up on mortgage payments and keep your home. Each case is unique, so it’s important to discuss your specific situation with an attorney.
Are all my debts discharged in bankruptcy?
No, not all debts are dischargeable in bankruptcy. Common non-dischargeable debts include student loans, child support, alimony, and certain taxes. However, many unsecured debts like credit card debt and medical bills can be discharged.
How can Covert Marrero Covert LLP help me with my bankruptcy case?
At Covert Marrero Covert LLP, our experienced DuPage County bankruptcy lawyers provide personalized guidance throughout the bankruptcy process. We help you understand your options, protect your assets, and develop a plan to achieve financial stability. Our team is committed to ensuring that you receive the best possible outcome for your situation.
Why Choose Covert Marrero Covert LLP?
Facing debt issues can be overwhelming, but you don’t have to go through it alone. The DuPage County bankruptcy lawyers at Covert Marrero Covert LLP have decades of experience helping clients navigate the complexities of bankruptcy law. We understand the intricacies of both Illinois and federal bankruptcy laws and use this knowledge to protect your interests and secure a fresh financial start for you.
Our approach is client-focused, providing you with personalized attention and tailored solutions that address your unique financial situation. We are committed to helping you achieve the best possible outcome, whether you are considering Chapter 7 or Chapter 13 bankruptcy. Our track record of success speaks for itself, and we are ready to put our experience to work for you.
Call Our DuPage County Bankruptcy Lawyers For Debt Relief
If you are facing overwhelming debt, it’s time to take control of your financial future. Contact the experienced DuPage County bankruptcy lawyers at Covert Marrero Covert LLP today by calling 630-717-2783 to schedule your consultation. We offer comprehensive bankruptcy services to clients throughout the Chicago metro area, with offices in Warrenville, Schaumburg, Naperville, and Joliet. Our team is here to discuss your case and help you find the best solution for your financial challenges. Call us now and take the first step towards a brighter financial future.
