Written by the Upsolve Team.
Updated December 10, 2019
Bloomington, Illinois, is a wonderfully modern, progressive city to call home. Literally in the middle of so much, sitting at the intersection of Interstates 39, 55, and 74, and so close to Chicago, St. Louis, and Springfield, there is always something to do. As the city grows and thrives around you, it can be easy to feel left behind and like you’re missing out. Even with the falling unemployment rate, sometimes you can get far enough behind that it feels impossible to keep up, let alone get ahead. If you feel like you have been trying to dig yourself out of a hole that is only getting deeper, you may be considering filing bankruptcy. People filing bankruptcy in Bloomington, Illinois, will find themselves following in the footsteps of giants - local attorney and United States President Abraham Lincoln declared bankruptcy in 1833. It isn’t only presidents (past and current!) who can benefit from bankruptcy, though. If you are out of options to pay your debts, have a wage garnishment, receive harassing calls from debt collectors or have trouble sleeping because you are worried about your bills, you, too, may benefit from filing bankruptcy.
From the minute you file your Bloomington bankruptcy, all debt collection activities must stop. Garnishments are cancelled, phone calls cease, and you can breathe again. Even with these benefits, bankruptcy is not the answer for everyone. Some obligations, like child support, are not relieved by filing bankruptcy. Others, like a car repossession or home foreclosure, may be stalled, but not completely stopped.
If you are new to the idea of filing bankruptcy in Bloomington, the first step is to understand some basic terminology. Most people file a Chapter 7 or Chapter 13 bankruptcy, but Chapter 11 bankruptcies, for businesses like Payless, most often make the news. Although newspapers do not usually publish the names of people who file bankruptcy, thousands of people from the Bloomington area file bankruptcy every year. If you would like to join the people who have found this relief, legal aid may be your first stop. One of the most notable differences between a Chapter 7 bankruptcy and a Chapter 13 is how unsecured debts, like credit cards, are handled. In a Chapter 7 bankruptcy, most unsecured debts are completely forgiven and never paid. In a Chapter 13 bankruptcy, some or all of the unsecured debt is repaid. Qualifying for a Chapter 7 requires that you pass the Means Test. Even if you pass the means test, there are some situations where a Chapter 13 may be better, like if you have a regular source of income or valuable property you wish to protect.
Bloomington Bankruptcy Lawyers - Estimated Cost
Many people fear bankruptcy, but the fear is typically because bankruptcy is an unknown. A great way to learn more about Bloomington bankruptcy is to speak to a bankruptcy lawyer to address any doubts that you have. The cost of a bankruptcy lawyer in Bloomington to file a Chapter 7 bankruptcy is between $900 and $1,200. But don’t let a Bloomington bankruptcy lawyer’s cost deter you; most attorneys offer a free consultation which will cost you only time. If you can’t afford to hire an attorney, you may be eligible to work with Upsolve for free assistance or otherwise obtain assistance from legal aid.
How to File Bankruptcy in Bloomington, Illinois for Free
Everyone loves free things, and you may want to know how to file bankruptcy in Bloomington for free. Maybe you are just starting your research and wondering how the process works or maybe you are already certain you want to file a Chapter 7 bankruptcy. We have provided this guide and other resources to provide you with an overview of the Bloomington bankruptcy process and answer all your questions.
Collect Your Bloomington Bankruptcy Documents
Simple organization can be the best organization, so use the following checklist to start gathering your documents.
2 years of tax returns (you can request a copy online from the IRS)
Pay stubs for the previous six months
Details for other income you have, including SSI or unemployment
Proof of value for property you own, like the tax value of your home
Bank and retirement account statements for 2-6 months
Child Care Expenses
Health Care Expenses
Medical Debt Statements
Credit Card Statements
Credit Report (get a free one at www.annualcreditreport.com)
There are a lot of documents, but work on checking off one box at a time. You may have additional documents that you need when filing bankruptcy in Bloomington, depending on your situation. Focus on those documents that show your income, your expenses, your assets, and your debts.
Take Credit Counseling
Every person who files a Bloomington bankruptcy must take a credit counseling course before filing Chapter 7 bankruptcy. Be careful to make sure you take your course from an agency approved for the Central District of Illinois when filing bankruptcy in Bloomington. Many people take the class online, but you can also take it in person at Chestnut Health Systems, Inc. on Martin Luther King Drive in Bloomington, or by phone from a number of agencies. You will receive a certificate when you finish that is valid for 180 days. Save it because it will be part of your bankruptcy packet.
The purpose of the credit counseling course is to help make sure people understand what bankruptcy is and what alternative exist. Even very wealthy people wind up filing bankruptcy, including one-in-six NFL players. The credit counseling course is there to help you develop a healthy relationship with money using budgeting tools and savings goals. Once you receive relief from your debts by filing a Chapter 7 bankruptcy in Bloomington, with the proper tools, your finances will continue to improve.
Complete the Bankruptcy Forms
Rome wasn’t built in a day, and your bankruptcy forms probably won’t be complete in a day either. Take your time for this tedious work because being thorough and detailed will pay off in the end. Use Upsolve’s list of forms and the checklist provided by the Illinois Bankruptcy Court to help you complete 1 or 2 forms at a time. Through these forms, you will tell the Bankruptcy Court who you are, how much you earn, how much you spend, what you own, and who you owe. When filing a Chapter 7 bankruptcy in Bloomington, if you have any property that is securing a debt (meaning that if you don’t pay the debt, a creditor could take something you own), you will need to complete a Statement of Intent. In Bloomington bankruptcies, people often need to complete a Statement of Intent for their vehicles.
There is a unique form for Bloomington: the DeBN form. Complete this form if you want the Bankruptcy Court to communicate with you by email. If you would prefer to be contacted by traditional mail, you do not need to complete the DeBN form. Regardless of what you choose, always disclose truthful and complete information on your forms when filing bankruptcy in Bloomington.
Get Your Filing Fee
The Court charges $338 for people filing a Chapter 7 bankruptcy in Bloomington. This fee covers the United States Bankruptcy Court’s costs of handling and processing the paperwork in your case. It also pays the Chapter 7 bankruptcy trustee for conducting your 341 meeting. Even if you understand why the fee exists, you may still not be able to afford it. If that is the case, you may apply for a fee waiver if your household income is less than 150% of the federal poverty guidelines. If your income is too high for a fee waiver, you can request to pay the fee in installments after filing bankruptcy in Bloomington.
Print Your Bankruptcy Forms
You have worked hard and now your Bloomington bankruptcy forms are ready to be printed so you can finally file your Chapter 7 bankruptcy case! As you have realized, there are many forms (there will be more than 70 pages for your Bloomington bankruptcy). Before you even print your packet, review it carefully so you can avoid needing to print it more than once. After your packet is printed, review it again to make sure it is complete and accurate, which is the most important thing when filing bankruptcy in Bloomington. Be prepared to print two copies of your packet, single-sided, on regular-sized paper. If you don’t have a printer, you can print at the Bloomington Library, which will let you submit your request from your house, your phone, or the computers at the library. You will pay $0.15/page and need to pick up your packet from the library on the day it is printed before the library closes for the day. If you have access to the library at Illinois State or Illinois Wesleyan (or any of the other local colleges), you may be able to print for even less.
Go to Court to File Your Forms
If you want something done right, do it yourself. In this case, it’s best to file your Bloomington bankruptcy forms in person. If you oversee the filing, you can speak to the clerk, who may tell you if you have missed a signature on a page, if you’re missing a document, or if you forgot to print a form. Before you go to file your Chapter 7 bankruptcy, you should read the Court’s guidelines for communicating with the Court. One you have read the guide, reviewed your printed forms, and are satisfied that your Chapter 7 bankruptcy petition is complete, you’ll drive to the Bankruptcy Court in downtown Springfield at 600 E. Monroe Street, Springfield, IL 62701, right around the corner from the Lincoln Library. You must bring a photo ID with you and should leave as many personal items at home or in your car as possible. When entering the federal courthouse, you will need to go through security, including walking through a metal detector and having your items searched by security. Bringing less will help you move faster. Do not bring any weapons, including pocket knives. The Clerk’s office is open from 8:00 A.M. to 5:00 P.M. except on federal holidays. As you go through security, ask the federal marshals at the door to direct you to the clerk’s office in Room 226.
Mail Documents to Your trustee
One of twelve Chapter 7 bankruptcy trustees is assigned to each Chapter 7 bankruptcy in Bloomington. You will meet with your bankruptcy trustee during your 341 meeting, but you may talk to your trustee before then. The Chapter 7 bankruptcy trustee is responsible for administering your case and will do so by regular mail (even if you signed up for electronic correspondence by completing the DeBN form). The trustee will ask that you provide certain financial documents, like pay stubs and tax returns. If your case has been filed for at least 10 days, and you have not heard from your Chapter 7 bankruptcy trustee, call your trustee’s office to make sure you have not missed anything. You must carefully review any correspondence that you receive from the trustee assigned to your Illinois bankruptcy case. Failure to cooperate with your trustee can result in a dismissal of your Chapter 7 bankruptcy without a discharge.
Take Bankruptcy Course 2
Remember the course you took before filing Chapter 7 bankruptcy? You must take another course after you filed, the pre-discharge course. Forgetting this course, which is easy to do, will result in your Bloomington bankruptcy case being closed without a discharge having been entered. The course will teach you to manage your finances and avoid falling into debt traps after filing a Chapter 7 bankruptcy. As part of this course, you will prioritize your expenses, make a budget, and set financial goals. While some of this course may feel like it does not apply to you, use the lessons it teaches to apply them to your life going forward. Even if you do not like the course at all, you must complete it to get a discharge in your Bloomington bankruptcy. Courses are offered in-person, by telephone or online in English and Spanish and online in other languages. Once you complete the counseling, file your certificate of completion with the Court. To make sure you do not forget, take the course and file it before your 341 Meeting.
Attend Your 341 Meeting
After you file your Bloomington bankruptcy, the Court sends notice to your creditors that you are filing bankruptcy and that you will have a 341 meeting. While this notice invites your creditors to attend the 341 meeting and object to your filing, creditors rarely do either. While you may think it would be best if creditors did not know you filed, the creditors must have notice for you to successfully file Chapter 7 bankruptcy. With that in mind, keep an eye out for a non-deliverable Form 309A, which tells you that a creditor did not receive notice of your bankruptcy. If you receive one of these notices, you can amend your bankruptcy forms, but make sure your amendment is verified with Form 106Dec.
Your creditors are not the only ones who receive notice of your 341 meeting - you receive notice as well. You must attend this meeting so the trustee can ask you questions. While you will likely be nervous, remember that the trustee does not determine if you can file for bankruptcy and you don’t need to convince the Chapter 7 trustee that you were right in filing. The trustee is there to verify the information on your Chapter 7 bankruptcy forms. The location of the 341 Meeting is based on the county you live in. Most people who file Chapter 7 bankruptcy in Bloomington, Illinois, will have their meeting at the Law and Justice Center in Room 702 located at 104 West Front Street. You can park in the pay parking lot off S. East Street. Arrive no later than fifteen minutes before your 341 meeting. Prepare by reviewing your Bloomington bankruptcy forms in advance and don’t forget to bring your picture ID and original social security card!
Dealing with Your Car
We already mentioned the Statement of Intention which people filing a Chapter 7 bankruptcy in Bloomington need to complete if they have a car secured by a loan. If you want to keep your car, you will likely need to sign a reaffirmation agreement. Signing a reaffirmation agreement means that you want everything regarding the loan on your car to stay the same way it was before filing your Bloomington bankruptcy case. Be sure to name the creditor on the Reaffirmation Agreement form instead of the creditor’s representative, as required by the Illinois Bankruptcy Court.
When you file a Chapter 7 bankruptcy in Bloomington, you also have the option of redeeming your car, which allows you to buy the vehicle for what it’s worth, even if you owe more than that on the loan. This is a good option if your car is worth much less than you have to pay on the loan and you can come up with the money as a lump sum.
If you owe more on your car than the car is worth and you can’t redeem it or if keeping the car just doesn’t make good sense financially, you can surrender the vehicle. When you surrender the car, you give it back to the lender and your debt is discharged.
Illinois Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Bloomington
Illinois Means Test
In Bloomington, before you file a Chapter 7 bankruptcy, you must take the Illinois bankruptcy Means Test. This is a two-step test. First, if your income is lower than the median income for your household size in Illinois, then you are finished and you qualify for a Chapter 7 bankruptcy in Bloomington. If your income is higher than the median income, complete Official Form 122A-a of the Chapter 7 Means Test Calculation to show that you can only afford to pay allowed expenses and no more. If you can do this, then you pass the Illinois bankruptcy Means Test, and can file your Chapter 7 bankruptcy in Bloomington. Report your Means Test results on Official Form 122A-1, Part 2, Line 14. Disabled military veterans who incurred their debts primarily during active duty are exempt from the Illinois bankruptcy Means Test.
Median Income Levels for Illinois
Illinois Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Illinois
Illinois Fee Waiver Eligibility for Cases Filed On or After May 1, 2021
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Illinois Bankruptcy Forms
The Central District of Illinois bankruptcy forms are on the court’s website. When you file bankruptcy in Bloomington without a lawyer, you can also review the Court’s helpful guide to understanding bankruptcy. When completing the Bloomington bankruptcy forms, remember to be careful and take your time. Review your documents to create an accurate budget and don’t forget to list any creditors!
Illinois bankruptcy exemptions protect equity you have in your assets (property you own). Assets that are protected are considered “exempt” and the Chapter 7 bankruptcy trustee can’t use that property to pay your debts. People filing Chapter 7 bankruptcy in Bloomington can’t use the federal bankruptcy exemptions. When filing a Bloomington bankruptcy, a married couple may double many of their exemptions, but even if you are not married, you could possibly keep all of your retirement savings, your car, and the things in your home.