FREQUENTLY ASKED QUESTIONS REGARDING BANKRUPTCY IN ILLINOIS
Q: I heard Bankruptcy was no longer available, is this true? No it is not true. On October 16, 2005 a new Bankruptcy Code became effective. It did not do away with Bankruptcy it simply changed some of the requirements for filing Bankruptcy
Q: Are Medical Bills discharged in Bankruptcy? Yes, all bills not secured by house, car or personal property are dischargeable. This includes credit cards; cash store loans, and payday loans.
Q: Will I lose my home? Probably not. You get to keep $15,000 dollars in equity in you home; $30,000 dollars if you are married and both own the property. If you have a mortgage you must make the payments after filing or you will lose your home.
Q: Will I lose my car? Probably not. You get to keep $2,400 dollars in equity in any one motor vehicle. $4,800 dollars if you are married and both own the property.
Q: How do I know if I have too much equity? As an example lets look at your home equity. Look on your property tax bill for the fair market value. Subtract from the fair market value your mortgage balance and $15,000.00 if you are single or $30,000.00 if you are married and both people are on the deed. If you have a negative balance your house is safe. If you have a positive balance, subtract 5% of your fair market value from the remaining balance. If negative your house is safe. If the equity comes out positive it sill may be safe it depends on the mount of equity. Of course you could come in for a free consultation and we will do all the calculating for you. We will then tell you if you are safe.
Q: Will I lose my personal property? Probably not. You get to keep $4,000 dollars in personal property. $8,000 if you are married.
Q: Will bankruptcy affect my employment? NO. Employment discrimination is illegal. Federal law prohibits any discrimination based on bankruptcy on your credit status.
Q: What happens if my bankruptcy is dismissed? The court mails all of your creditors a notice saying that the case is dismissed. The automatic stay is terminated, and your creditors are free to resume calling, coming to your home and or work, and they are free to pursue their recovery in the state courts.
Q: Can I protect a cosigner? In a Chapter 7, No. In Chapter 13 Yes, you can but only by paying the entire loan off in the Chapter 13 plan.
Q: Should I file bankruptcy before I get married? Yes, your bad credit can affect your new spouse. However, if your soon to be spouse has bad credit wait and file together.
Q: If I am married, does my spouse have to file also? No, married people can file separately but your spouse's income and expenses will be reviewed by the court to determine eligibility for bankruptcy.
Q: Will filing bankruptcy stop any lawsuit, or a warrant for my arrest? Yes, if it is debt related. Criminal proceedings, including fraudulent check writing, are not included. Stopping warrants is not automatic. It does take time to have the warrant reversed.
Q: Will bankruptcy wipe out unpaid federal income taxes? Chapter 7 Yes, but they must be 4 years overdue and you must have filed a tax return in the year it was due. In Chapter 13 Yes, all taxes if you pay them in the plan.
Q: Will a bankruptcy affect my ability to get future student loans? No.
Q: Do I have to be an American citizen to file bankruptcy? No.
