In Illinois, you can apply for both Chapter 7 and Chapter 13 Bankruptcy as an individual consumer.
Bankruptcy in Illinois does not discharge some debts, including most back taxes, child support, alimony, most student loans, penalties or fines, and purchases greater than $550 made within 90 days of filing bankruptcy, or cash advances greater than $825 made within 70 days of filing bankruptcy.
To file for Chapter 7 bankruptcy in Illinois and have your debts erased, you must pass a means test. Under the test, if you make less than the median income for an Illinois family, you may file under Chapter 7. For singles, the median income in Illinois is $45,941 per year. $59,838 is the median income for a family of two, $71,075 for three persons, and $81,175 for four persons.
Before you file Chapter 7 bankruptcy in Illinois, you will need to undergo credit counseling approved by the state, as well as complete any unfiled income tax returns.
Once you meet the minimum requirements for filing personal bankruptcy in Illinois, your attorney will need to file a Statement of Financial Affairs with your local Illinois bankruptcy court. Your Statement of Financial Affairs will include a list of all your debts, both secured (such as mortgages or car loans) and unsecured (such as credit cards and medical bills). You will also need to include names and contact information for all your creditors and an itemized list of your personal property and assets. The filing fee for Chapter 7 bankruptcy in Illinois is $299.
Pursuant to Illinois law, if you have less than $15,000 worth of equity in your house, you may file a homestead exemption and stay in your home. If you have more than $15,000 in equity, however, you may lose your house.
Likewise, if you have less than $2,400 in equity in your car, you will generally be allowed to keep it. If you have more than $2,400 equity in your car, you may still be able to keep it if you pay your Illinois Chapter 7 bankruptcy trustee the difference between the value of your car and the amount of equity you current have in it. If you still owe money on your car, you will be required to reaffirm the loan within 45 days of filing for bankruptcy in Illinois.
Under Illinois bankruptcy law, you may also keep the following: your family photos, clothing, health aids, school and professional books, retirement plan, disability payments, workers’ compensation benefits, Social Security benefits, unemployment payments, wrongful death settlements that you need in order to support your family, and up to $15,000 in miscellaneous personal property.
If you have extra income that would allow you to repay your debts, you may want to file Chapter 13 bankruptcy. When you file Chapter 13 bankruptcy in Illinois, you will establish a payment plan with the approval of the court and may be able to keep all of your personal property.