​What is a Consumer Chapter 7 Bankruptcy in Illinois?


Chapter 7 is often known as “straight” bankruptcy or “liquidation.”  It requires an individual to give up property that is not “exempt” under Illinois and applicable federal laws, so that it can be sold to pay unsecured creditors.  Assuming the consumer was truthful in statements and schedules filed with the court and completed certain requirements under bankruptcy law, a consumer can except to receive a “discharge” of his or her personal liability to certain creditors.



How Does a Consumer Chapter 7 Work in Illinois?


In a Chapter 7 bankruptcy case, you file a petition asking the court to discharge your debts.  The basic idea in a Chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property that Illinois and federal laws allow you to keep.  Depending on your asset situation, all of your property may be exempt.  However, the bankruptcy trustee sells property that is not exempt. The sale proceeds are distributed to your unsecured creditors.



What Happens To My House or Car in a Consumer Chapter 7?


If you want to keep property like a home or a car and are behind on your mortgage or car loan payments, a Chapter 7 bankruptcy case probably will not be the right choice for you.  That is because a Chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.



What are the Requirements for Filing Consumer Chapter 7 in Illinois?


In order to file a Chapter 7 bankruptcy case in Illinois, you need to satisfy the following requirements:



1. You must reside in the U.S;
2. You must pass the Means Test to determine whether you qualify; and
3. You must participate in and complete a Credit Counseling course.

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How Do I Get Started?


Starting the bankruptcy process begins with completing 360 Legal’s℠ online bankruptcy evaluation or by scheduling your free initial consultation.  Click Here to Get Started