No matter what your circumstances are, declaring bankruptcy is never an easy decision to make. If you do elect to take this step towards rearranging and resolving your financial troubles, there are a number of procedures and regulations you need to understand first—and perhaps more importantly, you should seek professional assistance before you start the filing process by yourself.
Filing for bankruptcy is a complex and lengthy process, so seeking help from a qualified attorney is usually an essential part of this endeavor. By working with a Lombard bankruptcy lawyer, you could put yourself in a much better position to stabilize your finances and potentially keep some assets as legally allowed exemptions.
Different Types of Bankruptcy for Different Situations
When people declare bankruptcy, they are petitioning to a federal court for relief from outstanding debts and obligations that they or their business cannot pay. Depending on the circumstances and the particular party filing, bankruptcy may involve liquidation of the filing party’s assets, or a reorganization of its finances that will allow the party to eventually repay at least some of their debts over a period of time.
Most individuals who file for bankruptcy petition for what is known as Chapter 7 bankruptcy. This is the most straightforward form of bankruptcy allowed for under federal law, as it involves a trustee selling all non-exempt assets an individual or business owns to pay as much of their debts as possible.
However, companies that reform under any name later on may still be liable for debts not discharged through Chapter 7 bankruptcy, and individual filers may have a great deal of difficulty rebuilding their personal credit after taking this step. One potential alternative option is Chapter 13 bankruptcy, which allows individuals and certain small businesses to set up a monitored payment plan for secured debts less than $807,750 and unsecured debts less than $269,250, while also allowing them to keep their current assets.
Larger businesses and individuals with larger debts may be able to file Chapter 11 bankruptcy, through which they can reorganize their financial structure and discharge certain debts with approval from a bankruptcy court without sacrificing control of their assets to a trustee. A Lombard bankruptcy attorney could discuss during a consultation which filing option would be best for a particular situation.
Exemptions Available for Bankruptcy Filers in Lombard
Illinois does not follow federal guidelines regarding what assets are exempt from liquidation when a resident declares bankruptcy. Instead, state law establishes different exemptions that apply to individuals and companies—and the law firms they retain—filing for bankruptcy in Lombard.
Some of the most commonly utilized exemptions allowed under Illinois state law include the following:
- Personal property like clothing and medical aids, as well as $1,500 in occupational tools and up to $4,000 in additional exemptions depending on the circumstances
- Up to $2,400 in vehicle equity
- Up to $15,000 of homestead equity for an individual, or $30,000 for a married couple filing jointly
- Tax-exempt retirement savings
- Up to 45 times the minimum hourly wage set by federal law, or 85% of gross earnings, whichever is higher
A Lombard bankruptcy lawyer could help maximize an individual’s exempt assets while helping him or her file for bankruptcy.
Talk to a Lombard Bankruptcy Attorney Today
Bankruptcy is a crucial financial tool for individuals and businesses with serious debt obligations, but filing for it is a complicated endeavor that can be tough for an inexperienced person to accomplish effectively. If you have reached a point where declaring bankruptcy seems like your best financial option, going through this process without legal guidance could be a big mistake.
Before starting any bankruptcy filing procedures, you should discuss your options with a Lombard bankruptcy lawyer to determine the best path to take in your situation. Call today to set up a consultation.