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Bankruptcy in the United States is a legal process in which individuals or businesses who cannot repay their debts to creditors may seek relief from some or all of their debts. In the city of Chicago, the United States Bankruptcy Court for the Northern District of Illinois has jurisdiction over all bankruptcy matters. Bankruptcy cases in the district are filed in the United States bankruptcy court in Chicago, and may fall under Chapter 7, 11, 12 or 13, depending on the specifics of the case.
Dealing with bankruptcy can be difficult and complex. A variety of legal and financial nuances are involved in this process. You may need a lawyer if:
Chicago's local bankruptcy laws include unique aspects that should be considered. Under local rules, you can protect certain assets from being sold to repay debts under a process called "exemptions", which include your home, car, and certain personal belongings. Unlike federal exemptions, Illinois requires you to use its state-specific bankruptcy exemptions.
That often depends on whether these assets are exempt from bankruptcy. If your home or car is not fully paid off, your ability to keep them depends on whether you can continue making payments on them.
Child support, alimony, certain tax obligations and debts incurred through fraud cannot be discharged through bankruptcy.
Chapter 7 Bankruptcy is often referred to as liquidation bankruptcy and may require you to sell some assets to pay back your debts. Chapter 13 Bankruptcy, on the other hand, allows you to repay your debts over a set period of time and retain your assets.
Bankruptcy has a negative impact on your credit and may remain on your credit report for up to 10 years. However, over time, and with diligent management of your personal finances, you can reestablish credit.
In general, you can file for Chapter 7 Bankruptcy once every 8 years. For Chapter 13 Bankruptcy, there is usually a 2-year period between discharges. However, complexities can arise and it's advisable to consult a bankruptcy attorney to guide you.
In addition to seeking a lawyer's help, you may also wish to reference resources from the following:
If you find yourself in need of legal assistance related to bankruptcy, you should consider hiring a competent bankruptcy lawyer. This will ensure that your case is handled in the most professional manner, and that you are counseled on all the relevant laws, regulations, and procedures. It also helps to get your documentation in order and update yourself on the recent changes in bankruptcy law.
