Bankruptcy

It is a fact of modern life that a majority of Americans now live with substantial debt. If you feel that your debt load has become insurmountable, it is important that you evaluate all of your legal options by contacting a bankruptcy attorney today.

Have you thought of filing bankruptcy? Did you have questions and couldn’t identify a trusted legal professional to turn to for the answers? Collin Law Offices P. C. can help you understand Title 11 of the United States Code, commonly referred to as the Bankruptcy Code.

Q: What is a bankruptcy filing?
A: Individuals can file for bankruptcy in a federal court under Chapter 7 ("straight bankruptcy", or liquidation) or Chapter 13 (a "reorganization", or a debt adjustment case). (Although individuals can technically file Chapter 11 bankruptcies, those filings are rare.) In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Some liens, however (such as real estate mortgages and car loans), survive. The value of property which can be claimed as exempt varies from state-to-state. Other assets, if any, are sold (liquidated) by the interim trustee to repay creditors. Many types of unsecured debt are legally discharged by the bankruptcy proceeding, but there are various types of debt that are not discharged in a Chapter 7. Common exceptions to discharge include child support, income taxes less than 3 years old and property taxes, most student loans (unless the debtor prevails in a difficult-to-win adversary proceeding brought to determine the dischargeability of the student loan), and fines and restitution imposed by a court for any crimes committed by the debtor. Spousal support is likewise not covered by a bankruptcy filing.
Another aspect to consider is whether the debtor can avoid a challenge by the United States Trustee to his or her Chapter 7 filing as abusive. One factor in considering whether the U.S. Trustee can prevail in a challenge to the debtor's Chapter 7 filing is whether the debtor can otherwise afford to repay some or all of his debts out of disposable income in the five year time frame provided by Chapter 13. If so, then the U.S. Trustee may succeed in preventing the debtor from receiving a discharge under Chapter 7, effectively forcing the debtor into Chapter 13.

Illinois bankruptcy exemptions (see chart below)

ASSET	EXEMPTION DESCRIPTION	LAW SECTION
HOMESTEAD	Real or personal property including a farm, lot and building, condo, co-op or mobile home to $7,500; sale proceeds exempt 1 year from sale	735-5/12-901, 735-5/12-906
	Homestead exemption after death or desertion of one spouse for benefit of remaining spouse and/or minor children - (Limit 7,500/7,500)	735-5/12-902
	Husband and wife may double	First National Bank v Mohr 515 N.E. 2d 1356 (App. Ct. Ill. 1998)
PERSONAL PROPERTY	Bible, family pictures, schoolbooks and needed clothing	735-5/12-1001(a)
	Health aids	735-5/12-1001(e)
	Motor vehicle to $1,200	735-5/121001(c)
	Personal injury recoveries to $7500	735-5/12-1001(g)(4)
	Proceeds of sold exempt property	735-5/12-1001
	Title certificate for boat over 12 feet	652-45/3A-7
	Wrongful death recoveries needed for support	735-5/12-1001(h)(2)
INSURANCE	Fraternal benefit society benefits	215-5/299.1a
	Health or disability benefits	735-5/12-1001(g)(3)
	Homeowners’ proceeds if home destroyed, to $7,500	735-5/12-907
	Life insurance, annuity proceeds or cash value if beneficiary is insured’s child, parent, spouse or other dependent	215-5/238
	Life insurance policy if beneficiary is insured’s spouse or child	735-5/12-1001(f)
	Life insurance proceeds if clause prohibits from being used to pay beneficiary’s creditors	215-5/238
	Life insurance proceeds needed for support	735-5/12-1001(f), (g)(3)
MISC.	Alimony, child support needed for support	735-5/12-1001(g)(4)
	Property of business partnership	805-205/25
PENSIONS	Civil service employees	40-5/11-223
	County employees	40-5/9-228
	Disabled firefighters; widows and children fo firefighters	40-5/22-230
	ERISA-qualified benefits	735-5/12-1006
	Firefighters	40-5/4-135, 40-5/6-213
	General assembly members	40-5/2-154
	House of correction employees	40-5/19-117
	Judges	40-5/18-161
	Municipal employees	40-5/7-217(a), 40-5/8-224
	Park employees	40-5/12-190
	Police officers	40-5/3-144.1, 40-5/5-218
	Public employees	735-5/12-1006
	Public library employees	40-5/19-218
	Sanitation district employees	40-5/13-808
	State employees	40-5/14-147
	State university employees	40-5/15-185
	Teachers	40-5/16-190, 40-5/17-151
PUBLIC BENEFITS	Aid to aged, blind, disabled, AFDC	305-5/11-3
	Crime victims’ compensation	735-5/12-1001(h)(1)
	Restitution payments on account of WWII relocation of Aleuts and Japanese Americans	735-5/12-1001(12)(h)(5)
	Social security	735-5/12-1001(g)(1)
	Unemployment compensation	735-5/12-1001(g)(1), (3)
	Veterans’ benefits	735-5/12-1001(g)(2)
	Workers’ compensation	820-305/21
	Workers’ occupational disease compensation	820-310/21
TOOLS OF TRADE	Implements, books and tools of trade to $750	735-5/12-1001(d)
WAGES	Minimum 85% of earned but unpaid wages; bankruptcy judge may authorize more for low-income debtors	740-170/4
WILD CARD	$2,000 of any personal property	735-5/12-1001(b)
	Includes wages	In re Johnson, 57 B.R. 635 (N.D. ILL 1986)

CONTACT AN ILLINOIS BANKRUPTCY ATTORNEY

If you are facing financial difficulties, you need the advice and assistance of an experienced and aggressive Illinois Bankruptcy attorney to protect your legal rights. Call Collin Law Offices, P.C. today at our Chicago office at (312) 263-1252 or at our suburban office in Berwyn at (708) 714-2266 and schedule a FREE CONSULTATION to learn more about how we can assist you.

We are considered a Debt Relief Agency as defined by the new Federal Bankruptcy Laws. We are committed to helping people find solutions to their financial problems, which may include the filing of a bankruptcy case.