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Chapter 7 Bankruptcy Protection

This article was edited and reviewed by FindLaw Attorney Writers | Last reviewed March 26, 2008

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If your bills and creditors are ruining your life and if you are unemployed or are employed but not earning enough to keep ahead of your bills, you may want to consider discharging your debts, judgments, wage garnishments, etc. and getting a fresh start by filing for relief under Chapter 7 of the Bankruptcy code.

Filing for relief under Chapter 7 automatically stops or stays most actions by creditors. Creditors generally can not start or continue most lawsuits, wage garnishments, collection procedures or even make a telephone call to you demanding payment.

Illinois law protects much of your property once you file. This protected property is called exempt and includes, up to certain limits: household goods, clothes, pensions, some real estate, certain motor vehicles, health aids prescribed for the debtor or a dependent of the debtor, personal injury awards up to $7,500.00, insurance proceeds or death benefits payable to dependents of the debtor and wages, income and commissions earned after the filing of the Chapter 7.

A Chapter 7 does not discharge certain debts which include.

  • Alimony and child support payments.
  • Criminal & Traffic fines.
  • Federally insured Student loans that have not been paid steadily for 7 years.
  • Drunk driving related judgments.
  • State and Federal taxes due within the last 3 years.
  • Debts arising from willful and malicious acts.
  • Debts incurred by fraud or under false pretenses.
Other debts that a Chapter 7 cannot discharge include debts which are secured. Secured debts are debts where certain property of yours may have been pledged as collateral for the debt. Pledged property would include car loans, home mortgages, and some furniture, electronics and appliances. For these kind of debts you may return the pledged property to the creditor and not have to make any future payments or you can keep the pledged property and continue to make payments on all or a portion of the money owed.

If you are tired of being harassed by your creditors and would like to discuss how a chapter 7 bankruptcy can help your life, then call THE LAW OFFICES OF THOMAS R. HITCHCOCK & ASSOCIATES for a no obligation telephone consultation or to be scheduled for a free consultation appointment with me or a member of my staff.

The information contained in these pages is accurate as of the date of publication. However, it should not be cited or relied upon as legal authority rather a competent attorney should be consulted prior to the filing of a Chapter 7.

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