Here’s What Rockford Residents Need to Now about Personal Bankruptcy


If you’re flooded with personal debt, bankruptcy lawyers in Rockford, IL, can help. You have two options. The first option is to file a Chapter 7 bankruptcy petition. The second option is to file a Chapter 13 bankruptcy petition. Here’s what you need to know about these options.

Chapter 7 Proceedings

This is the most frequently filed personal bankruptcy petition. A discharge in a Chapter 7 bankruptcy operates to discharge medical, credit card and other unsecured debt. Even secured debt like mortgages and car loans can be discharged. Chapter 7 proceedings are primarily for middle and lower-income individuals.

The Means Test

You must pass the means test to be eligible for Chapter 7 bankruptcy relief. With this test, your income, family size and expenses are balanced against the median household income in Illinois in determining whether you have sufficient disposable income to pay your debts. If that income is insufficient, you’re a suitable candidate for Chapter 7 bankruptcy relief.

Chapter 13 Proceedings

If you don’t qualify for Chapter 7 relief, Chapter 13 reorganization is a viable alternative. You and your bankruptcy lawyers in Rockford IL can create a viable debt payment plan to be approved by the bankruptcy court. Upon approval, the court will give you three to five years to fully comply with your plan. A single monthly payment will be made to the bankruptcy trustee who will make appropriate disbursements. At the end of the three to five year period, you will be discharged.

The common thread running between both Chapter 7 and Chapter 13 bankruptcies is the automatic stay. From the moment that your bankruptcy petition is filed, listed creditors are prohibited from pursuing you for any balances that you might owe them.

You can learn more about Chapter 7 or Chapter 13 bankruptcy proceedings, the means test or the automatic stay by contacting the bankruptcy lawyers in Rockford, IL, at the Crosby Law Firm. For more information, visit our website.

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    Author: Kendrick Wilkes

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