Bankruptcy Law: Personal and Business Bankruptcy Cases
Oftentimes bankruptcy is the last in a long line of options that an individual or a business may wish to pursue to alleviate its debt. At O’Flaherty Law, our experienced bankruptcy attorneys will sit down with you in a free initial consultation to help you determine what the right course of action is for you. Although our offices are located in Downers Grove and Chicago, Illinois, our bankruptcy attorneys are happy to travel to you at your convenience.
We can help you or your business to renegotiate debt with your creditors, put an end to creditor harassment, or file for bankruptcy to discharge your debt and provide you with a clean slate. Should you choose to proceed in bankruptcy, we will ensure that you receive the full benefit of any applicable statutory exemptions. The federal Bankruptcy Code allows for certain property to be exempted from the bankruptcy, allowing you to retain your property rather than being liquidated. However, Illinois does not recognize the federal Bankruptcy Code’s list of exemptions. Instead, Illinois has its own list of bankruptcy exempt property, including your primary residence up to $15,000; personal property, such as your primary automobile, clothes, furniture up to varied amounts; insurance and public benefits; tools of your trade; and a few other categories of property.
Many worry that their credit scores will plummet post-bankruptcy and that it will be impossible to acquire new debt. Although it is true that your credit score will be affected after discharge of the bankruptcy, it becomes less significant as the years progress, and after 10 years the bankruptcy will be completely removed from your credit record. In the meantime, it is possible to build credit. Many banks offer pre-paid credit cards that do not require to be pre-paid after a certain period of time. Also, two years after discharge of the bankruptcy, many banks allow eligibility for mortgage loans and other secured loans. Additionally, within the bankruptcy case, you can choose to reaffirm certain debts with the approval of the creditor. Reaffirmation of a debt simply allows the debt to continue after the bankruptcy discharge. Reaffirming a debt does not change the interest rate or amount of each payment of the debt, but only is an option to continue paying off the debt to maintain credit.
Personal Bankruptcy
If you are an individual filing for bankruptcy, you (or you and your spouse) have two options. You can choose to liquidate your assets to eliminate all of your debt through Chapter 7 of the Bankruptcy Code, or you can retain some of your debt and pay it off in a consolidated repayment plan under Chapter 13 of the Bankruptcy Code.
Under Chapter 7 Bankruptcy, you will turn over all property that is considered non-exempt to the bankruptcy trustee who then liquidates the property to pay off creditors. Within roughly three to five months after filing for bankruptcy, you will receive a discharge of all dischargeable debts. Non-dischargeable debts, debts that will not be eliminated by bankruptcy, include taxes, student loans, child support and alimony, and a few other kinds of debts.
Under Chapter 13 Bankruptcy, the trustee will assist in creating a plan by which you can pay off your debts over a period of three to five years. This is usually a great option for individuals who have non-exempt property that they want to hang on to, but also have a consistent income in order to continue to pay the debt.
Business Bankruptcy
If your business is struggling, we can work with you to restructure your company’s debt through settlement with creditors, to properly dissolve and reorganize so as to avoid personal liability, or to liquidate or restructure your debt through bankruptcy. Businesses can file for Chapter 7 Bankruptcy or under Chapter 11.
A business can also file bankruptcy under Chapter 7 to liquidate all of its assets. The process is virtually the same as it is for an individual filing under Chapter 7.
Under Chapter 11 Bankruptcy, businesses are allowed to continue operating giving their owners a chance to pull out of the debt. This also gives the businesses’ creditors a chance to recover potentially more than they would receive than if the business was liquidated in a Chapter 7 Bankruptcy.
Should you be considering any of these options for yourself or your business, the bankruptcy attorneys of O’Flaherty Law can help you navigate the complex collection and bankruptcy process to give yourself the fresh start you have been looking for. Please contact us to schedule a free consultation.
In addition to bankruptcy law, we also offer a variety of additional legal services:
Business Representation | Civil Litigation | Criminal Defense | Family Law | Real Estate Law | Wills & Trusts
