Schaumburg Bankruptcy Lawyer David Siegel Outlines The Petition

Chapter 7 bankruptcy involves the filing of a bankruptcy petition claims Schaumburg bankruptcy lawyer.  This bankruptcy petition contains all types of information regarding the finances and liabilities of the individual debtor.  The bankruptcy petition starts with Schedule A which has to do with real estate.  If a person owns any type of real estate, whether it be a single-family home, a townhome, even a timeshare, it must be listed in Schedule A.  The state of Illinois allows for a $15,000 exemption per person for real estate; thus, if it’s a joint filing, the two parties can protect up to $30,000 worth of equity in their real estate.  In reality, they can protect more than $30,000 worth of real estate because a Chapter 7 trustee would have to pay administrative costs to sell that property.  So there has to be more than $30,000 worth of equity for a trustee to even seek to try to administer that asset. 

Schedule B deals with personal property such as checking accounts, savings accounts, household goods, jewelry, furniture, electronics, life insurance, tax refunds, animals and any other type of contingent or liquidated assets.  Schedule C provides for the exemption which is where you keep the property and protect it was some sort of exemption provided for under state law.  In the state of Illinois, you can protect up to $15,000 per person in real estate.  You can also protect up to $4000 per person in miscellaneous personal property.  100% of your clothing is protected in the state of Illinois as is 100% of your 401(k) or other ERISA qualified pension, profit-sharing or retirement benefits. 

Schedule D deals with secured creditors such as real estate, vehicles and other items that are secured such as furniture, jewelry and electronics.  Schedule E deals with amounts owed to the government for state and federal taxes.  Schedule F is the most common schedule and that’s where you list all of your miscellaneous unsecured debt.  Schedule F is the place where you would put all of your credit card bills, medical bills, personal loans, past-due utilities and any other debts for some type of service.  

Schedule I deals with your income.  If you are filing a Chapter 7 bankruptcy case, you must provide paycheck stubs to your attorney who will then turn those over to the Chapter 7 trustee.  The information provided in those paycheck stubs must be listed on Schedule I as well as any other type of income that you receive.  For example, some of my clients have rental income.  Other clients have Social Security income or income from a pension, profit-sharing or retirement account.  Schedule I is the place where you would list all of your client’s income. 

Schedule J deals with monthly expenses.  This is where you would list everything from rent, utilities, food, transportation, auto payment, mortgage payment and any other debt or monthly payment that the client makes on a regular basis.  The difference between Schedule I and Schedule J determines whether or not there’s income available to fund a Chapter 13 plan or whether or not the client is eligible for a Chapter 7 fresh start. 

If the client has a surplus of income per month above and beyond his expenses, then there is a possibility that that person should really be in a Chapter 13 repayment plan.  On the other hand, if a debtor is either breaking even each month or losing money each month, that’s a sign that Chapter 7 is the appropriate Chapter and that person needs to get out of debt because they don’t have the ability to repay on a monthly basis. 

The Statement of Financial Affairs is another part of the bankruptcy petition where we list a series of information including income during the last three years from a job, income from other sources other than a job, whether or not there’s been any lawsuits over the last two years, whether or not the person has closed a bank account or had a bank account close on them, whether or not the person has lived at the same address for three years, whether or not the person has engaged in a business and whether or not the person has a safety deposit box. 

These documents comprise the majority of the Chapter 7 or the Chapter 13 bankruptcy petition and must be signed by the client under penalty of perjury.  Once the bankruptcy case is filed, the petition is submitted to the court and the creditors are listed and received a notice of the bankruptcy filing.  In addition to the creditors receiving a notice of the bankruptcy filing, the debtor and the debtor’s attorney will also receive such notice.  This notice contains the case number, the date, time and location for the meeting of creditors which is known as the court date as well as information regarding objecting to the debt or filing an adversarial complaint upon the debt.