Which Chapter of Bankruptcy Should I File?

Bankruptcy  is scary. People think they might lose their car or home. There is a  fear of a stigma. Some worry that an employer will hold against them.

You  need not be afraid of Bankruptcy when you need it. Bankruptcy is like a  bulldog protecting your wallet. The law goes a fresh start and protects  what you own and want to keep.

When  debt burden becomes unmanageable the Bankruptcy law gives you options.  For most consider either Chapter 7 or Chapter 13. For a very few there  is even a Chapter 11 option.

Do you live  in Chicago, Waukegan, or anywhere in Cook or Lake County, Illinois? Do  you have questions or fears about Bankruptcy? Or, are you ready to  actually file Bankruptcy? Then call or visit Robert J. Adams &  Associates. Our lawyers will listen to you. They will give you straight  and honest answers. Our lawyers will explain the options available so  you can decide what is best for you. As a bonus: consultations are free  and confidential.


When  you file for Bankruptcy relief you get the AUTOMATIC STAY. Your  creditors have to stop. They cannot try to collect, contact you, or do  any without first going to court.


People  are concerned. Will I lose my car or my house or my furniture? The good  news is, Illinois has exemptions. That means if the value of the  property is under a certain value you keep it.

Are  you worried that you may have valuable property? We have two 2 blogs on  the subject. One for homes and one for personal property. You can click  on the following links:



Chapter 7 bankruptcy is your first option to consider. The discharge in Chapter 7 gets rid  of unsecured debts. And, if you want to keep your car note (and you are  up to date) you can. Same for your home.

  •  It is fast. Generally, a discharge will be entered in about 4 to 6 months;
  •  There is no repayment plan;
  •  If  you have a car note the finance company will let you reaffirm the debt.  Of course, you have to be up to date and have insurance;
  •  Do you owe money on a “junk” car and want to get rid of it? Fine. You give the car back and don’t owe any money it;
  •  Do  you want to buy a car? Nothing to stop you. Many of our clients finance  a car within days of filing Chapter 7. We have a couple of friends who  sell decent cars with decent financing terms.

To  qualify for Chapter 7 you have to pass the Means Test. Essentially, it  means your income is under a certain amount. About 90% of the population  passes the Means Test.

Also, you should  know some debts can’t be discharged. Examples include income taxes  (some but not all); student loans; and child support payments.


Why file for Chapter 13 bankruptcy instead of Chapter 7? There are a few reasons. You may not qualify for  Chapter 7. Or, it does not fit your needs. There are reasons or benefits  to filing Chapter 13.

You can’t or shouldn’t file chapter 7 if:

  •  You filed Chapter 7 within the last 8 years.
  •  Your income is too high for Chapter 7.
  •  Some debts will not be discharged in Chapter 7.
  •  You have lots of equity in property. That is generally with homes.
  •  You are behind your car note. In Chapter 13 you can keep your car and pay the balance in Chapter 13.
  •  You stop or prevent foreclosure. The back payments are paid in Chapter 13.
  •  You can protect a co-signer or co-debtor.


You  can call Chapter 13 a consolidation plan. Your debts are paid through a  Chapter 13 trustee. One monthly payment covers everything. There are a  couple of exceptions: if you have a mortgage you pay your monthly  mortgage payments; if you have child support you continue paying your  current obligation.

Do I have to pay everyone I owe in full? Yes and No. There are three (3) types of debts:

Secured debts.  If you have a car note and you want to keep it you pay 100%. If you are  behind on your mortgage and want to keep your house you pay the arrears  in full. Priority debts. Income taxes are part priority and part non-priority; you pay 100% of the priority. Child support arrears: pay in full.Generally unsecured debts like medical bills and credit cards. Most clients pay much less than 100%.

The  Chapter 13 plan is worked out: Your income minus continuing expenses.  If it is feasible, that is the monthly plan payment. Chapter 13 plans  usually last 3 to 5 years.

The lawyers at Robert J. Adams & Associates work hard to keep the monthly payment as low as possible.


Like Chapter 13, Chapter 11 bankruptcy is a consolidation plan. Most individuals don’t file Chapter 11.

It is for:

  •  Corporations, LLC, and Partnerships (married couples who own a business can usually file Chapter 13); and
  •  For individuals who have very high debts over the following: Unsecured debt over $419,275 and/or Secured debt over $1,257,850.


Are  you considering filing Bankruptcy? Do you have questions or concerns?  Do you want to get rid of or ease the debts you can’t pay? Then you  should make a simple phone call to our office. Our consultations are  free and confidential.

We look at your individual circumstances. Your problems are different from your neighbors.

We will give you the pros and cons of Chapter 7 and Chapter 13 (and even Chapter 11).

Our  office works with facts and figures. When the full picture is drawn the  options are explained. You then decide what is best for you and your  family.

You can begin preparing for your fresh start. We take care of all the paperwork, negotiations, and working with others.

Do  you live in or around Chicago, Cook, Lake, Will, DuPage, or McHenry  County? We have offices to serve you in Chicago and Waukegan. Call us at  Robert J. Adams & Associates, Inc., today to begin the bankruptcy  process. We are available by phone (312-872-8443) every day of the week.

P.S. We even handle all of the beginning of the process over the telephone and by Zoom.

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