Many clients come to us with questions and concerns about the bankruptcy process in Illinois. There are a lot of myths and misinformation about the process and it is not uncommon for clients to have incorrect information before meeting with legal counsel.
When the bankruptcy process is being considered, it’s important to understand its advantages, disadvantages and what the process post-bankruptcy consists of as well. Here are the top three most common myths about the Illinois bankruptcy process that we would like to debunk.
Myth #1: Employer Notification of Bankruptcy Filing
This is one of the most common myths and one that is completely false. The bankruptcy process does not involve any employer notification whatsoever. While bankruptcy case filings are searchable as public records, it is unlikely that an outside party would be searching for them. The one exception to this rule applies to people with high profiles, who may have their information published in the press.
Myth #2: Lifetime Denial of Credit for Major Purchases
Filing for bankruptcy will not bar you from ever having the ability to secure credit for major purchases like a home or automobile. For most bankruptcy filers, the credit approval needed to secure a home loan would be possible in two to three years from the date of their bankruptcy filing. Obtaining approval for car loans and credit cards generally takes less than two years. What is most important in re-qualifying for credit is making sure that the right credit rebuilding process is being followed.
Myth #3: There is a Minimum Amount of Debt Required
The bankruptcy process in Illinois does not require any minimum amount of debt for a party to be able to file a petition for bankruptcy. While it is not prudent to initiate the process of bankruptcy without a reasonable amount of debt, what is a reasonable amount of debt can vary on a case by case basis. If the party can demonstrate that the ability to manage the debt is severely diminished, it is likely that the bankruptcy petition will be accepted by the court. However, to qualify for the designation of a Chapter 7 bankruptcy, there is a requirement to undertake a means test.
The finances of many hardworking individuals were severely impacted by the financial meltdown and subsequent tepid economic recovery. If you are in an unmanageable financial situation due to debt, filing for bankruptcy may be an option. Contact a knowledgeable Cook County bankruptcy attorney to find out more information about the various options for bankruptcy filings. Please call 708-888-2299 to schedule a free consultation with the Law Offices of Eric G. Zelazny.