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When is Filing Bankruptcy a Good Option?

Robert J. Adams and Associates July 26, 2021

In 2020 over 31,000 people filed for bankruptcy. Some filed Chapter 7 to get a discharge of debts and a "FRESH START." Others filed Chapter 13 to manage their debt load with one monthly payment.

Have you decided or are you still mulling the possibility of filing Bankruptcy? If so, please contact a knowledgeable Illinois consumer bankruptcy attorney. The sooner, the better.

The lawyers at ROBERT J. ADAMS & ASSOCIATES INC can take your call almost anytime at 312-872-8443. We will answer your questions. We will lay out the Bankruptcy law options. With the facts and available options, you can make the best choice for yourself and your family.

Take a Look At Your Current Financial Situation

Be honest with yourself. Add up all your debts. How much do you have to pay each month? Divide the monthly debt payment by your take-home pay.

Is your debt load (the amount you have to pay each month) more than 30 to 40% of your monthly income? If it is you are likely swimming backward and not reducing the balances. Further, it will be challenging to get more credit. If you do, it will have a very high rate of interest.

Are Collectors Calling?

Are you receiving many letters, telephone calls, and text messages demanding payment? Dealing with debt collectors is stressful, overwhelming, and difficult.


Is someone suing you, or is a creditor threatening a lawsuit? If a creditor gets a judgment, your credit score will take a dive. And, then they have other means of collecting from you.

Wage Garnishments

Do you have a Wage Garnishment? In Illinois, a creditor can get 15% of your gross (not take-home) salary

The Automatic Stay

When an individual files Bankruptcy, they get an automatic stay. This is a powerful benefit you get. It is a big stop sign sent to all creditors. They must stop pursuing collections. It gives you time to pursue your financial goals. Chapter 7: to get rid of debts. Chapter 13: to organize your debts into one monthly payment.

Understand Your Bankruptcy Options

Individuals can file for Chapter 7 or Chapter 13 bankruptcy. While these two chapters of Bankruptcy can both provide debt relief. There are differences between the two.

Chapter 7 Bankruptcy

This form of bankruptcy eliminates most unsecured debts. The goal: freedom from debt.

Is this your best remedy? Lawyers who concentrate on Consumer Bankruptcy can explain the pros and cons. Most lawyers like our firm offer a free consultation. Take advantage of it.

Chapter 13 Bankruptcy

This form of bankruptcy is a repayment plan that stretches payments. The term is usually 3 to 5 years. Sometimes Chapter 7 will not solve your problems. Sometimes a person is not currently eligible to file Chapter 7.

Here are a couple of examples where Chapter 13 is the better option:

  1. You are behind on your mortgage. There could be foreclosure. You are want to keep your house, but you need time to catch up;

  2. Another frequent example is a car note. You are behind on your note. There is a danger of repossession or a creditor has repossessed your car. Chapter 13 gives you the time to pay the balance off over a period of time; usually 3 to 5 years.

What about my unsecured debts in Chapter 13? I don't know anything about you — but I can say most of our clients pay unsecured creditors about ten cents on the dollar to unsecured creditors.

Will I Keep My House? Will I Keep My Car?

This is why you need an experienced lawyer. If Bankruptcy is right for you, lawyers will give you the advice you need to keep your house and car.

  • Your Home: Chapter 7 gets rid of debts. It does not get rid of mortgage liens. Also, what is your equity in your home? Lawyers know and understand Illinois' Homestead Exemption statutes. When is it safe for a Homeowner to file chapter 7? When is it not safe for homeowners to file chapter 7?

  • Your car: If you own a car free and clear: chapter 7 is safe if the value is less than roughly $7,000. What if I have an auto loan? If you are up to date on payments, you should have no problem filing chapter 7.

  • Pensions: Qualified 401(k), IRA, and the like are fully protected when filing for bankruptcy.

Hire an Experienced Bankruptcy Firm for Help

Why? We know the ins and outs of bankruptcy law. We have only one goal: to get the best outcome for you. ROBERT J. ADAMS & ASSOCIATES has spent decades helping folks. We listen and understand your problems. We give you honest answers. We layout your options. We make it as easy as possible.

Call ROBERT J. ADAMS & ASSOCIATES INC. today to schedule a one-on-one consultation. Our dedicated team can offer the legal guidance and reliable advocacy you need. Our firm serves clients throughout Chicago land: Chicago, Waukegan, Cook County, Lake County, Will County, and DuPage County.

So call 312-872-8443 today to speak to a lawyer anytime between 7 AM and 7 PM! We make the bankruptcy process simple and convenient. Work with us in person, over the phone, or online!