Illinois Bankruptcy proceedings are legal actions involving a person, or business entity that is unable to repay outstanding debts, and are handled by federal courts that follow the rules of U.S Bankruptcy Code. The process begins with the debtor, or a representative of creditors filing a petition with bankruptcy court. Events that push individuals to bankruptcy include the loss of a job, a divorce, a death in the family, a medical emergency, or some type of catastrophic event that diminishes the financial security of a person, or external events that can damage a business/corporation.
All of a debtor’s assets are evaluated and measured, and some assets may be used to repay a portion of the outstanding debt. The purpose of a bankruptcy is to release debtors from their debts, while giving creditors the opportunity to collect partial, or full repayment of those debt amounts. Buffalo Grove Bankruptcy actions allow individuals and companies a second chance to access credit, after debt repayment attempts.
The common types of bankruptcy actions most heard about include Chapter 7, Chapter 11, and Chapter 13. These bankruptcy proceedings may help individuals, but it is wise to contact a Buffalo Grove bankruptcy attorney to see if there are other ways to resolve overwhelming debt, as it will negatively reflect on a person’s credit report for 10 years from the date of filing the petition.
Once an individual has filed a Buffalo Grove bankruptcy petition with the courts, all attempts to collect a debt by the creditors must stop. This action is an automatic stay, and creditors must cease actions for:
- Buffalo Grove Illinois repossession,
- Buffalo Grove wage garnishments,
- Buffalo Grove Illinois foreclosure,
- Buffalo Grove Illinois bank levies,
- The constant never-ending harassing phone calls and mailings.
A means test must be done to decide if an individual is eligible for Chapter 7 whereby debts will be forgiven, or Chapter 13 whereby debts are paid off monthly for a period of up to five years, if individuals fall under the median income for certain family sizes, and are not abusing the bankruptcy system. If individual income is higher than the state mandated median, a person may have to file a Chapter 13 bankruptcy action, because there is an ability to pay off incurred debt.
Preparation for Buffalo Grove bankruptcy includes:
- construction of a master list of all individual debts and assets to assist a debtor and a knowledgeable Buffalo Grove Illinois bankruptcy attorney to determine debts to be discharged, and assets to be maintained to safeguard a person’s future livelihood, such as a house, or vehicle,
- defer additional credit application and maximized spending on open cards, or personal loans,
- do not cash out retirement accounts because they are often untouched during the settlement discharge, and
- do not transfer assets close to the time of filing a petition because the court may discern this as a way to hide them.
Hire a Buffalo Grove Bankruptcy Attorney.
Individuals should consult with experienced Buffalo Grove bankruptcy attorneys with questions regarding
bankruptcy protections for: 1) homestead; 2) insurances; 3) pensions; and 4) public benefits such as disability.