Bankruptcy
Chapter 7 and Chapter 13
708-442-5599
What is Bankruptcy?
Simply put, Bankruptcy is the legal process of reducing or eliminating your debts through the Federal Courts.
As you may know, we provide a free consultation and financial case review with potential clients. We have these consultations to answer common bankruptcy questions, clarify what bankruptcy can do, and help you determine whether bankruptcy is the best course of action to take in your specific circumstances. Thankfully, as a boutique firm, we can give you our full attention; in fact, you’ll meet with a lawyer, not a paralegal or other staff.
But if you’re not ready to meet with us, this remainder of this page will cover the most common bankruptcy questions. Hopefully the answers will help you decide whether or not to move forward to the next step.
Frequently Asked Questions About Bankruptcy
What Can Bankruptcy Do For Me?
As a proceeding governed by federal law, bankruptcy gives you a legal way to find a fresh start financially. It can help you stop wage garnishment, stop foreclosure or repossession of certain properties, and reverse or prevent utilities termination. It also gives you a means to challenge the debts from fraudulent or overreaching creditors.
At the beginning of the process, the court will issue an automatic stay, i.e., all actions that are attempting to collect any debts are stopped. When the bankruptcy process is completed, your debt is discharged, meaning the legal obligation to pay all or most of your debts is eliminated and creditors cannot seek payment for them.
Is It True Bankruptcy Cannot Wipe Out All Of My Debts?
Unfortunately, that may be the case. In most bankruptcy cases, the following debts are considered non-dischargeable:
- Alimony and certain other divorce-related debts.
- Child Support.
- Certain taxes.
- Court restitution orders.
- Criminal fines.
- Debts incurred after filing.
- Liens by secured creditors, ie., certain debts backed by a mortgage or other pledge of collateral that mean the creditor has the right to pursue after default of payment.
What Is a Bankruptcy Chapter and How Do I Know Which to File For?
Chapter refers to the organizational references inside the Bankruptcy Code containing the laws governing bankruptcy proceedings. Thus, “chapter” becomes the shorthand to refer to specific kinds of bankruptcy. What income you make and what kinds of debt you owe determine what, if any, type of bankruptcy is right for you. The following kinds of bankruptcy pertain to personal cases:
- Chapter 7 – This is considered the “fresh start” bankruptcy. It involves property liquidation, i.e., selling assets to pay off part or all of your debt.
- Chapter 11 – This is normally reserved for businesses and handles the restructuring of the company.
- Chapter 13 – This is the “payment plan” bankruptcy. You and your attorney create a 3 to 5 year plan to pay back as much of your defaulted debt as possible while still maintaining a nominal quality of life.
Do I Really Need a Lawyer? What do I Need to Know to Meet With One?
While in some situations you may be able to file without an attorney, we don’t recommend it. That’s not just because we’re a bankruptcy firm! The forms and fine print associated with bankruptcies can be a mire at the best of times, and you may accidentally give away rights and properties that you don’t need to because you don’t specialize in bankruptcy law. Don’t make the decision to represent yourself lightly.
When you make an appointment to have a consultation, we will remind you of exactly what you need to effectively determine if you should file for bankruptcy. However, some common questions we’ll need the answers to are:
- Are you at risk of foreclosure, repossession, attachment of bank account, wage garnishment, or discontinuation of utilities service?
- What types of debt are giving you the most problems or are the hardest to pay off?
- What are your significant assets?
Am I Going to Lose All of My Property?
In almost all cases the answer is “no”. In a Chapter 13 bankruptcy, none of your property is claimed by the court or creditors. In a Chapter 7 bankruptcy, items that are non-exempt may be claimed by creditors for liquidation. Exemptions are determined by state law, and we can discuss what exemptions may apply to you during a consultation.
Does That Mean I Can Never Own Anything Again?
Of course not! While it’s true that for some time getting new credit cards or other lines of credit will be more difficult, a bankruptcy puts you in the position to rebuild your credit. Be sure to take a look at our free guide to find out more.
What Does It Do to My Credit?
While a bankruptcy does clear your debts, it also stays on your credit report for a long time — up to 10 years. What that means in terms of long term affect on your credit will depend on how your credit stands when you file and how much of your debt can be discharged or paid off. Remember, bankruptcy gives you a clean slate to rebuild your credit with.
How Much Does Bankruptcy Cost?
Our attorney’s fees are something we discuss in our consultation with you.
However, in terms of court fees, both Chapter 7 and Chapter 13 cases usually cost about $300. Keep in mind, laws may change and fees may be adjusted over time. During our consultation we can tell you what the current total of court fees is.
What Else Should I Know?
Within the 180 days before you file for bankruptcy, you need to complete budget/credit counseling from an approved agency. Finding an approved agency is much easier than finding an approved agency that is also a good agency. Like bankruptcy, the debt management plans sometimes offered by these agencies aren’t right for everyone, and may make your situation worse, resulting in bankruptcy anyway. If you’re not sure which way is up, we’re qualified to give you legal advice based on your situation. Let us help!
After your case is filed, you’ll be required to complete a second course on personal finances from an approved provider. This is something we can help you select as a course of our service to you.
Public utilities services (e.g., electric, water) are not permitted to refuse or cut off service during or due to bankruptcy.
Employers, government agencies, and entities involved with student credit are not permitted to discriminate against you because you have filed for bankruptcy.
If one of the debts being considered from discharge involves a co-signer, discharging that debt for you may shift sole obligation for that debt to them. However, their personal assets are not at risk as a part of the bankruptcy process.
If you could not pay the fees assessed by a court for damages resulting from an accident and therefore lost your license, you can have your license back as a part of the bankruptcy proceedings. Please note: Bankruptcy cannot restore your license if it’s been revoked for other reasons.
Do I Have to go to Federal Court?
In most cases, the only proceeding you attend is the Meeting of Creditors. This meeting is for the court-appointed trustee and any creditors that choose to attend to inquire into your submitted forms and financial situation. The meeting does not take place in a courtroom but online over Zoom and the Judge is not present.
If there are any complications or disputes, or if one of the parties is suspected of fraudulent action, there may be a hearing. We will inform you of whether or not you need to make any court appearances and other details should that situation arises.
Professional Assistance for a Future You Can Trust
At Schottler & Associates, we’re here to help you through an infinitely difficult time. Bankruptcies can disrupt more than just your finances. Come in for a free consultation and we can help you determine if this really is the best course of action for you.
We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the Bankruptcy Code.
This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship
Every Client and Every Bankruptcy Case Is Different
Schottler & Associates has extensive experience in Bankruptcy Law. We pride ourselves on being able to educate our Chicagoland clients and walk them through the process of Chapter 7 or Chapter 13 Bankruptcy. We understand that each case is unique and requires a personalized approach.
If you’ve found yourself in a difficult situation, such as arising from Illness, Loss or Work or Divorce, having an experienced attorney on your side can help. We can prepare you for what to expect and work with you and the courts to make the process as smooth as possible.
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