When you decide to file for bankruptcy in Illinois, you may worry about losing one of your most important possessions--your home. At the Law Office of Paul R. Idlas, we want to help you understand what might happen to your house once you start resetting your finances.
Illinois residents who are looking into bankruptcy options in order to relieve debts have two primary options. Chapter 13 and Chapter 7 bankruptcy both have their unique benefits, allowing different people in different situations to find use in them.
You likely have heard that if you file Chapter 7 bankruptcy in Illinois, the Bankruptcy Court will discharge all of your credit card debts. In general, this is true. However, it may not discharge your very recent credit card debts.
If you are facing mounting bills and the constant threat of creditor action, personal bankruptcy may offer you the best pathway to stopping you from sliding deeper into debt and instead re-establishing yourself financially in Grayslake. A Chapter 7 bankruptcy offers the benefit of having certain debts discharged, freeing up additional resources to help you in settling others. Yet this is a benefit that is not extended to all; you must first qualify via the Chapter 7 means test.
If you are like a lot of people in Illinois, you might not know that there are multiple types of consumer bankruptcy plans. When most consumers think about bankruptcy, they automatically think about losing assets. This can happen with a Chapter 7 bankruptcy, called a liquidation bankruptcy as assets may be seized in order to repay creditors. However, this does not happen with a Chapter 13 bankruptcy plan.
During a Chapter 7 bankruptcy, you can discharge most debt and emerge from the pile of overwhelming expenses with a clean financial slate. After listing all your credit card debt, medical expenses and loans, you can essentially wipe them free of your account and begin again. Yet, while filing for a Chapter 7 bankruptcy, you may decide to keep paying on a loan, even after the case is discharged.
If you are one of the many Americans who are overwhelmed with debt, you may receive a host of calls from creditors and collection agencies who are trying to collect past due amounts on your financial obligations. These calls can become quite harassing, as collectors may start calling at all hours of the day and night in an attempt to get you to make a payment. Once you file your bankruptcy papers with the court, an automatic stay is placed on your name and creditors are no longer able to contact you regarding your debt. In fact, when the automatic stay is in place, collection agencies and creditors must stop any wage garnishments, and cannot pursue any lawsuits that may have been initiated on your case. This includes all actions and methods that are used to collect a debt.
Credit cards can be a little daunting if you have recently filed for bankruptcy. The chances are high that overwhelming credit card expenses may have contributed to your filing for bankruptcy in the first place. Credit cards can, however, help to rebuild your credit following a bankruptcy, but only if they are used in the right way. There are credit card companies that prey on people with poor credit, so it is essential that you are able to identify companies that are trying to help you rebuild your credit as opposed to those who are trying to destroy it.
When you were considering filing for bankruptcy, you may have had a few people tell you it would be the end of the world, at least in the financial sense, if you went through with it. “You’ll never be able to get a credit card or a loan again,” they may have cautioned you. While it’s true that a Chapter 7 or Chapter 13 bankruptcy can affect your credit report and result in a few setbacks for a while, there is no real reason to fear that you and other Illinois residents won’t be able to get a credit card or car loan or do the other things that people who have never been through a bankruptcy can do.
At the Law Office of Paul R. Idlas in Illinois, we help people like you file bankruptcy so as to get out from under overwhelming debt. But once your bankruptcy period ends, you may think the first thing you should do is reestablish your credit.