Illinois Bankruptcy Process Made Simple -

Your Step-by-Step Guide to a Fresh Start!

Not A Failure…A Fresh Start!

Covey Bankruptcy Law Firm, P.C.

Free Consultation

630-879-9559

Bankruptcy Overview

Filing for bankruptcy can be a scary and overwhelming process, especially if you're not sure what to expect. It's important to remember that bankruptcy is not a failure, but a fresh start. If you're struggling with debt and feeling overwhelmed, you're not alone. Over 1 million people file for bankruptcy each year in the United States. It can be a difficult decision, but for many people, it's the best way to get debt relief and move forward with their lives. If you're considering bankruptcy, try to remember that it's a tool that can help you get a fresh start. Always speak with an experienced bankruptcy attorney to get more information and determine if bankruptcy is the right for you.

The bankruptcy code is divided into two main sections: Chapter 7 and Chapter 13. Chapter 7 allows individuals to keep their possessions as long as payments are current and they have no equity after using the Illinois exemptions. Chapter 13 requires individuals to make payments to a trustee who in turn pays unsecured creditors a percentage of what they are owed. The repayment percentage ranges from 10%-100% depending on several factors.

Chapter 7 takes three months to complete and Chapter 13 is a repayment plan lasting three to five years.

11 U.S.C. Section 101: This section sets forth various definitions used in the Bankruptcy Code. For example, it defines key terms such as "debtor," "creditor," "property of the estate," and "insider."

About Your Free Bankruptcy Consultation

During your initial free consultation with our law firm, you will meet with attorney Brad Covey to discuss your financial situation and concerns. Your meeting can take place at one of our offices (Batavia, Wheaton, or Plainfield), via Zoom or telephone. The goal of the meeting is to come up with a plan to address your unique needs, which could include filing for Chapter 7 or Chapter 13 bankruptcy or exploring alternative solutions. While it may be helpful to bring proof of income and any court papers you have, it is not mandatory. The consultation is free. If the firm recommends bankruptcy and you agree to proceed, you will receive necessary disclosures, a fee agreement, a list of documents that are needed, and a client questionnaire to complete and return.

The Client Bankruptcy Questionnaire

It's completely understandable to feel overwhelmed when faced with a lengthy questionnaire. It can be a lot to process and you might not even know where to start. However, it's important to remember that the questionnaire is an important part of the process and the information you provide will be used to help find a solution to your unique financial situation. It might be helpful to take breaks and tackle the questionnaire in small chunks, or to ask us for assistance if there are parts that you're having difficulty with. It's also important to remember that you are not alone and that our law firm is here to support and assist you throughout the process.

Credit Counseling

Before filing for bankruptcy in Illinois, you are required to complete a credit counseling course. This can be done in person, online, or over the phone with an approved agency, such as www.DebtorCC.org. The counseling session will last around 1-2 hours and will discuss your debt, income, and expenses with a counselor. The counselor cannot prevent you from filing for bankruptcy and will not share any information with the court or our law firm. Completing the counseling session is a requirement for filing for bankruptcy. After you have filed bankruptcy and have a case number (23-00000) you must complete a second course in order to receive a discharge.

Proof of Income

When preparing to file for bankruptcy, we will need proof of all income in the household for the past six months and up to the date your case is filed, including pay stubs, social security payments, pension benefits, unemployment benefits, child support, and any other sources of income.

For self-employed individuals, rather than submitting pay stubs, it's necessary to furnish profit and loss statements for the previous six months. Creating a profit and loss statement is straightforward - you simply need to itemize your earnings and expenses on a monthly basis, including costs like gas, supplies, and rent. However, items such as depreciation and mileage should not be included in this statement.

Tax Returns

We will also need tax returns from the past four years for Chapter 13 bankruptcy, or the last tax return filed for Chapter 7 bankruptcy.

Bank Statements

Additionally, we need copies of all bank statements for the past six months and through the date your case is filed.

Driver’s License and Social Security Card

In order to confirm your identity with the court, we need a photocopy of your driver's license and social security card. If you do not have a social security card, a W-2 form will suffice.

Pre-bankruptcy

Before filing for bankruptcy in Illinois, it is important to stop adding to your debt and avoid making last-minute charges on your credit cards. This could be seen as fraud and raise suspicion among creditors, who may object to certain debts being discharged.

It is important to be open and honest with your lawyer and to pay basic expenses, including legal fees, and make some payments towards recent charges to show that you are trying to pay them back.

You should also avoid taking loans or withdrawals from exempt retirement accounts.

You should not show a preference for certain creditors or relatives by paying them before filing.

You should avoid hiding assets, transferring property, or giving away gifts before filing, as this could raise suspicion and cause problems in the bankruptcy process. 11 U.S.C. Section 548 governs fraudulent transfers and allows the trustee to avoid certain transfers of property made by the debtor prior to filing for bankruptcy. This provision is intended to prevent debtors from transferring assets to defraud creditors.

It is best to consult with your attorney and follow their advice to ensure a smooth bankruptcy process.

Case Preparation/Means Test

After you provide all the necessary information, we will use it to draft your bankruptcy petition and schedules. This process may vary depending on the type of bankruptcy you are filing Chapter 7 or Chapter 13 and how your Means Test turns out. During this process, we may reach out to you for clarification on the information you provided or request additional documentation. It is important to respond promptly to any communication from our law firm to ensure a smooth process.

If you are not in the habit of checking your email and voicemail please make an effort to do so while we are working together. When your case is ready, you will be notified and scheduled for a signing appointment, during which you will review and sign your bankruptcy paperwork.

11 U.S.C. Section 707(b): This section establishes a means test for determining eligibility for Chapter 7 bankruptcy. The means test compares a debtor's income to the median income in their state, and if the debtor's income is above a certain threshold, they may be required to file for Chapter 13 instead.

Signing Appointment

The final review of your bankruptcy case involves a meeting with attorney Bradley Covey, during which you will thoroughly review your bankruptcy documents and discuss any necessary modifications. The goal is to file the case with everything in perfect form.

After the paperwork is properly prepared, it will be filed electronically through the court's Electronic Case Filing system. The court will then assign a case number, a trustee, and a 341 Creditors Meeting date.

Automatic Stay

The automatic stay, which is an injunction that halts most collection actions by creditors, goes into effect as soon as the bankruptcy is filed and remains in effect until the discharge or until modified by a creditor.

The scope of the automatic stay is governed by 11 U.S.C. Section 362 of the Bankruptcy Code and stops most collection activity, but does not apply to proceedings for paternity establishment, domestic support orders, child custody or visitation matters, or dissolution of marriage unless it involves property division.

341 Meeting
(First Meeting of Creditors)

Filing for bankruptcy can be a daunting and intimidating process, but it is important to remember that you are not alone and that there are professionals who are here to help you through it.

One aspect of the Illinois bankruptcy process that may be causing you anxiety is the 341 meeting, also known as the first meeting of creditors. This meeting is held approximately 4 weeks after your bankruptcy case is filed and is presided over by a bankruptcy trustee. Section 341 Meetings are conducted over Zoom. So, you will come into our office and be with Attorney Covey during the meeting.

The trustee's role is to ask you a series of questions to verify the information in your bankruptcy documents and to ensure that the process is being carried out correctly.

It is normal to feel nervous about the meeting, but it is essential to remember that the trustee is not there to intimidate you or treat you rudely. In fact, most trustees in the Northern District of Illinois are attorneys who represent debtors in their practices.

It is important, to be honest and forthright when answering the trustee's questions and to remember that lying during the hearing is considered perjury and bankruptcy fraud, which are both felonies. If you are worried about any specific questions that may be asked, it is a good idea to discuss them with your attorney beforehand so that you are prepared.

The 341 meeting is typically the only court appearance you will have to make during the bankruptcy process. While it may seem intimidating, it is an important step towards achieving the debt relief that you need and deserve. With our help and a little bit of preparation, you can confidently face the 341 meeting and move forward toward a fresh start.

11 U.S.C. Section 341: This section establishes the meeting of creditors, which is a required hearing in bankruptcy cases where the debtor must appear and answer questions under oath. The meeting is typically conducted by the trustee assigned to the case and provides an opportunity for creditors to ask questions and raise concerns about the debtor's financial affairs.

Chapter 13 “Confirmation” Hearing

As part of filing a Chapter 13 bankruptcy, we create a plan to pay off some or all of your debts over a period of three to five years. About two months after the 341 Creditors Meeting your case goes in front of your judge for confirmation (approval) of the plan. The bankruptcy judge will consider factors such as whether the plan is feasible and fair to creditors before deciding whether to confirm it. If the plan is confirmed, the debtor must make the required payments according to the plan's terms. Once the debtor has completed all required payments, they will be eligible for a bankruptcy discharge, which releases them from liability for most dischargeable debts.

Discharge

After the 341 meeting, creditors have 60 days to object to the discharge or ask the court to deny the ability to discharge a particular debt. The United States Trustee's Office also has 60 days to file a motion to dismiss a Chapter 7 case for abuse, which may occur if they believe you have enough income to fund a Chapter 13 plan. All Chapter 7 cases are subject to dismissal for abuse based on the totality of the circumstances. If there are no objections after the 60-day period, you can receive a Chapter 7 discharge, while for Chapter 13, you must complete your plan payments over a 3 to 5-year period before becoming eligible for a bankruptcy discharge.

11 U.S.C. Section 523: This section establishes certain types of debts that are not dischargeable in bankruptcy, such as certain tax debts, debts arising from fraud or willful misconduct, and debts for willful or malicious injury to another person or property.

Section 11 U.S.C. § 524. This section of the bankruptcy code outlines the effects of a discharge in bankruptcy, which includes the discharge of a debtor's pre-bankruptcy debts and the related injunction against creditors from taking any action to collect those debts.

Start Fresh!

With a track record of success, Covey Bankruptcy Law Firm, P.C. has assisted numerous individuals in filing for Chapter 7 and 13 bankruptcy in Kane, DuPage, Kendall, and Will Counties. Our exceptional customer service, affordability, and flexible payment plans distinguish us from the rest. Take the first step towards a brighter financial future and get the peace of mind you deserve. Contact us today for a no-pressure consultation.

Call 630-879-9559 to begin your journey toward a fresh start.

About The Author

Bradley S. Covey is an experienced bankruptcy attorney with over 30 years helping individuals overcome financial difficulties in Illinois. Covey began his career in the military, serving in the army and later the Illinois National Guard before pursuing a career in law. He graduated from Northern Illinois University College of Law, where he studied bankruptcy law with a leading scholar in the field. Attorney Bradley S. Covey has dedicated his career to helping those who struggle with debt and financial setbacks and has earned the respect of the local legal community for his expertise in bankruptcy law.

In addition to his extensive experience in bankruptcy law, Bradley S. Covey is also an active member of the legal community. He is a member of the Illinois State Bar Association and the Kane County Bar Association. Attorney Brad Covey has been a speaker on bankruptcy law, having given presentations to legal associations. His expertise and dedication to the legal profession have earned him a reputation as a respected attorney.

Communicating With Our Office

It's important to keep in touch with each other during the bankruptcy process. Make sure to let us know if there are any changes to your contact information, such as your phone number, email address, or physical address.

We try our best to return phone calls within one business day and usually can return any outstanding calls on the same day we receive them. If you call and get voicemail, please leave a detailed message explaining the reason for your call.

If it's something that can be handled by our staff, they will be happy to assist you. If it's a legal question, you will need to speak with attorney Brad Covey directly.

It's crucial that you respond to any requests for information or questions from our office. If you receive something from us, please don't ignore it.

bradley.covey@gmail.com

Call us at (630) 879-9559

Text (630) 877-0586

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Batavia

Covey Bankruptcy Law Firm, P.C.

223 S. Batavia Ave.

Ste. 201

Batavia, IL 60510

630-879-9559