Chapters of Bankruptcy: IL Level

MichaelLC · August 2010

So I've been out of work for almost a year and half. I have a retail job, but it's a1/3 of my old salary. My wife works in sales and is almost 100% commission based. We've been paying the mortgage (which is in my name only) and utilities usually on time, but it's getting a little rough and her CC bills haven't been paid for months, resulting in 10 calls a day from collections. Combined we owe about $40,000 in CC bills, but our cars are both paid off.

Taking all that into account, we were thinking of having either just her or both filing for bankruptcy here in Illinois. We want to pay our bills, but honestly at this point there's no way, even when I do get a better paying job. Mainly we're concerned about our condo and cars. If it means no cable for a year, we can certainly live with that, but don't want to lose our house or transportation.

tl/dr; $40k in CC debt, own cars, income is spotty due to job loss and commission sales. Want to keep condo.

Any advice, experiences with this? What are the costs associated with filing? How do we pick a good lawyer/company? Thanks!

Pheezer · August 2010

Most of what you're asking has to be answered by a lawyer who specializes in that, but my understanding with collections is that you can demand that they put all further correspondence into writing and then they've got to stop calling and start sending letters. Don't know how true that is or if it applies here.

kaliyama · August 2010

About half thr time i am a bankruptcy lawyer, but do corporate restructuring not individuals. The best way to get a referral to a good bk atty is to ask another lawyer. There is a bk filing fee - other court fees will vary on the district you are in. Where do you live? You have to do things pre-petition like credit counseling and not look like you are trying to strategically max out your credit. Try callimg your local legal aid for a referral.

Siska · August 2010

As far as I know, only secured loans can repossess "stuff" at a bankruptcy, so as long as you don't have a loan for them, your condo and car would be safe. So in your case, you may loose your home, but keep your car. CC debts are unsecured, so even things you bought with them might be safe. It is possible to file on your own, without a lawyer, I know someone who has. I'm pretty sure it cost them less than $100 to file. But that might have been some special low I have 0 money fee as they had been completely out of work for months. At some point, before it was finalized they had to talk to someone from the court, to make sure there was no way this could be fixed with some kind of payment plan or that they had savings hidden away. In his case it was easy as he had no money, no income and no secured loans, so the answer to everything was no. Since there are 2 of you and you do have income and a mortgage, I am sure things will get alot more complicated and you may need professional advice from a lawyer to ultimately get this properly done.

Vi Monks · August 2010

MichaelLC wrote: »

So I've been out of work for almost a year and half. I have a retail job, but it's a1/3 of my old salary. My wife works in sales and is almost 100% commission based. We've been paying the mortgage (which is in my name only) and utilities usually on time, but it's getting a little rough and her CC bills haven't been paid for months, resulting in 10 calls a day from collections. Combined we owe about $40,000 in CC bills, but our cars are both paid off.

Taking all that into account, we were thinking of having either just her or both filing for bankruptcy here in Illinois. We want to pay our bills, but honestly at this point there's no way, even when I do get a better paying job. Mainly we're concerned about our condo and cars. If it means no cable for a year, we can certainly live with that, but don't want to lose our house or transportation.

tl/dr; $40k in CC debt, own cars, income is spotty due to job loss and commission sales. Want to keep condo.

Any advice, experiences with this? What are the costs associated with filing? How do we pick a good lawyer/company? Thanks!

I do a fair bit of work with bankruptcy lawyers, and I would say your best bet is to talk to a lawyer. Most lawyers will give you a free consultation so you can get some advice on your situation. Chances are, you'll be able to keep both your home and your car, as well as a number of other assets if you file your claim properly. I won't get into specifics about filing a claim because, quite frankly, an attorney will do it better and for free. Go in for a consultation and see what your options are. You'll probably be able to work something out.

Demerdar · August 2010

I think it's time to start thinking about cutting back. Move into a cheaper place, cut cable, eat cheaply, maybe even sell a car and get something cheaper. Filing bankruptcy is serious business and will stain your credit for 5 years or so. It's a rough step and you should not take it lightly. Think about what you can be cutting back on. There might be other alternatives as well, talk to a lawyer.

LaPuzza · August 2010

1) try to negotiate your debts - rates, payments, balance reductions. If you haven't made those calls, you're out of order here.

2) Find a bankruptcy lawyer, in whatever manner you chose other professionals (recomendations, funniest ads, whatever). If you have no lawyer friends and no friends that know lawyers, consider calling the state Bar associaiton. Personally, I really like bankruptcy specialists (lawyers, not "preparers") for these sorts of things, because they have the mechanism in place to do it all right.

MichaelLC · August 2010

We can cut back with some things like utils, but moving isn't an option - our place is currently worth about 1/2 of what we paid.

We've tried talking to the CC companies, but they're basically "bugger off," no interest in working something out. Same deal with the mortgage - I tried doing Mr. Obama's plan, but the bank told us we were out of luck too.

ceres · August 2010

This is something that's been around for a while and might be worth looking into.

It's called HEMAP, or Homeowners Emergency Mortgage Assistance Program. It's no free pass, but check it out and see if it might work for you.

Simpsonia · August 2010

ceres wrote: »

This is something that's been around for a while and might be worth looking into.

It's called HEMAP, or Homeowners Emergency Mortgage Assistance Program. It's no free pass, but check it out and see if it might work for you.

I think you're thinking of HAMP, and yeah it's unfortunately pretty useless at the moment. The bank will give a trial loan mod lowering the payment, then 9-12 months later say that the final loan mod was rejected and ask for the full difference and then file foreclosure action.

I'm not sure where you are in IL but I'd look for a local bankruptcy attorney, ie avoid Debtstoppers and the Peter Francis Geraci's and etc.

ceres · August 2010

Simpsonia wrote: »

ceres wrote: »

This is something that's been around for a while and might be worth looking into.

It's called HEMAP, or Homeowners Emergency Mortgage Assistance Program. It's no free pass, but check it out and see if it might work for you.

I think you're thinking of HAMP, and yeah it's unfortunately pretty useless at the moment. The bank will give a trial loan mod lowering the payment, then 9-12 months later say that the final loan mod was rejected and ask for the full difference and then file foreclosure action.

I'm not sure where you are in IL but I'd look for a local bankruptcy attorney, ie avoid Debtstoppers and the Peter Francis Geraci's and etc.

It's definitely HEMAP, but I just realized it's a Pennsylvania state program.

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