When debt problems escalate to a level beyond your control, the last option you have is to file for bankruptcy. Illinois bankruptcy filings is also a common occurrence just like in other states. People file for either personal or business bankruptcy in one of the state’s three bankruptcy courts including the Central District, Southern District, and Northern District Courts. Both personal and business bankruptcy can alleviate one’s financial situation. However, they have some major drawbacks that you should be prepared for if you do decide to go for this route.
Personal bankruptcy in Illinois permits individuals to file for bankruptcy under either chapter 7 or chapter 13. In chapter 7 bankruptcy, your slate will be wiped clean, as all your debts will be removed. In exchange, however, your assets will be liquidated. Trusted appointees by the bankruptcy court of Illinois will take care of the sale and distribute the proceeds among the creditors.
Under the Illinois Bankruptcy Exemption Law, certain exemptions can be retained by the debtor. These include homestead of up to $15,000 for residential property, 85 percent of weekly earnings, $2,400 for one vehicle, 100 percent of personal properties (clothes, books, pictures, and so on), $1,500 in implements and tools of the trade, and up to $4,000 for any other personal property.
In the case of chapter 13 bankruptcy, the debtor is required to reorganize debts through a court-order payment plan that runs from 3 to 5 years. Some of the common causes of bankruptcy in Illinois are unforeseen medical expenses, divorce, job loss, and credit card debts. Any person can file for personal bankruptcy on his own. However, due to the complex nature of this process, it is advised that all individuals seek help from a competent and reliable bankruptcy attorney.
Bankruptcy is available for business through Chapter 9, 11, and 12. In Illinois, Chapter 9 bankruptcy is used for special cases for municipalities. Towns, cities, villages, counties, utility districts, school districts, and even a country can opt for this type of bankruptcy. This entails reorganization and proposal of plan of repayment.
Chapter 11 is a debt-restructuring plan for businesses and commercial enterprises. The debtor will be given 120 days to file a plan for payment reorganization after the order for relief. The purpose of this bankruptcy type is to help the business return to profitability.
Chapter 12, meanwhile, is specifically used by farmers and fisheries. Both independent farmers and fishers, as well as businesses on this field can file for this chapter. In Illinois, this is allowed for farmers whose debts do not go beyond $3,792,650 and for fisheries that do not exceed beyond $1,757,475.
Get Legal Help
Before considering bankruptcy in Illinois, spend enough time and effort in studying other options available. If you do decide to go for this route, make sure you have an experienced lawyer to guide you throughout the process.