CAN I MAKE TOO MUCH MONEY FOR CHAPTER 7 BANKRUPTCY?

The federal bankruptcy statute governs all personal and commercial bankruptcies.  According to the statute, you have to "qualify" for a Chapter 7 bankruptcy.  There is a maximum household income level based on the amount of people living in your household.  Additionally, even if you are below that income level, if you have too much disposable income, measured as income minus necessary monthly expenses, the trustee can contest your discharge as an abuse.  In this case, a hearing could be held.

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CAN TENANCY BY THE ENTIRETY PROTECT MY HOUSE?

In Illinois, there are several ways to take title when more than one person owns real estate.  Generally, primary residences of married couples are owned through tenancy by the entirety, which offers certain benefits, including additional protection from creditors.  In general, if one spouse is filing bankruptcy, and the property has been owned through tenancy by the entirety since before the "look-back" period, then any equity in the property would be protected and exempt.  However, if both spouses file bankruptcy, or if the property has not been owned in this manner, any equity above the state exemption level could be at risk of seizure by the trustee.  Talk to one of our bankruptcy attorneys for additional information about protecting the equity in your house.

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CAN BANKRUPTCY DELAY A FORECLOSURE?

Yes, a bankruptcy can delay a foreclosure, but how long is a different question.  When a bankruptcy petition is filed, all ongoing litigation and collection activities must be stopped due to the automatic stay.  A lender involved in a foreclosure must comply with this requirement as well.  The automatic stay usually remains in effect for the length of the bankruptcy, which can be at least a couple months. However, if a lender that has started the foreclosure proceedings and does not believe the debtor will be attempting to keep the property, they can file a Motion to Lift the Automatic Stay, which would allow them to continue with the foreclosure proceedings.  As a result, a bankruptcy may only delay a foreclosure a couple weeks or a month in some instances, while it can delay the process several months in other cases.  Contact a bankruptcy attorney below for additional information.

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CAN I WITHDRAW A BANKRUPTCY PETITION ONCE IT IS FILED?

The bankruptcy code details exactly when a debtor can withdraw a petition that is filed with the bankruptcy court.  In order to be allowed to withdraw, a petition must be filed and approved by the court itself.  The major issue the court considers is whether the creditors will be prejudiced by allow the debtor to withdraw, however, the court will consider other factors as well.  If you are considering withdrawing a petition, contact your bankruptcy lawyer for more information on if you may qualify.

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WHAT PAPERWORK DO I NEED TO GATHER PRIOR TO FILING BANKRUPTCY?

Before filing bankruptcy, your lawyer will require some documents from you in order to complete your bankruptcy petition or prior to the 341 creditor's meeting.  Typically, your bankruptcy attorney will need you to complete a general questionnaire and produce a recent credit report, three years of tax returns, a recent paystub, copies of certain statements or bills, bank statements, and possibly other miscellaneous documents depending on your situation.  If you are unable to produce these documents, talk to your real estate lawyer to explore your options.

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CAN I INCLUDE ANTICIPATED EXPENSES/DEBTS ON MY BANKRUPTCY PETITION?

Unfortunately, only debts and expenses incurred as of the time the bankruptcy petition is filed can be included on the bankruptcy petition.  If you are expecting to incur additional expenses in the future, most individuals would be well served to wait to file their petition until they are charged these expenses, unless they are under a deadline to file, for example, if they are facing a foreclosure.  Another option would be to amend the petition and add the expenses at a later date after filing, assuming the bankruptcy case is ongoing when the debts are incurred.  For more information about this issue, contact a bankruptcy attorney within our office to discuss this further.

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HOW LONG DOES A TRUSTEE HAVE TO REVIEW MY CASE?

In a Chapter 7 bankruptcy, after the 341 Creditor's Meeting a trustee will take time to review the testimony and information from the debtor.  They will then make a determination of whether there are any assets of the debtor that are non-exempt and can be seized for the creditors.  Typically, this process takes about a week or so, however, a trustee does have the right to keep a case open if they feel they need more time to review the information.  For cases with extensive documentation or discovery, this process can sometimes take up to several months.  It is important to understand the distinction between a trustee reviewing extra documentation and objecting to a bankruptcy discharge.

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