Overcome Debt Burdens Through Bankruptcy

Medical bills, job loss and other financial emergencies can quickly erase the savings that you spent years building. If your debt is increasing at an unsustainable pace, you can take action to erase this burden and rehabilitate your credit in Illinois.

Bankruptcy offers a legal solution to qualifying individuals who are struggling to leave their debt behind. In Decatur, Paul G. Chiligiris, Attorney at Law, has offered skilled and straightforward legal counsel to countless clients since 1992. Contact Paul today to learn whether bankruptcy can help you obtain a fresh start.

Understanding The Difference Between Chapter 7 And Chapter 13 Bankruptcy

Both Chapter 7 and Chapter 13 bankruptcy allow successful filers to reduce debt; however, these solutions are not interchangeable. The differences between Chapter 7 and Chapter 13 include:

• Individuals who qualify: Those filing for Chapter 7 bankruptcy must meet income requirements or satisfy a means test requirement. Those filing for Chapter 13 must demonstrate that they have the resources to pay off their debt over time.
• The process for eliminating debt: Those filing for Chapter 7 bankruptcy agree to sell their assets to pay off their debt. Those filing for Chapter 13 must complete a repayment plan according to a court-imposed schedule.
• The time required to complete the process: Chapter 7 bankruptcy proceedings can conclude in 90 days, while Chapter 13 proceedings may extend to five years.

When you meet with Paul to discuss your situation, he will listen to your concerns and examine your records before determining the best approach for you. He is often asked whether bankruptcy can help his client save their home from foreclosure and keep their car safe from creditors. In many cases, the answer is yes.

Your financial problems may not be as hopeless as you believe. With Paul’s help, you may be able to find a positive path forward while retaining your assets. Please contact the office to learn more.

What Is A Bankruptcy Discharge, And How Does It Operate?

Many people file for bankruptcy to obtain a “discharge” of certain debts. A discharge is a court order that removes your legal obligation to repay most debts. Some debts cannot be discharged.

Examples of debts that usually cannot be eliminated include:

• Certain taxes
• Child support
• Alimony or spousal maintenance
• Most student loans
• Court fines or criminal restitution
• Debts from personal injury caused by driving under the influence

A bankruptcy discharge covers only debts that arose before the date your case was filed. Debts tied to fraud, such as obtaining money or property under false pretenses, are typically excluded. To ensure eligibility for discharge, all debts and assets must be listed in your bankruptcy documents. Omitting a debt could allow the creditor to continue collection efforts even after your case is closed.

If you have credit card debt, it is best to stop using your cards before filing. In some cases, courts have refused to discharge credit card debt when the debtor continued using the card and had not made several payments before filing.

The judge can also deny a discharge if you do something dishonest during your case, such as hiding property, falsifying records, lying under oath or ignoring court orders.

A Chapter 7 bankruptcy discharge is only available once every eight years. When a debt is discharged, you are no longer legally required to repay it, though you may still choose to make voluntary payments.

Secured debts, such as a home mortgage or vehicle loan, are different. Even if the personal obligation is discharged, the creditor can still repossess or foreclose on the property if payments are not made. You may be able to keep certain secured property if the court finds it is in your best interest and you sign a reaffirmation agreement.

What Is A Reaffirmation Agreement?

A reaffirmation agreement is a voluntary contract in which you promise to keep paying a debt that could otherwise be discharged. People often use these agreements when they want to keep certain property, such as a car.

Reaffirmation agreements must:

• Be voluntary
• Not create an unreasonable financial burden for you or your family
• Be in your best interest
• Allow you to cancel before the discharge is issued or within 60 days after the agreement is filed

If you do not have an attorney, the court will schedule a hearing to determine whether the reaffirmation agreement should be approved. The agreement does not become legally enforceable until the court gives its approval. If you choose to reaffirm a debt but later fall behind on payments, you remain responsible for the balance, and the creditor may pursue repossession or seek a judgment against you. Consulting with a Decatur bankruptcy lawyer is the best way to ensure your rights are safeguarded during this process.

What Property Can You Keep In Bankruptcy?

Bankruptcy law allows you to keep certain property, called exemptions, in both Chapter 7 and Chapter 13 cases. If you own more than the exempt amount in Decatur, the court may require you to use some assets to repay creditors.

You may keep:

• Necessary clothing, a Bible, school books and family photographs
• Home equity up to $15,000 if single or $30,000 if married
• Up to $4,000 in any property you choose
• One motor vehicle up to $2,400 in value
• Tools, books or equipment for work up to $1,500 in value
• Prescribed health aids for you or your dependents
• Life insurance proceeds and certain cash values payable to a spouse, child, parent or dependent
• The right to receive Social Security, unemployment, veterans’ benefits, disability or needed alimony/support
• Payments or awards for wrongful death, life insurance or personal injury (up to $15,000)
• Compensation through the Civil Liberties Act of 1988 or the Aleutian and Pribilof Islands Restitution Act

If you file jointly, each spouse may claim the full exemptions. Most retirement plans are also protected. Talk to an Illinois bankruptcy attorney to get a clearer picture of what properties you can keep after filing for bankruptcy.

Get A Strong Legal Ally By Your Side

Don’t let financial uncertainty determine your future. You can take an active role in overcoming your debt problems with a bankruptcy lawyer’s help. Connect with Paul today when you call 217-615-4053 or complete the online form. When meeting with Paul, you’ll want to bring an inventory of your personal and real property with the values of said property and the balances of any mortgages, car loans or other secured loans you have.

Paul G. Chiligiris, Attorney at Law, is a debt relief agency. Paul Chiligiris helps people file for bankruptcy relief under the Bankruptcy Code.