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Bankruptcy
Chicago Attorney James C. Truax
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What is the Difference Between Chapters 7, 11 and 13?
Chapter 7 is a "straight" bankruptcy - the most common kind. You may keep your exempt property while wiping out most, if not all of your debt. If you are current on your house or car payment, you can usually keep the property as long as you continue to make the payments on time.
Chapter 11 is usually used by a business to reorganize its financial structure. Creditors vote on a plan of reorganization.
Chapter 13 is for an individual wage earner with regular income. It is a debt repayment plan in which you make monthly payments for a period of years to a court-appointed trustee, who in turn makes payments to your creditors. Chapter 13 is typically used by someone who is behind on their mortgage payments and wants to save their home. Creditors do not vote on the Plan.
All Chapters will stop lawsuits, wage garnishments and creditor harrassment.
All Chapters provide that much of an individual's property is exempt from the claims of creditors. In other words, you can usually keep all of your property.
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What is the Procedure for Filing Bankruptcy?
First, call us for a free initial consultation to find out if bankruptcy is the right thing for you. We will then set up a free appointment for you to come in to the office so we can discuss your case in detail. Be sure to bring ALL of your bills with you.
Next, my office will prepare all of the necessary paperwork (about 25 pages) and return them to you for your review and signature. This usually takes about one business day.
After you return the signed documents, we will file them with the Bankruptcy Court. Your creditors will then be notified that the bankruptcy injunction is in effect and that they cannot bother or harrass you anymore. Lawsuits and wage garnishments must stop at this time.
Then, about 4 to 5 weeks after the case is filed, a Meeting of Creditors, also called a trustee's meeting, is conducted by a bankruptcy trustee appointed by the court. You must attend this hearing. The bankruptcy trustee reviews the papers we have filed and asks questions about them. We are there with you.
Finally, the trustee makes a recommendation to the Bankruptcy Judge as to whether your bankruptcy should be approved.
Your Bankruptcy Discharge is then entered by the Bankruptcy Judge.
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What Effect Will a Bankruptcy Have on My Credit?
Many of our clients ask this question. The truth is, if someone is considering filing bankruptcy, chances are that his or her credit is already poor. If that is the case, a bankruptcy may actually help re-establish your credit. How? Two main reasons:
Number One, you will no longer be overwhelmed by all your debt. Rather than numerous "minimum payments" and the like each month, all you will have is your living expenses (and certain other debts like student loans). In other words, you will once again enjoy having some disposable income.
Number Two, you cannot get another bankruptcy discharge for 6 years - creditors know this and may consider you a better credit risk because of it.
A bankruptcy case is on your credit report for 7 to 10 years. However, many of our clients have been able to get car loans, mortgages, or other credit after only a few months. As always, it depends on the individual case.
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About Us
Attorney James C. Truax is in his 18th year as a practicing bankruptcy attorney and specializes in representing debtors. Mr. Truax has served on the Chicago Bar Association's Bankruptcy and Reorganization Committee and is a member of the American Bankruptcy Institute.
For more information, please contact us at (312) 236-4244.
Law Offices
JAMES C. TRUAX & ASSOCIATES
100 West Monroe Street
Suite 2001
Chicago, IL 60603
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