Gary R. Garretson
James M. Durkee
Attorneys at Law
1802 N. Division St., Suite 201, Morris, Illinois
(815) 941-2825
Fax: (815) 941-2840
E-Mail: ggarrets@hotmail.com.
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Gary R. Garretson James M. Durkee Attorneys at Law 1802 N. Division St., Suite 201, Morris, Illinois (815) 941-2825 Fax: (815) 941-2840 E-Mail: ggarrets@hotmail.com.
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What is Bankruptcy? Bankruptcy is a legal remedy provided by the United States Constitution to help people with their financial problems. Contrary to the common myth that Bankruptcy will destroy your credit forever, it provides a way for people in serious financial trouble to get a fresh start toward building a good credit history by eliminating or minimizing their current indebtedness. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law. There are four types of bankruptcy cases provided under the law: Chapter 7 is known as ''straight'' bankruptcy or ''liquidation.'' It requires a debtor to give up property which exceeds certain limits called ''exemptions'', so the property can be sold to pay creditors. Chapter 11, known as ''reorganization'', is used by businesses and a few individual debtors whose debts are very large. Chapter 12 is reserved for family farmers. Chapter 13 is called ''debt adjustment". It requires a debtor to file a plan to pay debts (or parts of debts) from current income. Most people filing bankruptcy will want to file under either chapter 7 or chapter 13. Either type of case may be filed individually or by a married couple filing jointly. Chapter 7 (Straight Bankruptcy) In a bankruptcy case under chapter 7, you file a petition asking the court discharge your debts. Chapter 7-Discharge All of Your Debt The majority of all bankruptcies are filed under Chapter 7. A Chapter 7
bankruptcy will eliminate most unsecured debts, such as credit cards, utility bills, medical bills, personal
loans and debts owed on a repossessed car. Chapter 13, is for people are still earning enough money to pay some or all of their debts, but because of unusual financial circumstances cannot meet all of their current obligations. In essence it is a Court ordered debt consolidation, that is primarily used to help people catch up on house and car payments, on which they have fallen behind. Current bankruptcy law require that if you have a higher income you can be required to file a Chapter 13 bankruptcy petition. What Can Bankruptcy Do for Me? Bankruptcy may make it possible for you to: Eliminate the legal obligation to pay most or all of your debts. This is called a ''discharge'' of debts. It is designed to give you a fresh financial start. Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.) Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed. Stop wage garnishments, debt collection harassment, and similar creditor actions to collect a debt. Restore or prevent termination of utility service. Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe. What Bankruptcy Cannot Do: Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to: Eliminate certain rights of ''secured'' creditors. A ''secured'' creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay the debt. Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, student loans, court restitution orders, criminal fines, and some taxes. Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the co-signer may still have to repay all or part of the loan. Discharge debts that arise after bankruptcy has been filed. Who Should Consider Bankruptcy? You should seriously consider filing for bankruptcy if you are falling behind on your monthly bills because of loss of employment, divorce, illness or just plain over-extension, are taking cash advances on one credit card to make payments on another credit card, using your savings to pay your current bills, or are being harassed by creditors or collection agencies at home or on the job. Call Now We Can Help If you have additional questions or are interested in starting a bankruptcy, call us at the number below to schedule a free consultation. Do not wait to be sued by creditors or until a creditor is garnishing your check. Act now before your mortgage company files a foreclosure suit against you.
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Garretson Law Office Call Today (815) 941-2825 or E-Mail Us at ggarrets@hotmail.com
Evenings and Saturday Hours Available by Appointment Our Attorneys are Admitted to Practice by: Illinois Supreme Court; United States District Court, Central District of Illinois, Northern District of Illinois (Member Trial Bar); and United States Supreme Court
Disclaimer: The information provided here is to be used as general information only and is not intended to suffice as legal advice upon which you can rely for your particular situation. In the event you have specific questions, please call us or another qualified attorney.
Author: Gary R. Garretson.
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