Common Questions Concerning Bankruptcy

Dupage County Bankruptcy Attorney

For most people, filing bankruptcy is an unfamiliar process. If you are considering filing, you will undoubtedly have many questions. We have attempted to answer some of the more frequently asked questions here. For personal assistance with this important decision, contact the Law Office of Joseph P. Doyle. Our experienced bankruptcy lawyers will help you decide on the best course of action for you.

Will I qualify to file for bankruptcy?

Many people do qualify. Under federal law, a debtor must pass a means test to file a Chapter 7 bankruptcy petition. The means test is a two-step process. First, the debtor's income is compared to the median income for a family of that size in that state. Second, the debtor's "disposable income" is calculated by deducting certain necessary expenses (as determined by the IRS) from his or her income. If you earn more than the median income, it does not necessarily mean you are disqualified from filing. In that case, your disposable income is calculated, and whether or not you qualify depends on how much disposable income you have.

Will filing bankruptcy ruin my credit?

On the contrary, bankruptcy can provide a debtor with a fresh start and the opportunity to build better credit and a brighter financial future. Many people who file were in serious financial trouble to begin with. It takes some time to rebuild credit after bankruptcy, but it can be accomplished much sooner than you might expect. Our Dupage County bankruptcy lawyer will be happy to help you understand the consequences, and help you develop a winning strategy for repairing your credit after bankruptcy.

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 is usually the quickest and easiest form of bankruptcy. The debtor's non-exempt assets are surrendered and sold, and the proceeds are used to pay off creditors. However, in many cases, the debtor does not have any non-exempt assets to surrender. All debt collection efforts are immediately prohibited, and all eligible unsecured debts are discharged. Chapter 13 involves a reorganization of debt and a payment plan that can last from 3 to 5 years. Monthly payments are made to a bankruptcy trustee, who distributes the funds to creditors.

Will bankruptcy wipe out all my debts?

No, not all debts can be discharged in a bankruptcy. Child support, student loans, taxes from recent years and government or court fines are some examples of debts that may not be discharged. Most post-petition debts - incurred after you file - are not included in your bankruptcy.

Contact us for a free initial consultation. We will help you determine if filing bankruptcy is the right step for you.