In Chicago the court accepts filing for Chapter 7 and Chapter 13 bankruptcy cases for people who are unable to pay their debt. The judge must be convinced that the person who is filing for bankruptcy must qualify the criteria of bankruptcy before filing it otherwise he won’t approve it.
Warning regarding filing for bankruptcy:
Filing for bankruptcy can spoil your credit record as it stays on the report for 10 years. The person can not acquire credit to buy new home or indulge into any luxurious products as he has filed for bankruptcy. Student’s loan and back taxes are two debts which are not excused even after filing for bankruptcy.
A declaration has to be made in the news paper as well as in the court paper stating that you are a “bankrupt”. The judge would demand an explanation for the cause of filing bankruptcy and he can also question you regarding the cause of your financial crisis.
Filing bankruptcy would ruin you name and it would be hard for you to fetch a job in the market.It is advisable to avoid filing bankruptcy.
- Time period: It stays on your credit report:
Bankruptcy would be on the credit record permanently according to Chapter 7 bankruptcy. The fact that you filed a bankruptcy would be quite visible on the credit report. If you have filed for Chapter 7 the information would be there on your credit reports for 10 years from the date you have filed. While a Chapter 13 would be on your credit report for 7years from the date of filing.
- Payment plan- Fee and installment charges:
A Chapter 7 bankruptcy case cost $299 to file and filing fees for a Chapter 13 case would cost $274. If a filer can prove that he is financially weak to pay the full fee of the bankruptcy procedure then the court may accept installment. With in 30 days of filing bankruptcy the installment should be made and the remaining amount should be paid within 60 days from the initiation of a bankruptcy case. Within 120 days of filing bankruptcy the total amount must be paid.
- Debts that are not excused:
Some debts are excused even if you file for bankruptcy which might include such as court fines, child support, alimony, federal student loans, and back taxes. Most tax debt cannot be included unless Unless a tax debt is three years old it can not be included till then.
- Credit Counseling session:
Filing for bankruptcy won’t be accepted unless a filer goes for a credit counseling session. Before you file for bankruptcy a certified credit counseling session’s evidence has to be provided by the filer.
- Required Financial Documents
You have to provide with a number of financial documents as these are required before you pursue a case. You must submit the following documents:
- bank statements
- past three tax returns
- current pay stubs
- list of your assets and debts.
You bankruptcy case would be denied if you fail to produce the said documents and lying about your assets constitutes It would be considered a federal crime if you lie about your assets.