Illinois Bankruptcy Information

Of the two things that people fear most in life, death — according to researchers — is not one of them. The first fear is the catastrophic destruction of property through natural phenomenon like tornadoes or hurricanes and other events such as fire and flood. The second fear is having to file for bankruptcy.

Most people define “security” as being directly attributable to their social and financial capacity. Clearly, money really makes the world go around, and one can not live comfortably or securely without enough of it. For this reason, if you’re considering bankruptcy, it’s crucial for you to be exposed to Illinois bankruptcy information in order for the proper bankruptcy processes to be facilitated effectively. After educating yourself on Illinois bankruptcy information, you will find that filing for bankruptcy is a highly personal decision, and you should undergo a thorough process of weighing all your other options.

There can be serious repercussions when you choose to file for bankruptcy in Illinois. The first is that you must go through a supervised federal court process which can take – depending on the chapter of bankruptcy that you file – anywhere from four to six months, to five years. Secondly, although you’ve probably heard that bankruptcy destroys your credit forever, this is not true. Bankruptcy stays on your credit report for seven to ten years, depending on the credit bureau. Given that most people typically file bankruptcy in the event that they’re up to their eyeballs in debt, their credit is already in bad shape at the time of filing anyway. However, bankruptcy can prevent you from borrowing money from various creditors in the future. So, make sure to properly assess the pros and cons of your important decision on whether or not to file a bankruptcy in Illinois. The more you educate yourself on Illinois bankruptcy information, the better off you’ll be.

Through the proper understanding of Illinois bankruptcy laws, you may be able to avoid or stop garnishments, foreclosures, repossessions of your car or household goods, and the creditor harassment that comes with collection activity. In the right situations, filing for bankruptcy may be one of the best decisions you ever make. It can free you of the emotional stress and feelings of depression that are commonly associated with being trapped in situations of financial hardship.

It is also important to note that the bankruptcy laws have changed in the last decade, and not everyone who could file for a complete bankruptcy (Chapter 7) can now qualify. This is the reason why having the right Illinois bankruptcy information can spell the difference between debt freedom and disaster. For all its worth, Illinois bankruptcy information can be accessed very easily. One’s best bet is to consult a professional for a free evaluation of your case – an bankruptcy attorney who focuses on bankruptcy.

How to Handle Creditors During Bankruptcy

With all the preparation that comes with going bankrupt, it can be easy to forget a step or two. That’s a great reason to hire a bankruptcy lawyer to help you along they way if you happen to get frazzled and forget what to do. When you find the best bankruptcy lawyer for you be sure to keep their office number handy throughout the entire process. In most cases even if they cannot speak with you directly, a legal assistant or paralegal can answer questions about your case. While I was working as a bankruptcy paralegal one of the most common questions that clients called in to ask was “what do I tell my creditors that keep calling me?”

The answer is ultimately two-fold, depending on the type of creditor that is contacting you. Typically creditors fall into two categories: original and third party. An original creditor is one that your debt originally started with such as the credit card company or a hospital. Unfortunately, original creditors have a right to contact you by until the day your personal bankruptcy is officially filed with the court, and even the best bankruptcy lawyer can’t stop that. When and if they do contact you, it is typically beneficial to inform them that you have hired a bankruptcy lawyer and are in the process of going bankrupt. Don’t be surprised if they ask for the name and phone/fax number of your attorney to verify the information.

Sometimes original creditors feel that your account has gone too far without any payment and will choose to sell your account to another company to continue the collection process. These companies are known as third party creditors or collection agencies, and are a cause of stress before and during the personal bankruptcy process. In fact, some have said that the incessant calls from collection agencies are what finally made them decide to go bankrupt. The good news is that you, as a debtor, have certain rights that protect you from third party creditor harassment. The “Fair Debt Collection Practices Act” or FDCPA is a United States statute that was created to prevent abusive collection attempts. The FDCPA states that as soon as your hire an attorney in the pursuit of filing personal bankruptcy, collection agencies lose the right to contact you. If they continue to do so contact your bankruptcy attorney immediately to see if possible sanctions can be filed against them for violating your rights.

If you are currently experiencing multiple creditor phone calls a day, be sure to note who is calling and whether they are an original creditor or a collection agency; No matter which type of creditor it is, going bankrupt can help. Once you have found the best bankruptcy lawyer for your case be sure to tell them about the calls you are receiving so they can evaluate whether or not your FDCPA rights are being violated. Remember, you have rights as a debtor and you should never feel bullied by your creditors.

10 Clever Cost-Cutting Measures to Avoid Bankruptcy

Times are tough.  Non-business bankruptcies filed in federal courts in 2010 totalled 1,593,081, up 8.1 percent from 2009.  If you live in fear of bankruptcy, now is the time to take control in the areas of your life over which you still have power.  Financial problems won’t go away overnight, but taking action empowers you to get on track.  You can always complete chapter 7 bankruptcy forms or chapter 13 bankruptcy forms before you meet with bankruptcy lawyers, but you may try cutting expenses in creative ways — it’s easier than you think.

Below is a list of common expenses identified by financial experts and credit counselors.  Many of us throw our money into these expenses without giving it a second thought.  Consider the three items on which you spend the most money – these are the areas you need to cut before looking for bankruptcy help.  If you commit yourself to cutting back, these 10 tips could help you budget to avoid bankruptcy.

1. Entertainment

This includes dining in restaurants, attending movies and going for drinks, to name a few.  These extracurricular activities are pricey and are luxuries you can do without, or you could compromise from time to time by trying the following:

Consider staying in and watching movies or playing multi-player video or board games with family or friends.  Host a pot-luck dinner where everyone brings a dish and shares the expense.  You can feed more people for less when you cook from scratch.  Everyone needs time away from the house, so seek outdoor activities or community events that are free. You can typically find these listed on your municipal home page or local radio station’s site.  If you have saved enough to splurge on seeing a movie in theatre, only go on “reel deal” night.  Many theatres have reduced ticket prices one night each week; contact your local theatre for information.  Catching a movie for less once every month or so is a good compromise – just be sure to avoid the overpriced concessions counter!
Cutting back on your entertainment budget will be a key part of your new strategy to avoid bankruptcy.

2. Clothing

There’s really no excuse to pay full retail price for brand name clothes. There are many stores that offer deeply discounted designer lines, and box stores that cater specifically to people on a tight budget and want to look stylish.  Do you live near a consignment shop?  You can buy new or gently used brand name clothes for a very small percentage of the retail price.  Another great option for families is to invite close friends, relatives and neighbors with children to come together for a clothing swap.  Kids outgrow clothes before they have a chance to wear them out, so rather than lose the investment altogether, trade them for another child’s unworn or gently used items.  Depending on how close the relationships are, the adults might be interested in trading from their closets, too.
Clothing and shoes are necessities, but once you get accustomed to making room for only the essential items, your clothing budget will no longer be a contributor to your risk of declaring bankrupt.

3. Coffee/ Specialty Coffee

Coffee drinkers are known to splurge on their daily “fix.”  This typically runs anywhere from $1-5 per cup, depending on where you buy it. That can add up to $20-100 per month.  Many workplaces have tea and coffee available for the staff at break periods – take advantage of that perk! If the office beverages are not to your liking, bring you own packages of herbal tea or a favorite coffee roast from home. This way, you can enjoy your “fix” for pennies a cup.

4. Work Lunches

When it comes to work, pack your own lunch and healthy snacks.  It’s healthier for your wallet and might benefit your waistline, too.  Grabbing $10-20 of cafeteria food or take-out each day will cost you upwards of $50-100 per week, or $200-400 per month.  You can do without that expense.  If you have school-aged kids, get them involved too!  They will feel good about helping to bring positive changes to the family.  From now on, you’re all going to “brown bag” it.
Cutting non-essentials such as take away lunches and specialty coffees from your list of approved expenses is an effective budget tip to avoid bankruptcy.

5. Cabs

Like take-out lunches, cabs only appear “essential” when you didn’t take the time to plan ahead to make other arrangements.  If you cannot walk to your destination, leave earlier so you can make your connections on the bus or subway.  If public transportation isn’t available in your area, carpool with a coworker, or ask family or friends to give you a lift.

6. Transportation

Public transit is smart, efficient and cost-effective compared to the costs of owning and maintaining a vehicle.  If you require a vehicle for your job, take turns carpooling with a coworker to cut fuel costs by half. I live in an rural area where there are no busses, so I had to get creative to cut transportation costs.  I save all my errands and run them at once.  I’ve let my friends and family know that if they are considering getting me a gift for my birthday or holidays, I’d love the gift of gas cards for topping up my tank at the service station.

In addition to using public transportation and carpooling to cut transportation costs, you may also need to consider purchasing a less expensive vehicle, or reducing the number of family vehicles to one.  The key to success when budgeting to avoid bankruptcy is to compromise wherever possible.

7. Beauty products/ makeup

Department store brands are beautiful but they fall squarely in the luxury category.  You can’t justify paying high-end prices when you’re cutting expenses.  I learned in university that the best value can be found in popular drugstore brands.  Drugstores carry a huge assortment of beauty products that do a great job and are gentle and animal cruelty-free. Most drugstores have great loyalty rewards programs, so you earn deep discounts or free products as you shop over time.  Win-win!

8. Gym membership

If you have a membership you don’t use, find out if you can give it up early or transfer it to another person.  If you’re going on vacation, ask if you can get a refund for the time your membership will not be in use.  Do a quick online search to find free fitness clubs and classes in your area, and spend more time outdoors.
Luxury items such as high-end makeup and gym memberships are usually among the first things to be stricken from a budget when an individual is facing filing bankrupt.

9. Groceries

Food costs are high, but there is a lot of competition among grocery retailers that will benefit you if you do your homework.  In addition to strictly avoiding high-end and overpriced grocery stores, your best bet is to spend time at home with sales flyers and make a grocery list of bargains you find – and only buy what is on your list.  Also, if there are no coupons in your sales flyers, every grocery store has coupons posted in a highly visible area.  Make use of them!

10. Rent

Everyone needs a roof to sleep under, so this may call for a compromise. To find ways to subsidize your rent or mortgage costs, get a roommate.  Do you have a spare room that could bring in extra cash?  If not, begin looking for a cheaper place, or a place that will lower costs for you in other areas.  This can include lower rent or mortgage costs, lower heating costs, or a better transit system so you can leave your car at home and save the costs of fuel and regular wear and tear on your vehicle.
Food and housing costs are essential items in your budget and now you have strategies to empower you to get these expenses back on track. Taking the time to plan your meals around sales in the flyers will help you cut food expenses in your budget and downsizing your housing or sharing housing costs with another tenant are compromises that could divert you from scheduling a meeting with bankruptcy lawyers.

Commit yourself to cutting back, and integrate the above 10 tips into your budget to avoid bankruptcy.

Credit Card Bankruptcy

It is not hard to believe that credit card debt is the most common type of debt that Americans face today. Credit cards have been a standard in our society for decades and if used correctly they can be truly helpful; but sometimes, despite the best of intentions, credit cards may lead to a slippery slope of overwhelming debt. For that reason credit cards are one of the main reasons individuals in American choose to go bankrupt, even though there is not technically a type of bankruptcy called a “credit card bankruptcy.” The staggering interest rates, minimum payments, and high credit lines are, in some cases, a recipe for financial disaster. Declaring bankruptcy can typically eliminate unsecured debt like credit cards in slightly different ways depending on whether a chapter 7 vs. chapter 13 is filed.

Chapter 7 bankruptcy is commonly used to wipe away unsecured debt. Credit card debt is classified as unsecured because ultimately there is no collateral against the items purchased on the credit card. In other words, the credit card debt is not tied to a single item like a vehicle or a home, but to the various purchases made with the credit card. When an individual files Chapter 7 bankruptcy they will list all of their creditors on the bankruptcy paperwork, or petition, in order for the creditors to be notified of their decision. Then, if the bankruptcy court decides to approve the Chapter 7 bankruptcy, a discharge notice will be sent to those same creditors stating that the debt has been eliminated by the debtor filing bankruptcy. Because bankruptcy is governed by federal law, the discharge is not something that credit card companies can just ignore.

Chapter 13 bankruptcy takes care of credit card debt in a different way, but achieves the same overall goal: finding financial freedom through becoming debt free. Chapter 13 bankruptcy utilizes a repayment plan where qualified debtors are allowed to pay back a portion of their overall unsecured debt over the course of 3-5 years. The payment plan is based on the debtor’s income, total debt, and other variables depending on their specific situation. Bankruptcy lawyers work closely with both the debtor and the Chapter 13 bankruptcy trustee to find a monthly payment amount that will work for everyone involved. By the end of the 3-5 year Chapter
13 payment plan the debtor will typically be debt free and caught up on all secured monthly payments like vehicles and home.

Since the bankruptcy laws were revamped in 2005 there is no such thing as only filing on 1 or 2 credit cards. In most cases any debt listed on the debtor’s credit report is listed on the bankruptcy paperwork to be potentially eliminated. Credit card debt can go from manageable to overwhelming in a matter of days, so taking control of the situation quickly is crucial. Filing bankruptcy isn’t the answer for everyone, but if you are facing an amount of credit card debt that you cannot see yourself coming out of in the next few years then looking into bankruptcy may be something to look into.

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