The land of the Windy City is home to deep dish pizza, the Billy goat curse of the Chicago Cubs, and the comedy house, Second City. Residents living in and around Chicago, IL are proud of living in an area of extreme culture, deep history, and of course, an often windy climate.
While the Cubs have never been able to break the 1945 Billy goat curse by winning the world series, other individuals or families may feel similarly cursed with mounting debts and too many bills. When a tragedy, such as an illness, injury, or loss of job occurs, your bills can turn into a mountain of fear and worry, making it impossible to enjoy daily life.
Filing Chapter 7 bankruptcy can put a stop to fear and halt the worry in making ends meet. It doesn’t take long to file for bankruptcy, Chapter 7, but the results could make a positive impact on your life forever. For many Illinois residents, filing for bankruptcy has saved families, marriages, and even lives.
What Does Filing Chapter 7 Involve?
From start to finish, filing Chapter 7 takes approximately 6-8 months. Anyone can file for bankruptcy, but in order to discharge all your debts, you must meet the minimum qualifications. Most debtors hire a bankruptcy attorney to help them handle their case. Pro se filing, or filing on your own, is possible, but a higher risk of dismissal without discharge, or unintentional fraud is likely.
During your first meeting with your bankruptcy attorney, you will need to explain your financial situation and the reason why you feel bankruptcy will be best for you. For the best results, you should bring the following information to your initial meeting:
- Last year’s tax return
- Last six months of pay stubs (for you and your spouse)
- A complete list of creditors and lenders
Your attorney will ask questions about your finances. You should mention any outstanding garnishments, judgments or other issues that have been issued. Once your attorney has reviewed these documents, he will want to see if you meet the qualifications before filling out your petition.
The Bankruptcy Petition for Chapter 7
Ranging from 45-60 pages, your petition is a set of financial documents that is submitted to the bankruptcy court, your creditors, and the representative of your creditors (called a Trustee). This petition will outline your need for bankruptcy, details of all money owed to which creditors and the amount of assets and property that is exempt (see below). In the first pages of the petition, your income will be displayed. According to bankruptcy law, anyone who wishes to file must fall at or below the average income level for the state they live in. For Illinois residents the median income level is as follows:
- One individual: $46,355
- Two individuals: $60, 073
- Three individuals: $69,910
- Four individuals: $81,097
If there are more than four individuals in your family, federal law requires you to add $7,500 to the base income level per person. Please note that these numbers can change annually. For those that exceed the average income levels for Illinois, the means test provides another method in which to qualify for bankruptcy, Chapter 7 or otherwise. This test uses a mathematical procedure to determine a debtor’s worthiness for bankruptcy based on a ratio of assets and debts. Depending on your situation, the means test could show whether a Chapter 7 or Chapter 13 bankruptcy is best for you.
Filling Out the Chapter 7 Petition
After your bankruptcy attorney has filled the information regarding your debt in the bankruptcy petition, the next area to fill out is the asset portion of your petition. All assets must be listed in the bankruptcy petition, but not all assets need to be included in the petition. According to the Bankruptcy Reform Act, based upon the state laws a resident lives in, he or she can claim certain amounts of property to be exempt from the bankruptcy. This means that the individual filing can keep the assets while still discharging debt. The state bankruptcy exemption laws for Illinois include:
- Homestead exemption: A primary residence worth up to $15,000 is exempt.
- Vehicle: One automobile worth up to $2,400 is exempt.
- Wages: Up to 85% of gross wages (not including taxes)
- Personal property: Any personal property including furniture and other household goods up to $4,000.
- Pensions and Retirement funds:
- 100% General Assembly retirement funds
- 100% Police officers’ pensions
- 100% Firefighter pensions
- 100% Municipal retirement fund
- 100% City, county, state employees’ retirement funds
- 100% Sanitary district employees’ retirement funds
- 100% State universities retirement system
- 100% State universities teachers and employees retirements funds
- 100% Judges Retirement system
- 100% Public library system retirement funds
- 100% House of Correction employees pensions
- 100% Medal of Honor exemptions (retirement and pension for those on Honor Roll in the Army, Navy, Air Force, or Coast Guard)
- Benefits:
- 100% Veterans Administration benefits
- 100% ERISA benefits
- 100% Public safety officers’ death benefits
- 100% Social Services benefits
- 100% Social Security
- 100% Awards for occupational diseases
- 100% FEMA benefits
Some state allow debtors a choice between state or federal exemption laws, but Illinois bankruptcy law mandates that Chapter 7 bankruptcy filers can only use the state exemptions. The type and amount of these laws change from year to year.
Once you have put your petition together, your bankruptcy attorney will file it electronically. You will be required to attend a short hearing, and possibly supply additional financial information. Your case will be closed and your debts discharged about 90 days after your hearing.
Free yourself from the debt curse today. Talk to a bankruptcy attorney and discharge your debt and get back to your life, enjoying all the beauty that the Windy City and other areas of Illinois have to offer.
Illinois Bankruptcy Courts
United States Courthouse
301 West Main Street, 1st Floor
Benton, Illinois 62812
Phone: (618) 435-2200
Everett McKinley Dirksen
United States Courthouse
219 South Dearborn Street
Chicago, Illinois 60604
Phone: (312) 435-5694
201 North Vermillion Street, Room 130
Danville, Illinois 61832
Phone: (217) 431-4820
Melvin Price Federal Building and
United States Courthouse
750 Missouri Avenue
East St. Louis, Illinois 62201
(618) 482-9400
Federal Building
100 N.E. Monroe Street, Room 216
Peoria, Illinois 61602
Phone: (309) 671-7035
Federal Building
211 South Court Street
Rockford, Illinois 61101
Phone: (815) 987-4350
Paul Findley Federal Building and
United States Courthouse
600 East Monroe Street, Room 225
Springfield, Illinois 62701