Frequently Asked Questions
If you are considering bankruptcy, you probably have a lot of questions. It is important that you obtain as much information as you can to enable you to make an informed decision about what is best for you. Knowledge is powerful. Here is a list of some frequently asked questions to introduce you to the bankruptcy process.
Q: What is Bankruptcy?
A: It is a federal court process designed to help consumers and businesses eliminate or repay their debt. The two most common forms of consumer bankruptcy are Chapter 7 “liquidation” or Chapter 13 “reorganization.”
Q: What is Chapter 7 Bankruptcy?
A: Chapter 7 bankruptcy is a debt liquidation process in which most forms of consumer debts are discharged. Chapter 7 is frequently used by individuals with few assets and little or no disposable income, although there are some exceptions. Chapter 7 is designed to help people obtain a fresh start.
Q: What is Chapter 13 Bankruptcy?
A: Chapter 13 bankruptcy is a form of debt consolidation. It is most beneficial for individuals who have assets and a steady income. It is commonly used by people who are trying to prevent home foreclosure, vehicle repossession, or those who have assets they wish to protect. A plan is filed with the court which defines the terms of your debt reorganization. A steady source of income is required for Chapter 13.
Q: Can I file bankruptcy if I have previously filed?
A: Yes. If you have received a Chapter 7 discharge within the past 8 years, you must wait 8 years from the date your case was filed before you can file another Chapter 7. In this instance, you may consider filing a Chapter 13. If you have previously filed a Chapter 13 and received a discharge, you may file another Chapter 13.
Q: Can I file bankruptcy if my bankruptcy case was dismissed?
A: Yes. If you have previously filed a Chapter 7 or Chapter 13 and your case was dismissed, you may file a Chapter 7 or Chapter 13 depending on your goals and current eligibility.
Q: How much does it cost to file bankruptcy?
A: The filing fee for a Chapter 7 is $306.00 and $281.00 for a Chapter 13. Credit counseling course fees range between $30.00 ~ $50.00. Attorney fees are determined at the time of the free consultation.
Q: How can I afford bankruptcy?
A: When you consider the amount of money you’re paying with rising credit card interest rates, payday loan fees, garnishments, court costs and attorneys fees for judgment, repossession or foreclosure actions, and penalties, you will start to view the bankruptcy as an investment. Most clients don’t realize how much money is accruing in fees and costs. They are shocked when they discover that their balances have almost doubled because of fees and interest. Bankruptcy stops interest and fees from accruing on most debt once the case is filed.
Q: If I am married, does my spouse need to file?
No, your spouse is not required to file bankruptcy.
Q: Will filing bankruptcy ruin my credit?
A: No. Avoiding the problem may have a stronger impact on your credit than the bankruptcy filing. Although the bankruptcy remains on your credit report for 10 years, your credit begins to improve after your case is filed. You are moving in the direction of resolving the problem. All of the overdue debt you had on your credit report will be eliminated or reduced. Keep in mind, the most important factor in re-establishing your credit depends on YOU. As you continue to act responsibly, your credit score will increase.
Q: Will I be able to purchase a home or car in the future?
A: Yes. Many of my clients have purchased homes 2 years following their bankruptcy discharge, and a number of my clients have purchased vehicles within days of receiving their bankruptcy discharge.
Bankruptcy Experience That Works for YOU
Attorney Nella E. Mariani has more than a decade of experience in bankruptcy, debt relief, and bankruptcy litigation. Her practice focuses exclusively in bankruptcy and debt relief matters. She works closely with each client and provides them with a high degree of knowledge, professionalism and sensitivity.
If you need to speak to an experienced Illinois bankruptcy attorney, contact the Law Offices of Nella E. Mariani, P.C. to schedule your FREE CONSULTATION
Committed to making a positive difference in your financial future