Bankruptcy Debt Relief
We are a DEBT RELIEF AGENCY under Federal Law 11 U.S.C. 527.
We help people file for Bankruptcy debt relief under the Federal Bankruptcy Code.
Bankruptcy offers the opportunity to obtain debt relief from most unsecured debt, and to get a fresh financial start on life. Any number of personal and professional circumstances can lead to bankruptcy. Tomei Law provides legal counsel for Chapter 7 and Chapter 13 bankruptcy for clients in Lake County, Illinois and its collar counties. We help our clients protect their assets and personal property from creditors. We can prevent or stop garnishment of your wages or other income.
During a time of financial stress, filing for bankruptcy can seem overwhelming, especially considering the social stigma of those who file for debt relief. Creditors have done a good job making those hit with financial difficulty feel humiliated and shamed in the eyes of their family, friends, and neighbors.
The shame associated with debt relief often times clouds the judgment of the debtor, delaying the engagement of legal counsel until it’s too late. If you have fallen on financial hardship, you must ask yourself, how many of the following apply to you?
- Your mortgage payments are behind, or you’re in foreclosure
- Car payments are late and your automobile could be repossessed at any moment
- Creditors and bill collectors are calling constantly
- You’ve been threatened with lawsuits, or some have been filed
- You fear opening the mail and/or hate to answer your phone
If you answered “yes” to any of these, then bankruptcy could be the solution. Chapter 7 (debt liquidation) or Chapter 13 (debt reorganization) under the U.S. Bankruptcy Code will stop collections activity as soon as you file, which means you can without stress answer your phone or check your mailbox. Worried about losing property? In most cases, you can keep all the belongings which you worked so hard to obtain.
Chapter 7 Bankruptcy Debt Relief
More commonly known as “total liquidation” bankruptcy, under a Chapter 7 petition, debt can be discharged when payments become impossible to meet. Unlike in the Chapter 13 Debt Repayment plan context, a Chapter 7 bankruptcy petition does not involve the filing of a plan of repayment. Instead, in order to pay off debtor’s creditors, the bankruptcy trustee will gather and sell the debtor’s nonexempt assets, using the proceeds to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
Some of the debtor’s property may be subject to mortgages and other liens that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property, e.g., a car; but the trustee will liquidate the debtor’s remaining assets. Thus, debtors should be aware that filing a petition under Chapter 7 may result in the loss of some property.
When the debtor is eligible, a Chapter 7 petition can serve to completely rid you of all of your debts. If you are routinely skipping payments, using one credit card to pay another, receiving harassing phone calls or have been sued by creditors that want to collect on a debt, it is time to take action. Chapter 7 offers relief from medical bills, credit card obligations, personal loans and other unsecured or even secured debts. Keep in mind however, a Chapter 7 filing is not for everyone.
Please refer to the following self-test to see if you pre-qualify for Chapter 7 debt relief.
1. Is your monthly income above the Illinois State Median?
|Family Size||Annual Gross Income||Monthly Gross Income|
|Family of 1:||$46.522/ 12 mon =||$3,877.00|
|Family of 2:||$58,647/ 12 mon =||$4,887.00|
|Family of 3:||$67,328/ 12 mon =||$5,611.00|
|Family of 4:||$79,138/ 12 mon =||$6,595.00|
2. BEFORE paying any of your credit cards, do you have money left over after you pay your monthly bills?
If you answered NO to either one of these questions, you may qualify to file for Chapter 7 debt relief. Please contact our office for further information.
DISCLAIMER: Attorney makes no guarantees and does not otherwise warrant that the above figures concerning means testing are up to date. Please refer to the Department of Justice for further information: http://www.justice.gov/ust/eo/bapcpa/20131115/bci_data/median_income_table.htm.
Chapter 13 Debt Reorganization
Chapter 13 bankruptcy is a repayment plan used to manage debt. Debt is restructured and consolidated into one monthly payment paid over a period of time. A Chapter 13 bankruptcy filing may be an option when a Chapter 7 filing is not. A Chapter 13 bankruptcy, also known as debt consolidation, enables individuals with a regular source of income to develop a plan to repay all or part of their debts.
Under Chapter 13, debtors provide a proposal discussing the parameters of a creditor repayment plan. This plan is designed to pay back creditors in installments over a three to five year span, time frame of repayment dependent upon the debtor’s current monthly income. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During the repayment schedule, the Bankruptcy code provides the debtor “automatic stay” protection which forbids creditors from starting or continuing collection efforts.
Further Debtor Protections
The Fair Debt Collections Practices Act, or the “FDCPA,” states that a debt collector cannot engage in or even threaten to take any illegal actions when attempting to collect a debt. Examples of illegal actions can include harassment, calling a neighbor or relative and discussing the debt with them, contacting your employer, threatening jail time and threatening wage garnishment, among other things.
If a debt collector violates the FDCPA, you can turn the tables and file a lawsuit against them and collect $1,000 per FDCPA violation! To make it even better, the FDCPA allows for recovery of your reasonable attorney fees. It’s one of the few laws in existence that have such a provision. Think about that, you end up with a free attorney if you have an FDCPA claim. The debt collector pays this office’s fee or we simply do not get paid.
If you are considering filing a lawsuit against a debt collector, please take note of the utmost importance of creditor harassment documentation. It can become very difficult to successfully pursue a claim against a creditor without proper documentation evidencing creditor violations. It is one thing to allege that a creditor is harassing you with hundreds of phone calls a week. It is quite another to document each of these phone calls by recording the date, time and person calling.
Documentation goes beyond phone calls however. Be certain not to throw away collection letters so they may be used against the creditor if you choose to pursue a claim. Although it can be annoying and stressful when a creditor contacts you by phone or by written correspondence, properly documenting a creditor’s behavior can help build a strong case.
If you are considering bankruptcy or are being routinely harassed by creditors, please contact Tomei Law, P.C. either on-line, or by telephone at (847) 596-7494 in order to schedule a free initial consultation.