FAQ's. Common Questions answered here.
Going through something as difficult as a major legal event can leave you filled with questions about the past, present, and what to expect in the future. Get answers to some of the top questions I receive, to help put your mind at ease. Check back often for even more answers to your legal questions. Better yet, give us a call to see how we can help.
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Can I file for bankruptcy on parking tickets?
People with unpaid parking tickets sometimes want to know if they can file bankruptcy on the parking tickets. Bankruptcy is not something that you file a particular debt "on" or "against", a bankruptcy is a bankruptcy and you don't get to pick and choose what to "include". That being said, however, the answer is no- you cannot eliminate parking tickets via bankruptcy. Unpaid parking tickets is sometimes a symptom of other financial difficulties for which bankrtupcy might be option, which could then free up some of your cash to pay those parking tickets before they keep accruing fines and penalties. Not sure if bankruptcy is right for you? Be sure to claim your free book "Bankruptcy Myths Exposed" to learn more about debt relief.
Should I wait to file for Bankruptcy?
If you are wondering if you should wait before filing for bankruptcy, either you want to wait in the hopes that your situation will change, making bankruptcy un-necessary, or else you have been advised that for strategic reasons- it is better to wait (for example, you have too much recent credit card usage which could be a problem).
If you are hoping that things will get better but there is no real reason to believe that your situation will change (for example, you are about to start a better job or get married), then you are probably living in denial about your situation and you need to face the facts now. That does not mean file for bankruptcy now, but at least you need to learn more by having an honest discussion with a bankruptcy lawyer, before things get worse. If you still aren't ready for that- request a free copy of my book "Bankruptcy Myths Exposed". And remember, a good lawyer isn't going to try to "sell" you on filing for bankruptcy but rather should be able to lay out your options for you.
Can I get my Repossessed Car back after filing for bankruptcy?
Yes. If your car has been repossessed and you then file for bankruptcy, the creditor who took your car has to give it back. The creditor needs to be notified that you have filed for bankruptcy protection (something that your lawyer can take care of). Once they have been notified of the bankruptcy, if they refuse to give you your car back, they are in violation of the automatic stay and are breaking the law. This works because the law provides that if a creditor continues to exercise control over property of the bankruptcy estate (ie: the repossessed car), it is a violation of the stay for which they can be penalized.
Are there any debts that I cannot eliminate in Chapter 7 Bankruptcy?
While most debts can be elmiated, or "discharged" in a Chapter 7 bankruptcy, there are certain kinds of debt that are normally nondischargeable (some very limited exeptions do exist for some). They are:
- student loans
- child support
- obligations of spousal support (called maintenance in Illinois)
- debts that are owed to a government (for instance: fines, tax, court costs, parking tickets, etc)
- post petition Homeowners association and condo fees
- money damages due as the result of your DUI (drunk driving)
If you are obligated on any of these non-dischargaable debts, it does not mean that a bankruptcy can't help you. Do you have other debt such as credit card bills, loan, or medical debt that you struggle with? If you do, a bankrutpcy may elimiate other debt for you which can make it easier to meet your obligations on the non-dischargeable debt. If you have been financially struggling for a while, stop wondering and start planning. Schedule a consultation with our office to find out what your best options are.
My Car is paid off in full. Will I lose it if I file for Bankruptcy?
There are many different ways that cars can be dealt with in bankruptcy, depending on what chapter you file for, how many cars you have, what you want to happen to your car, the car’s value and condition, and whether or not money is still owed on the car. If your car is paid off in full, what you can do comes down to something called bankruptcy exemptions. Simply put, exemptions are items that you can keep up to a certain dollar value. So the first thing that you will want to know is how much is your car worth. To answer that question, you should know what model your car is, the mileage, and overall condition. Sites like Kelly Blue Book can then help you determine a realistic value. In Illinois, automobile exemption is $2,400 as of January 1, 2015. If your car is worth more than that, don’t worry- you might have other options for protecting it. If you are married and own the car jointly with your spouse who will also file for Chapter 7 with you, the exemption can double to $4,800 and there is also a “wild card” exemption that you may want to use to stack on top of your automobile exemption. In Chapter 13, the un-exempt equity in your car factors into how much money you are repaying to the court each month. It can get confusing and dealing with exemptions in bankruptcy is where many people get it wrong and really hurt their case, which is one of many reasons that you should be working with an experienced bankruptcy lawyer. Give our office a call to set up a consultation to see how we can help you decide if bankruptcy is a good option for you.
Where will my Chapter 7 Bankruptcy Creditors Meeting be held?
Where your 341 Meeting of Creditors will be held depends on what county you live in and what Chapter of Bankruptcy you filed under. You will receive an official notice in the mail informing you of the name of your trustee and the date, time and location for your creditor's meetings. In the greater Chicago area, your 341 Chapter 7 bankruptcy meetings may be held here:
- Cook County: 219 S. Dearborn Ave. Chicago IL (downtown)
- DuPage County: (Courthouse) 505 North County Farm Road Wheaton IL
- Kane County (the "old courthouse") 100 S. Third Street Geneva IL
Don't forget to bring your photo ID and proof of social security number!
Is Child Support Counted as Income in Bankruptcy? What about Child Support I Pay?
If you are filing for bankruptcy and receiving child support, it is considered income. But only if you are actually receiving it. If you are supposed to be receiving it but are actually not, then it should not count as money that you have coming in each month. Likewise, if you are ordered to pay child support but are not, then it does not belong as an expense if you are filing for bankruptcy.
What is a Chapter 13 "Confirmation" and do I need to worry about it?
Confirmation in Chapter 13 bankruptcy is just another term for formal approval of your plan by the Court. Your attorney will work very hard to come up with what is known as your Chapter 13 Plan. It acts like a roadmap to tell the court and creditors basically how much money you will be paying every month, how many months your plan will last, how much money is going towards secured creditors, how much your unsecured debtors get, how the car and the house will be handled, etc. The plan has to not only has to be "do-able" for the debtor (or the person going through bankruptcy) but it has to be acceptable to the trustee and the court. A confirmation hearing is the formal court process whereby the judge will sign your plan for approval. If the trustee or a creditor has objected to your plan, it is possible that the judge will not approve it and it may need to be adjusted accordingly. While good attorneys often prepare plans that will pass confirmation, it is also not unusual that a plan may not pass the first time and will need to be re-worked. While confirmation is not something to necessarily worry about, you will want to be aware of any possible objections and can breathe a sigh of relief once the plan has been confirmed as you are well on your way down the road to Chapter 13 debt relief.
I have to replace my car but I am in a Chapter 13 Bankruptcy? Can I?
Things happen in life and sometimes when you least expect it, you find yourself needing a new car, maybe as the result of an accident. If you are in a Chapter 13 bankruptcy, you'll need approval from your trustee. Speak to your attorney about the situation as he or she will need to file a motion to incur new debt (or if you are using the same lender, you may need a motion to subsitute the collateral). Many people will first shop around for financing before bringing the motion so that the court, trustee and attorney know exactly what it is that you are looking to do.
Do I have to pay for my car if it is repossessed?
Worried that the repo man is looking for your car? If you can't afford your payments and are going to just let the car be repossessed, you may still have to pay back the remaining car payments (and costs of repossession, storage, auction fees, etc) which will be offset by the amount that it gets sold for at auction. This is what is known as the "deficiency" amount. So essentially, you are getting stuck paying for a car that you no longer have. Bankruptcy is a beautiful thing in this respect in that it can "wipe out" the deficiency and you walk away from your car without having to worry about getting stuck with a bill later.
Bankruptcy is a powerful too and has multiple benefits when used correctly and in appropriate circumstances. To learn more about this form of debt relief, be sure to request our free book "Bankruptcy Myths Exposed".