When considering bankruptcy as an individual (as opposed to a corporation) you have three primary options: Debt Negotiation, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Our Lisle Bankruptcy attorneys will assess your personal financial situation, educate you on your options, and help you determine which option is the best for you. 

Debt Negotiation

Hiring our Lisle bankruptcy attorneys to renegotiate your debt may be your best option if you have less than $15,000.00 in debt, or assets that you are afraid in losing in the bankruptcy (see our article about keeping property in bankruptcy).  A good attorney can often convince your creditors to significantly reduce the amount of your debt and/or allow you to execute a payment plan whereby you pay back your debt over time.  Typically, the longer the duration of the payment plan, the smaller the amount by which creditors will be willing to reduce your debt. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a great option if you have more than $15,000.00 in debt, you do not have assets in excess of the amounts that are exempt from collection in bankruptcy, and you are not making an excessively high income.  In a Chapter 7 Bankruptcy, your dischargable debt (basically everything but student loans and tax debt) will be wiped out, and you can usually keep your house and cars.  

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is appropriate for individuals who are not qualified for a Chapter 7 Bankruptcy due to their income level or who have assets in excess of the exemption amounts that they would be in jeopardy of losing in a Chapter 7 bankruptcy.  Unlike a Chapter 7 bankruptcy, your debts are not wiped out in a Chapter 13 bankruptcy.  Rather a plan is approved by your creditors and the court to pay off the majority of the debt over the course of 3 to 5 years.  Chapter 13 bankruptcy is a tool to buy you time to pay your creditors. 

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Most people who file for Chapter 7 bankruptcy are able to discharge their debts while keeping their house and their cars.  Whether you are able to do so depends on how much equity you have in the property in question. When you file for bankruptcy an attorney, called a bankruptcy trustee, is appointed to review your case and assess whether you have assets that can be collected for the benefit of your creditors. However, certain amounts of particular types of assets are exempt from collection by the trustee.  The following are the most important exemptions

• $15,000.00 of equity in your primary residence ($30,000.00 for a married couple filing jointly); 
• $2,400.00 of equity in your vehicles ($4,800.00 for a married couple filing jointly)
• A $4,000.00 exemption can be applied to any property of your choice ($8,000.00 for a married couple). 

If your equity in your house or vehicle is below these exemption amounts, you will be able to keep the assets after filing for bankruptcy.  Even if you have slightly more equity than these exemption amounts, you will still likely be able to keep the asset.  When deciding whether to collect an asset, the trustee must account for the costs associated with the transaction (like realtor fees and closing costs) as well as the trustee's own fees for his or her efforts in collecting the assets.  If, when these costs are taken from the non-exempt value of the asset, there would not be much value left over to pay creditors, the trustee is unlikely to pursue the asset. 

Shortly after our Lisle bankruptcy lawyers file you bankruptcy petition, we will appear with you at a meeting called the "First Meeting of Creditors."  This name is misleading, as creditors almost never attend these meetings.  

‍The First Meeting of Creditors is a brief meeting between the bankruptcy trustee (a lawyer appointed by the court to oversee your bankruptcy case), your attorney and yourself.  The trustee will review your schedules and ask you a series of questions regarding your assets, liability, income and expenses.  The meetings typically take about 10 minutes and are very low pressure.  

The trustee will begin by asking a series of preliminary questions:

• The trustee will confirm your identity with a photo ID and your social security card.  
• The trustee will swear you in and put you under oath. 
• The trustee will ask if you reviewed your schedules before they were filed and ask you to confirm that the schedules are true and correct.  
• Finally, the trustee will ask if you have reviewed certain required notices provided to you by your attorney regarding the bankruptcy process and the alternatives to bankruptcy. 

‍Once the record has been established, the trustee will ask a series of questions about your finances and your schedules.  You can read a transcript of the bankruptcy trustee's usual questions here. 

‍​Usually, the meeting goes very smoothly.  If all goes well, the trustee will enter a finding that you have no non-exempt assets available for collection on behalf of your creditors and recommending that your debts be discharged. 

After this finding, your case will be closed after a brief period during which creditors can object to the discharge (which they almost never do).  

Read more about the First Meeting of Creditors.