The decision to declare bankruptcy is no doubt a difficult one. The concern for most people is what consequences bankruptcy will have on their credit score. To avoid any surprises that may arise as a result of declaring bankruptcy, Illinois residents must understand the affects bankruptcy may have on their future credit. Joliet, Plainfield, and all other Will County residents, considering bankruptcy, should first take into account its possible effects.
Filing for bankruptcy can cause your credit score to drop and may prevent you from obtaining credit after filing. If a lender is willing to accept your credit application with a lower credit score, the terms of the acceptance are likely to be less favorable than that of someone with better credit. It is important to keep in mind that the type of bankruptcy you choose to file will determine how long the bankruptcy will remain on your credit report. Chapter 7 bankruptcy will remain on your credit report for ten years after you file, whereas Chapter 13 bankruptcy will remain on your credit report for seven years after the bankruptcy is completed.
A bankruptcy on your credit report signals a red flag to creditors. However, the amount of damage that will be done to your credit score will depend on your credit score before your bankruptcy is filed. After the case is filed, you can begin rebuilding your credit score back up.
Bankruptcy can certainly have a detrimental effect on your credit. However, failure to file may result in your debts reaching the credit card company’s collections department, which will also negatively impact your credit score. It is also worth keeping in mind that as soon as your bankruptcy is completed, and you get your finances in order, you can rebuild your credit score. In other words, the devastating effect of bankruptcy can be repaired by maintaining a positive payment history after you get through the bankruptcy process.
If you are a Joliet, Plainfield, or other surrounding Will and Grudy County resident considering filing for bankruptcy, and are wondering whether doing so will affect your future credit, contact an experienced bankruptcy attorney at Hamilton & Antonsen, Ltd. For more information and a complimentary consultation, call 815.729.9220.
Rebuilding Credit After Bankruptcy
One of the biggest questions and concerns when filing for bankruptcy is how it will affect your credit score in the future. After filing bankruptcy in Illinois, your credit score will go down, there is no getting around that. Often, if you are considering filing for bankruptcy, it is likely that your credit score is already low, so the bankruptcy might not have a severe impact. However, after filing for bankruptcy, there are ways to rebuild your credit and set yourself up for future financial success.
Often, individuals who file for bankruptcy are worried that there will be no way to rebuild their credit after a Chapter 7 or Chapter 13 discharge. This is not correct. After a bankruptcy discharge, potential creditors might think that you are in a better position for financial obligations than before your discharge. It is not unlikely for individuals to receive credit card offers or even offers to finance a new automobile purchase. Therefore, you should not avoid bankruptcy to “protect your credit rating.” A bankruptcy is a huge decision and will affect your overall credit, but it should not be avoided in fear of future financial obligations.
Re-Establishing Credit After Bankruptcy
A bankruptcy will stay on your credit report for 10 years. This should not be a deterrent to filing, though. Late payments, foreclosure, and repossessions also have a negative effect on your credit rating and report. One of the purposes of bankruptcy discharges is to give you a “fresh start” and get back on your feet.
After filing for Chapter 7 bankruptcy, you are able to re-establish credit after you receive your discharge. Generally, you will receive a discharge about 60 days after filing the case. This means that after discharge you can start applying for different lines of credit. Some credit may be harder to obtain, such as a home loan or larger credit cards. If you reaffirmed any debt during the bankruptcy, such as a home mortgage or automobile loan, the payments that you continue to make will reflect positively on your credit score. Over time, more lines of credit will be available to you as long as you make payments on time.
Re-establishing credit after a Chapter 13 bankruptcy is a little different. Chapter 13 bankruptcies take anywhere from 36 to 60 months to complete. After the bankruptcy is confirmed, creditors are allowed to report negatively about you to different credit reporting agencies. The creditor does not need to report that you are paying as needed, but there will be a record of your bankruptcy instead. Any reaffirmed debt will continue to be reported to the credit reporting agencies. The court can grant permission for new credit during the Chapter 13. You may seek lines of credit without permission after your Chapter 13 case is discharged.
If you are considering filing for bankruptcy and have questions about the process, Hamilton & Antonsen, Ltd. can help. The Joliet bankruptcy attorneys have years of experience in filing bankruptcy petitions and helping you build a better credit future. Contact us today to have any of your questions answered.
Chapter 7 vs. Chapter 13 Bankruptcy
If you are considering filing for bankruptcy, there are many factors to take into account. Bankruptcy can be a strategic financial move to give you a fresh start at rehabilitating your credit score and creating a successful financial future. There are different types of bankruptcy available in Illinois. Deciding which type of bankruptcy is best for your situation is important. Two of the more common types for individuals are Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
Chapter 7 is the most common type of bankruptcy filed. Chapter 7 is a way to discharge your debt, allowing you to start over. Essentially, your debts are “wiped out.” Not every debt is dischargeable. Student loans, child support, and most tax debt are just a few of the types of debt that are not dischargeable through Chapter 7 bankruptcy.
Chapter 7 bankruptcy begins with filing a petition. This petition lists your assets and debts. You will receive notice of a §341 meeting, of the First Meeting of Creditors. In the §341 meeting, you will meet with a United States Bankruptcy Trustee who will ask you questions about your petition and financial situation. The trustee is making sure you are not hiding any assets that could be used to pay off debts. 60 days after the §341 meeting, as long as there are no assets found by the trustee, you will receive a discharge of debt. Once you receive your discharge, you are able to start rebuilding your credit and building a financial future.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a plan in which you pay back some, or all, of your debts over a three to five-year period. You and your attorney will devise a plan by looking at your assets, finances, and expenses to determine a monthly payment to creditors. A petition is filed, as well as the Chapter 13 Plan. Payments under the plan must start within 30 days after the case is filed. The plan must be approved by the court. The plan outlines which creditor receives what portion of the monthly payment. Payments are made to a trustee, who will then distribute the proper portion to the creditors. After the term of the plan is up, remaining debts are discharged.
Which Type of Bankruptcy is Best for Me?
Determining whether you should file a Chapter 7 or Chapter 13 bankruptcy is not a decision to be taken lightly. Your assets, financial situation, and expenses must all be accounted for in determining which to file. Both Chapter 7 and Chapter 13 have their benefits and drawbacks. The timing of the plans and the protections afforded by both are huge considerations in determining which type of bankruptcy is best for you.
If you are considering filing for bankruptcy, Hamilton & Antonsen, Ltd. wants to help you. We have the experience and knowledge to inform you of your options and the consequences of each choice. The Joliet bankruptcy attorneys have a proven track record of advocating for their clients. Contact us today to set you up for future financial success.
A married couple living in Joliet or Will County, Illinois who is considering filing bankruptcy and divorce will have many factors to consider determining which they should file first. These factors include how much property needs to be divided, how much debt the couple has and what type of bankruptcy the couple plans on filing. Bankruptcy courts also treat income differently based on whether a person is married, separated or single.
If a married couple living in Will County, Illinois qualifies for a chapter 7 bankruptcy, the most prudent course of action would be to file bankruptcy before filing for divorce. By filing jointly the couple will save money on bankruptcy filing fees, the attorney fees will be shared, and all debts will be addressed under one bankruptcy case saving time and money.
Another factor a married couple in Illinois will want to consider is that Illinois allows married couples “double exemptions” when filing, meaning each spouse may claim the full exemption amount for any property individually owned by that spouse. If the couple owns a lot of property this Illinois “double exemption” policy may be the best course of action.
If the married couple living in Will County does not qualify for a chapter 7 bankruptcy, then a chapter 13 bankruptcy may be a better option. A chapter 13 lasts longer, which will delay the divorce for up to 3-5 years, in contrast a chapter 7 bankruptcy may only delay the divorce for 90 days.
If you are a married person in Joliet or Will County Illinois considering filing for divorce and bankruptcy and want some advice on which to file first, contact Hamilton and Antonsen at 815.729.9220 to set up a free consultation.
Written By: Michael Pollock
Filing for bankruptcy can be a difficult thing to do. When you are filing in Joliet or Will County, Illinois, knowledge of the debts that may be dischargeable in the process is important to know, as it can contribute to your decision to file.
In Illinois, there are two types of bankruptcies that you can file – Chapter 7 and Chapter 13. If you file a Chapter 7 bankruptcy in Will County, Illinois, the following debts are not dischargeable: 1) back child support, alimony obligations and other debts related to family support; 2) debts for personal injury or death caused by driving while intoxicated; 3) student loans unless paying them back would be an undue hardship; 4) fines and penalties for violating the law which include but are not limited to traffic tickets and criminal restitution; 5) All income tax debts including income tax debts within the last 3 years; 6) debts due to fraud , theft and embezzlement and ; 7) debts you fail to list in your bankruptcy. If you file a Chapter 13 bankruptcy, which is when a debtor creates a plan to repay creditors, the same debts listed above will need to be paid in full in your plan. If these debts are not paid, they will remain at the end of the case.
The bankruptcy process can be a bit confusing, but there is no need to worry. If you are in Joliet or Will County, Illinois and are faced with the difficult decision to file for bankruptcy, you do not have to go through it alone. Contact Hamilton & Antonsen, Ltd at 815.729.9220 to set up a complimentary consultation.
An Illinois resident living in Will County or Joliet who is not behind on their bills but never feels like they are gaining any ground may consider filing for bankruptcy. However, many people assume that if you are not behind on your bills you either cannot file for bankruptcy, or filing for bankruptcy would not be advantageous for their situation. However this may not be the case.
Bankruptcy laws exist to help individuals struggling to pay bills. An Illinois resident who has stayed on top of his/her bills may still qualify. In order to file chapter 7 bankruptcy a person must pass the means test. The means test takes a person’s average income over the six months prior to filing and deducts that person’s monthly expenses from the income. What remains is disposable income. If the disposable income is too high, a chapter 7 is not likely.
However, while a high income may seem like a blockade to filing bankruptcy in Will County, Illinois without being behind on your bills, the more accurate way to determine an individual’s chapter 7 availability is to look at their debt to income ratio. A person who is not behind on their bills but has a sizeable debt compared to their average salary over the previous 6 months may find filing for chapter 7 advantageous.
Filing for bankruptcy can be a difficult decision for an individual or a family alike. If you or someone you know lives in Joliet or Will County Illinois who is not behind on their bills but may benefit from filing for bankruptcy contact Hamilton & Antonsen at 815.729.9220 to set up a free consultation.