Chicago Consumer Bankruptcy Lawyer

The Scoop on Bankruptcy
Bankruptcy is federal law. The United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States.”

Bankruptcy involves a legal declaration that an individual or organization is unable to pay its debts as they come due, and it is on the rise these days for obvious reasons: increasing debt loads due to credit card usage and home equity loans, falling property values, accumulating medical bills, lack of health insurance coverage, divorce, death, loss of a job, economic recession or poor financial decisions. It’s not easy keeping up with the high cost of living today when you have a family and other obligations.

Individuals and families are filing bankruptcy to get a fresh start - a start they deserve. This is actually a major tenet of the Bankruptcy Code: to give an honest debtor a fresh start by relieving them of most debts and to pay creditors to the extent the debtor has non exempt assets or income to do so.

Bankruptcy is federal law that directly affects almost as many people as the Internal Revenue Code. Consumer bankruptcy law is often complex and confusing, which is why you need effective representation in your time of financial need. Contacting a Chicago bankruptcy lawyer such as Jay F. Fortier, P.C. you will receive quality legal representation in a time of desperate need. We are here to help individuals and small businesses deal with Chapter 7 debt relief, Chapter 11 debt reorganization and Chapter 13 debt repayment. We offer compassionate legal advice during a time of high stress and straightforward solutions to solve your financial problems. If viable solutions other than bankruptcy exist for your financial problem we will let you know and make sure that you are fully informed.

If you may be facing a particularly difficult situation and are thinking about filing bankruptcy, know that you are not alone. At one time many people associated bankruptcy with something only desperate people did. However, there is no reason for negative connotations or stigmas surrounding bankruptcy to exist. Throughout the years many companies, celebrities and others who have gone on to achieve great and legendary success have sought bankruptcy protection.

Bankruptcy is simply an economic and financial management tool that is utilized by small business, individuals and families and by major companies with billions of dollars in assets alike. It is a perfectly legitimate and essential part of our modern economy. Still, although bankruptcy filings are public record, they are not generally published by newspapers and it is most likely that the only people who will know that you have filed for bankruptcy are you, your attorneys and your creditors. It is illegal to discriminate against a person based on a bankruptcy filing.

Also, bankruptcy will not make credit unavailable to you. Many people are able to purchase homes and vehicles while in bankruptcy or shortly after going through it. In fact, most people overestimate the importance of the effect that bankruptcy will have on their credit score. By the time that most debtors are ready to file for bankruptcy their credit score is already bad and filling may actually improve it over time. What bankruptcy really boils down to is a fresh start and a new opportunity in life without being encumbered by the pressure and disheartening load of unmanageable debt.

The federal Bankruptcy Code allows us, by filling your bankruptcy case, to stop all creditor collection activities such as lawsuits, harassment, garnishments, foreclosures and repossessions. In fact, you can stop creditors from contacting you even before you file simply by retaining us. When you file for bankruptcy creditors are forced to work within the bankruptcy court and its rules, and are subject to its decisions. The final results and costs of your bankruptcy, including the kinds and amounts of debt that will or will not be discharged, will then depend on the type of bankruptcy that you choose and on your particular circumstances. This is a major benefit to bankruptcy as opposed to non court sanctioned debt consolidation plans. Debt repayment plans entered into without the power of the court are almost always much more expensive than a bankruptcy, may include significant interest charges or require large upfront payments and leave creditors free to pursue other collection activities or to refuse the agreement.

However, there may be circumstances where bankruptcy is not available or is not the most desirable option. In those cases we offer to negotiate with creditors and to manage your debt repayment (debt negotiation/consolidation). We will advise you as to the best course of action to take and have included some basic information about the different kinds of bankruptcy on this page.

Chapter 7
Chapter 7 bankruptcy is known as straight bankruptcy or liquidation. It is a proceeding in which a debtor liquidates the debtor’s assets under Chapter 7 of the United States Bankruptcy Code. The debtor in a Chapter 7 proceeding may avoid paying his or her debts by obtaining a court order discharging those debts. Individuals and businesses may file for chapter 7 protection, although only individuals are eligible to receive a final discharge.

However, the final result of a chapter 7 case in individual and business cases are similar. An official called a trustee will administer the case. In a business situation the trustee will usually stop the operation of the business and sell off its assets to pay creditors. Any debt remaining would be effectively eliminated, although creditors might be able to collect from individuals who have accepted personal liability for business debts.

The trustee will also sell off the assets of an individual to pay his or her creditors when an individual debtor files for chapter 7 protection. However, the law provides many exemptions for individual debtors so that they are not left with nothing after a bankruptcy. These exemptions include, among other things, protection of home equity, retirement assets, vehicles and a wildcard exemption that can be used to protect almost anything. As long as your equity in a home or vehicle does not exceed certain limits and you continue to pay the secured mortgage or car note, if any, you can file for chapter 7 protection and keep your house and car. If you can’t pay the secured debt you can still give up the collateral and have the debt forgiven.

Most Chapter 7 cases involve no non exempt assets and go fast. You can get a discharge that eliminates all of your dischargeable debt forever in about four to six months. A Chapter 7 is ideal for people with unsecured debts such as utility bills, credit cards, medical bills and other unsecured loans. However, Congress has attempted to reform bankruptcy law and prevent abuses by restricting who is eligible for chapter 7 protection. Under current law the court may dismiss a case filed by an individual debtor with consumer debts if granting relief would be an abuse of the Bankruptcy Code. A debtor must file a statement as to whether abuse is presumed in the debtor’s case. Congress added to the Code a test for presuming abuse of the Code. Under the test, abuse is presumed if a debtor’s current monthly income less allowable expenses multiplied by 60 exceeds the lesser of (a) the greater of 25 percent of unsecured non-priority claims or $6,000, or (b) $10,000. 11 U.S.C. ß707(b).

You can file for chapter 7 protection and still keep your home, car, household goods and clothing and many other kinds of exempt assets. A husband and wife can file a joint petition at no additional cost. Let us help you sort your situation out. It will not look as bad when we are done helping you.

Chapter 13
Chapter 13 permits individuals with regular income to pay all or part of their debts over a period of three to five years under a plan that is approved by the court. Businesses are not eligible. Chapter 13 is a debt repayment plan that gives you as much relief and protection as possible while still providing for some repayment to creditors. It is an important alternative to chapter 7, especially for people who don’t qualify for chapter 7. You would likely prefer this option if you have non exempt assets or debt that is not dischargeable in chapter 7 such as student loans, taxes and government fines and are making good money, but cannot pay your debt. Chapter 13 is also an option for you if you are behind on your mortgage and want to keep the property out of foreclosure, have obtained a Chapter 7 discharge within the last few years or simply need to be relieved of debts you cannot discharge under Chapter 7.

Secured mortgages and car notes may be restructured to allow you to retain the property and continue making payments through the chapter 13 plan. Plan payments are made to the chapter 13 trustee and the trustee then distributes the payment to creditors according to the court approved plan. We will discuss a strategy and a repayment plan with you and offer a certain amount each month to the trustee based on your income and expenses. The repayment plans drafted under Chapter 13 last anywhere from 3 to 5 years and usually pay off only a fraction of existing debt. At the completion of the plan the debt will be discharged. During that period you are protected from creditors so long as you keep making payments. Creditors would need court approval to pursue any collection activities. You can most likely qualify if you have regular income and secured and unsecured debt within certain limits.

As your attorney I strive to make your payments affordable, allowing you to keep as much as you can and to pay for as short a time as possible. Give us a call; we have low flat fees, flexible payment plans and offer free consultations and quotes.

Chapter 11
Chapter 11 is a chapter of the United States Bankruptcy Code that allows for debt reorganization under the bankruptcy laws of the United States. It allows for the business owner to continue operating the business as a “debtor in possession” instead of having to turn the business over to a trustee as in chapter 7. The debtor is subject to the oversight and jurisdiction of the court, which has the power to grant the debtor full or partial relief from debts and contractual obligations. Creditors must pursue their claims through the bankruptcy court. The debtor in possession or creditors may propose a reorganization plan that must be confirmed by the court.

It is often difficult to confirm a plan since, in most cases, the creditors have to agree to the plan. This means that it is often difficult to emerge reorganized from chapter 11. Most chapter 11 cases end up as chapter 7 cases. That does not mean, however, that filing for chapter 11 bankruptcy is not a prudent choice. Chapter 11 is open to any business entity, sole business owner or individual. However, it is most often used by separate business entities. Individuals would most likely use it only if they do not qualify for chapter 7 or 13.

Business entities file chapter 11 when, as opposed to a chapter 7 liquidation, they want to continue operating the business and think that a restructuring with the protection of the bankruptcy court would allow them to emerge from bankruptcy to continue successful operation. Chapter 11 is generally the most complicated, time consuming and expensive kind of bankruptcy available to individuals and businesses. We recommend that you consult with your attorney about how to proceed if you are facing serious financial difficulties with your business.

Chapter 12
Chapter 12 is similar to chapter 13. However, it is designed for family farmers and fishermen with regular income and a substantial amount of income must be derived from these sources in order to qualify. Chapter 12 filings are relatively rare.

Chapter 9
Chapter 9 filings are also rare. Chapter 9 provides for the reorganization of municipalities.

Contact a Chicago Consumer Bankruptcy Lawyer

We are now offering consumer chapter 7 representation at a total cost to you of $1,200.00. This fee covers all of the costs of filing such as the courtís filing fee, credit counseling costs, credit reports, property valuations and tax transcripts. When all of the included costs are taken into account this is one of the lowest rates out there for quality full service representation. This is also our flat fee for debt negotiation/consolidation. In chapter 13 cases the majority of fees are paid by the trustee out of your predetermined plan payments. We file chapter 13 cases upon the receipt of $500.00, which covers an initial retainer, the court’s filling fee and costs of filling, such as credit counseling costs, credit reports, property valuations and tax transcripts. Consultations are free and flexible payment plans with no interest are available. Only $100.00 down to start. All other bankruptcy related matters will be handled based on any agreements that we come to after a free consultation.