Joliet Bankruptcy Lawyer David M. Siegel

In the state of Illinois, you, as an individual debtor, can protect up to $15,000.00 worth of equity in real estate.  If you are filing a joint bankruptcy case, you and your spouse can protect up to $30,000.00 worth of equity in real estate.  As far as vehicles go, you can protect up to $2,400.00 worth of equity in one motor vehicle as an individual.  If you are filing jointly, you and your spouse can protect up to $4,800.00 of equity in one motor vehicle. 

In addition to the real estate and the auto exemption, you also have in the state of Illinois a $4,000.00 wild card exemption which can be sprinkled over any type of personal property.  In a joint case, this amount doubles to $8,000.00 worth of wild card exemption that could be sprinkled over any personal property. 

Thus, people typically keep their house and car and all of their personal property when they’re filing a bankruptcy Chapter 7 to get out of debt.  They simply have to continue to make the mortgage payment and the car payment.  Otherwise, those items would either be foreclosed or repossessed just as if there wasn’t a bankruptcy case in the first place. What bankruptcy will do is eliminate the unsecured debt from your life in full forever, such as medical bills, credit card bills and personal loans and other services. 

Bankruptcy is probably the only thing that I would recommend for someone who is struggling financially and who needs a fresh start.  There are alternatives to bankruptcy, such as working out a payment plan with a creditor or going into some sort of debt consolidation plan.  However, in my experience as a bankruptcy attorney, I have seen too many clients who have come to my office after a failure with a debt consolidation company.  

Debt consolidation companies attempt to pay your creditors less than what’s fully owed in exchange for a release of the debt.  However, debt consolidation is not mandated under any federal law and creditors do not have to accept the payment plan.  If you get into a situation where some of your creditors are accepting the payment plan while others are not accepting the payment plan, the ones that are not accepting the payment plan have the right to sue you. 

Many people have seen their balances not go down even though they’ve been in debt consolidation for several years.  A lot of their fees got eaten up by the debt consolidation company and it didn’t go to the creditor.  In other cases, one creditor opted out and started a lawsuit or a garnishment to the point where the client couldn’t make the payments anymore to the debt consolidation company. 

In recent years, the debt consolidation companies have been sued by different states’ attorneys because they were taking their fees prior to paying out anything to the creditors. 

What bankruptcy does is it eliminates the debt in full under Chapter 7.  There is no option to pay back a portion of the debt under Chapter 7.  It is just simply eliminated in Chapter 7 in full.