Naperville Chapter 7 Bankruptcy Lawyer

Attorney Helping Address Debts Through Chapter 7 Bankruptcy in Naperville, Illinois

Debts can cause a wide variety of difficulties for a person and their family. The requirement to repay what is owed along with interest can put a person in a difficult situation, especially if they do not have enough money coming in to cover regular expenses in addition to debt payments. When a person falls behind on debts, they may be dealing with regular collection calls or lawsuits from creditors. Fortunately, Chapter 7 bankruptcy provides a way to wipe out unsecured debts and start over.

At The McCormick Law Firm, LLC, our lawyer can help people in Naperville and other nearby communities in DuPage County and Will County determine whether Chapter 7 is the right path for receiving a fresh financial start. He can review a family's income, debts, and assets, explain what issues may need to be addressed during the bankruptcy process, and make sure a case will move smoothly through bankruptcy court. By providing compassionate, respectful legal help without judgment, he can help clients achieve lasting financial relief.

Who Qualifies for Chapter 7 Bankruptcy?

Before a person can file for Chapter 7, they must pass what is known as the means test. If their household income is below the median income in Illinois for the same family size, they will generally qualify. If income is higher than the median, a review of ongoing living expenses and disposable income will determine whether there is enough money to repay a significant percentage of what is owed. Our attorney can review financial information to help clients ensure that they will qualify for Chapter 7 bankruptcy.

What Happens During a Chapter 7 Bankruptcy Case

The bankruptcy process will begin by filing a bankruptcy petition with the local court. The petition will include information about assets, debts, income, expenses, and recent financial transactions. Our attorney can help clients gather all the information that is required and ensure that a petition is prepared and filed correctly.

After a bankruptcy petition is filed, the court will impose an automatic stay. This is a court order that will require creditors to stop taking any steps to collect debts that are owed. They will not be allowed to call a person, send letters through the mail, or take any other collection actions. If lawsuits have been filed, or if wage garnishment orders have been issued, they will be paused.

The court will appoint a bankruptcy trustee who will oversee the case. They will schedule a meeting of creditors, which is also known as a 341 meeting. During the meeting, the trustee will ask questions about a person's finances. Our lawyer can prepare clients for this meeting and make sure it goes smoothly.

After the 341 meeting has been held, a bankruptcy case will typically conclude within 60 days. The court will enter a discharge order that will permanently release a person from being required to pay the debts included in the case.

Debts That Chapter 7 Bankruptcy Can Eliminate

Most types of unsecured debts that a person owes can be cleared by filing for Chapter 7 bankruptcy. These debts may include:

• Credit card balances
• Medical and hospital bills
• Personal loans and payday loans
• Past-due utility bills and back rent
• Some older income tax debts

Secured debts may be discharged, but this will typically result in the creditor repossessing the collateral used to secure the debt. However, Chapter 7 can eliminate any deficiencies that remain after repossessions, preventing a person from being required to pay additional amounts. By eliminating most debts, a person and their family will be able to make a fresh start, manage ongoing expenses, save money, and begin rebuilding credit.

Debts That Cannot Be Discharged Through Chapter 7 Bankruptcy

Certain types of debts may remain after a Chapter 7 bankruptcy has been completed. Any obligations to pay child support or spousal maintenance will remain in place, and past-due amounts will need to be paid off. Recent tax debts or criminal fines and restitution usually cannot be discharged. In most cases, student loans cannot be discharged unless a person can show that these debts would cause them to experience extreme hardship.

When Will Assets Be Liquidated in a Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is also known as "liquidation bankruptcy," because certain assets a person owns may be seized and sold to pay some of their debts. While this can raise concerns about whether a person or family will lose some or all of the assets they own, most people will be able to keep most or all property. Many Chapter 7 bankruptcies are "no-asset" cases, because everything that a person owns may be protected by exemption.

The exemptions that are available to people who file for Chapter 7 bankruptcy in Illinois include:

• Homestead: Up to $50,000 in equity in a person's primary residence is exempt. When a married couple files for bankruptcy together, they may claim a total exemption of $100,000.
• Motor Vehicle: Up to $3,600 in equity in one vehicle may be exempt.
• Tools of the Trade: Up to $2,250 in books, tools, or other equipment a person uses for work may be exempt.
• Retirement Savings: Most 401(k) plans, IRAs, or other retirement benefits will be fully exempt.
• Necessities and Benefits: Most household items, such as clothing, kitchen utensils, appliances, or furniture, will be exempt. Benefits such as Social Security, unemployment compensation, or disability will also be exempt.
• Wildcard: An exemption of up to $4,000 may be used for any types of property that do not fall within other exemptions.

Contact Our Naperville, IL Chapter 7 Bankruptcy Attorney

Small errors in a Chapter 7 bankruptcy case can be costly. Our attorney can make sure property is valued accurately, determine the specific exemptions that apply, and make sure a petition and supporting documentation are filed correctly. He can also respond to requests for information from a trustee or address creditor objections while working to ensure that debts can be discharged correctly.

At The McCormick Law Firm, LLC, we will make sure you take the right steps to receive the financial relief you need. If debt has become too much to manage, contact our Naperville, Illinois Chapter 7 bankruptcy and debt discharge lawyer at 630-517-8570 and arrange a free consultation.