Chicago Bankruptcy Lawyers & Attorneys

When you file bankruptcy, you will have to list all the people that you owe money to. This includes family members; this includes creditors that you wanted to keep, even your American express card. I often get asked can people list utility bills on their bankruptcy, and the answer is “yes”. If you are past due on the utility bill, you want to list that in your bankruptcy. Here’s why; anything that you owe prior to filing will be eliminated. Anything that you accrued from the date of filing forward, you will owe. So you can wipe out a significant amount of past due utility bills. Now, the utility company might require that you pay a security deposit, which is typically one and half times the normal month going forward to ensure you make future payments. But, if you are behind more than that on several utility bills, it is very wise to put those in your bankruptcy and get the best fresh start you can. Remember, anything you owe on an unsecured utility debt on the date of filing and going backwards, is eliminated. Anything you accrued from the day of filing forward you are on the hook for. So, since you are only going to be filing bankruptcy this one time hopefully, get the biggest bang for the buck, get the best fresh start you can, and list those utilities. I don’t care if it’s ComEd, Nicor, the garbage or the water bill. List those utilities if you are behind and get a great fresh start going forward. Please remember to make all of your required payments, on time, going forward.

If I file for bankruptcy will my job, will my employer, will my co-workers know? The answer is “no”, typically. The employers will not find out about a bankruptcy unless I need to notify them, and that will be in the case of a garnishment that I need to stop. So in those cases, yes, the employer or the payroll department will find out about the bankruptcy since I am required to send an automatic stay to stop any kind of garnishment that is pending on a client’s paycheck. But not to worry, many people file for bankruptcy, and employers are sympathetic to this and to the fact that you’re able to file for bankruptcy to stop a garnishment. Further, employers should be happy for you and it cuts down on the administrative paperwork that they have to do in turns of garnishing. So yes, your employer may know about it, only in times when I would have to stop a garnishment. But, for the overwhelming majoring of cases, your employer is not aware of your bankruptcy filing. Your co-workers are not aware of your bankruptcy and your neighbors are not aware of your bankruptcy. Someone would have to go down to the bankruptcy court, get on a public access computer and look up your name. Now how likely is that? Why would someone waste time to do that? And anyway, it is your federal right to file. You shouldn’t feel embarrassed, you shouldn’t feel shame. Everyone finds themselves in difficult situations in sometime in their lives. That is why the federal government put in bankruptcy laws to protect people, whether it be a Chapter 7 fresh start or a Chapter 13 bill consolidation case. You have to do what is best for you and best for your family going forward. So most people will not find out about your bankruptcy filing, but in the rare cases where they do, so be it. You have to do what is best for you, and if that means filing a Chapter 7 or Chapter 13, so be it.

I have clients that see me whose drivers license’s have been suspended for several different reasons. One, is that they haven’t paid their parking tickets or they have moving violations or in some cases, they were caught driving without insurance and they were involved in a motor vehicle accident. In many of those cases, the driver license suspension will be reversed. The most common type is when someone is driving without insurance and they get into an auto accident. There are several things can happen in that case scenario: A license can be suspend unless the individual either pays off the debt, works out an installment payment plan to pay off the debt, or file for a Chapter 7 bankruptcy. Provided it was only property damage not personal injury caused by dui, the driver license suspension will be lifted and the person will be given a fresh start.
In other cases, a Chapter 13 may be filed, to repay parking tickets, which are non-dischargeable. As long as the person is repaying those debts pursuant to a Chapter 13 repayment plan, the license will be unsuspended. Now if the person fails to complete the Chapter 13 or doesn’t repay the parking tickets, the license can be re-suspended. Then again, the most common type that I see is an auto accident, property damage only without insurance. A Chapter 7 bankruptcy will eliminate the debt, and it will undo the suspension of the driver license.

If someone owes back child support, filing a Chapter 7 bankruptcy case will never eliminate child support debt? Not only is it not dischargeable, but public policy tells us, that people should take care of their children. Child support is one of those debts that the government has deemed non-dischargeable. So, although you might be able to benefit with a Chapter 7 by eliminating a lot of unsecured debt, it will only free you up to pay the debts that are non-dischargeable such as child support. In addition to child support, another non-dischargeable debt is maintenance. Maintenance is spousal support and cannot be eliminate in a bankruptcy. So take advantage of the bankruptcy laws if you are struggling and eliminate what you can. However, just know that spousal support and child support are two (2) types of debts that will not be eliminated in a Chapter 7 bankruptcy.

What follows is a typical question that I hear practically daily.
If I file for bankruptcy, can I keep my 401k, pension, profit sharing or other retirement accounts? The answer is yes, provided those items are left in their proper nature as retirement accounts. For example, if it’s in a 401k account, if the pension is labeled as such, it will be protected. The problem comes when someone takes a 401k withdrawal and moves those funds into a working account. In that case, there can be an issue as to the character of the funds. No longer is it a 401k, now it has been converted into regular savings. So long as it’s kept in its proper character, 401k, retirement benefit, pension, and profit sharing items are protected in a Chapter 7 bankruptcy.

This is on the mind with every single individual that I work with. Credit is typically what got them into the situation, however, they can’t wait to get back into it. They are eager to get back into a credit situation. My answer to them is this: Yes, you will get offers for credit again. Immediately, yes, sometimes within six (6) months, sometimes within two (2) years. There are rarely good deals going forward from the beginning. I always recommend that a client wait six (6) months to two (2) years before they start to re-establish any kind of credit. They are going to receive offers that have annual fees, high interest rates, and other little things that will cause problems. I recommend a few things: Open up a checking account and link a debit card to it. Open up a secured credit card. This is where you put $250.00 or more into a bank account, and you have $250.00 worth of charging privileges. You are charging against your own money, that is why it is called secured. Eventually, once you show good conduct, that secured card can turn into an unsecured card. Then, once you start rebuilding your credit, more reasonable offers that are better deal for you will arrive. So yes, the good news is that there is credit after bankruptcy, the bad news, is that you will get it too fast and at too high of a price. So, hang in there. Go on a cash basis, just for a little while.
There is life after bankruptcy; you will receive credit; you can purchase a car, immediately after bankruptcy, and you can qualify for a decent mortgage after two (2) years. But be careful, you don’t want to be back in my office eight (8) years after the last case. You want to be home free, never having to file bankruptcy again. That means making smart decision going forward.