Bankruptcy FAQ

BANKRUPTCY FAQ

1. WHAT EXACTLY IS A BANKRUPTCY?
Bankruptcy is a federal created program designed to help consumers eliminate their debts or repay them under the protection of the bankruptcy court.

2. WHAT ARE THE MOST COMMON REASONS FOR FILING A CHAPTER 7 BANKRUPTCY?
The most common reasons for consumer bankruptcy are: unemployment, high medical expenses, over-extended credit, marital problems and other large unexpected expenses.


3. CAN I KEEP MY HOUSE, CAR & PERSONAL BELONGINGS IF I FILE A CHAPTER 7?
You can keep your house and your car as long as there is no equity in the house or vehicle and you are current on your loan payments, if any. In most cases you are able to keep all of your personal belongings. Illinois law allows you exemptions to protect most property from creditors. Consult an attorney at Leeders & Associates, Ltd. to discuss how the Illinois bankruptcy exemptions can protect your belongings.

4. CAN I KEEP ANY CREDIT CARDS OR FINANCED ITEMS?
Generally you cannot keep your credit cards. However, some creditors will let you keep your credit cards or financed items if you reaffirm the debt and make payments to that creditor after your bankruptcy is discharged.

5. DO YOU HAVE TO HAVE A CERTAIN AMOUNT OF DEBT TO FILE?
There is no statutory amount of debt that is needed to file a bankruptcy.

6. WHAT TYPES OF DEBT ARE NOT ELIMINATED IN A CHAPTER 7?
Non-dischargeable debts such as student loans, parking tickets, government debts, child support and alimony, some IRS debts and fraudulent debts. Some exceptions do apply. Consult with a Leeders & Associates, Ltd. attorney to find out your legal rights.

7. WHAT ARE THE MOST COMMON REASONS FOR A CHAPTER 13 BANKRUPTCY?
The most common reasons to file a Chapter 13 bankruptcy are: stop foreclosure, save your car, save your business, debt consolidation, repay student loans, IRS debt and other non-dischargeable debts and for those who have filed a Chapter 7 Bankruptcy in the last 8 years.

8. WHAT IS THE DIFFERENCE BETWEEN CHAPTER 7 & CHAPTER 13?
Chapter 7 is designed to eliminate unsecured debts. Chapter 13 is designed to repay your creditors and keep your assets such as your car or home based on your ability to repay your debts. A Chicago bankruptcy attorney from Leeders & Associates, Ltd. can help you choose which chapter is best for you.

9. WILL I EVER GET CREDIT AGAIN?
After your bankruptcy is discharged you will be able to get credit again. Often you are able to finance a vehicle as soon as your bankruptcy case is discharged. You are able to apply for and get credit cards and personal loans once you receive your discharge. Qualified applicants are able to buy homes within 1-2 years of receiving their bankruptcy discharge.

10. HOW LONG DOES A BANKRUPTCY STAY ON MY CREDIT REPORT?
A Bankruptcy may remain on your credit report for 10 years after your bankruptcy case is discharged. However, you may be able to get credit during that time.

About Author

Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.

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