Illinois Bankruptcy

Planning for an Illinois bankruptcy is essential. All types of cases are protected by an automatic stay after filing a petition. Thereafter, qualification for each chapter is different, as is the relief available. All issues concerning exemptions, forfeiture of assets, if any, legality of past conveyances, and qualification are properly consider before selecting a particular chapter. The options currently available to individuals domiciled within the state are:

Illinois bankruptcy under Chapter 7 remains the most popular chapter today for individual debtors because it eliminates debts quickly and does not require full or partial payments. With reform looming on the horizon since 1994, new restrictions are expected at any time which will eliminate chapter 7 options for all individuals who receive a salary equal to or above the state median income level.

Illinois bankruptcy under Chapter 11 is the preferred choice for large corporations and wealthy individuals. In exchange for an expensive administration, more lucrative options and benefits are available. Ch. 11 filings decreased nationwide since 2001, while all other chapter filings increased steadily both in number and as a percentage of the general population.

Illinois bankruptcy under Chapter 12 applies only to family farmers. Because of the seasonal nature of crops, special provisions allow reorganization payments to be tailored to harvests.

Illinois bankruptcy under Chapter 13 availability requires regular monthly income. Subject to ceilings placed on total debt, employees and others who earn regular income may reorganize payments, terms, and interest rates, as well as discharge the remaining portion of debts upon completion of a plan.

Selecting the correct chapter to maximize results may seem to be a daunting task. The process of selection necessarily begins with familiarity with current laws. Because laws change frequently as new decisions are rendered, local attorneys who are familiar with the practices of each judge are an ideal source of information.

Restrictions on Illinois Bankruptcy Lawyers

Special restrictions apply to Illinois bankruptcy lawyers according to the rules of procedure adopted by Illinois bankruptcy courts. Attorney fees and filing fees are also subject to regulation. For more information, see:

• Illinois bankruptcy lawyers
• bankruptcy fees for attorneys
• filing fees

Reform of the availability of federal debt relief is now under consideration by the U.S. Congress. A new "abuse prevention act" is expected to pass into law at any time. Included within proposed regulations, Ch. 7 will not be available to many individuals, Ch. 13 payments will increase, judges will lose discretion on individual cases, and mandatory new penalties and fines will be imposed in new circumstances, and become mandatory upon the motion of any creditor. New laws under consideration were proposed primarily by lobbies representing commercial lenders.