Written by Attorney Jacquelyne N. Mosley-Pastrana.
Updated July 27, 2020
The Windy City has the best summers and some of the coldest winters. Even if it isn't the summertime, there is nothing like a city of winners. It isn't called the Best Sports City for nothing, as some of the best sports teams play for the city. There is a team sport for everyone. You can cheer for the White Socks in the Southside. You can watch the Bears in Soldier Field, the Bulls at the United Center, and the Chicago Sky at Wintrust Arena. You can even sit at the edge of your seat when the Chicago Fire Soccer Club hits the field. Only in Chicago can you fly the W with the Cubs and experience the Stanley Cup with the Blackhawks Hawks. It costs to keep things up in this city. Living in Chicago, you know the reality of property taxes, income taxes, and taxes in general. It is costly to live in the city, and debt can stack up. Many Chicagoans have removed the stacks of debt and made way for a positive financial future by filing bankruptcy in Chicago. Take Jim Dooley, former player for the Bears who filed for bankruptcy. He was in serious debt but found his financial way. He later became a successful consultant for the Bears offensive line.
Bankruptcy is a legal process to help honest people reclaim their financial future. Most Cook County residents that file bankruptcy in Illinois, file Chapter 7 bankruptcy. It is reserved for those with limited income and wipes away your dischargeable debt. Dischargeable debt is debt that can legally be wiped away, such as credit card and personal loan debt. It takes anywhere from four to six months to complete. Those who do not qualify for Chapter 7 bankruptcy in Chicago opt for Chapter 13 bankruptcy. Chapter 13 bankruptcy arranges a payment plan to pay off some of your debt. The Chapter 13 plan can also incorporate paying off your non-dischargeable obligations. Non-dischargeable debt is a debt that can’t legally be wiped away, such as student loans and recent tax debts. Most people file Chapter 7 over Chapter 13 because they can’t reasonably repay their debt, and with Chapter 7, they can get back on track more quickly.
There is free assistance available to help you with filing bankruptcy in Chicago. The Illinois Bankruptcy Court offers a Guide for Individuals Filing a Bankruptcy without an Attorney. The Chicago Bankruptcy Court also has a Bankruptcy Help Desk at 219 S. Dearborn, Chicago, IL 60604. You can review the services it offers to guide you with your Chicago bankruptcy. The hours of the Help Desk vary based on its volunteers, but you can check the hours of the Help Desk online or by calling 312-435-6032. You can also get help from CARPLS through its legal advice hotline 312-738-9200. Legal Assistance Foundation of Metropolitan Chicago has various legal clinics around the Chicago area where you can speak with a lawyer about your legal issue. Chicago Volunteer Legal Services Foundation helps with individual Chapter 7 cases, and it has 26 legal clinics with volunteer lawyers to help you with your bankruptcy. Illinois Legal Aid can also offer Self Help when you complete the form online. Prairie State Legal Services provides bankruptcy help to clients based on need. There are many ways these non-profits will assist you, but most will not complete your paperwork for you. Upsolve has electronic bankruptcy software for that, and you may qualify for direct assistance.
Chicago Bankruptcy Lawyers - Estimated Cost
You are capable of filing bankruptcy in Chicago on your own. Some still opt to hire an attorney to help them through the process. The average Chicago bankruptcy lawyer cost is $900-$1,200. The amount you pay depends on how straight forward the case is. You may find hiring a bankruptcy attorney worthwhile if you are not filing the standard bankruptcy. Chapter 13 bankruptcy may be a bit more challenging to file because you will need to create a payment plan. The plan encompasses all your debt, including the debt that is not dischargeable. Chapter 7 bankruptcy can get complicated if you have numerous creditors. You can get a free consultation with some bankruptcy attorneys near you to weigh your options. Asking how fees are calculated and can help you to gauge the cost you will pay further. You can also ask questions that will make you feel more comfortable choosing an attorney; there are benefits to getting a competent lawyer to help you, so their price is not the only thing to go by.
How to File Bankruptcy in Chicago, Illinois for Free
Many people think they can’t afford to file for bankruptcy because they can’t afford an attorney, but that is not true. When you get free help and follow the steps below, you will find that filing bankruptcy in Chicago was not as difficult as you thought it would be.
Collect Your Chicago Bankruptcy Documents
Before you file your Chicago bankruptcy, you need to get together the financial documents you will need. The types of financial material you will collect are related to your income, debts, and assets. Income is money you make or earn, debt is money that you owe, and assets are the property you own. You can start by printing your credit report, which you can get online for free. The information on your credit report will give you a glimpse into the creditors you need to list in your bankruptcy. Look over it, and make a list of anyone not listed, such as court judgments or personal loans from family and friends. It may seem like a good idea to leave them off, but the Court requires you to be forthright about your finances to file bankruptcy successfully. You will gather six months of pay stubs, your W-2s, and the most recent two years of your taxes. You may not have these on at your fingertips, but a quick call to your current or former employer can get you your pay stubs and W-2s. Checking with your tax preparer or an online request to the IRS will get the taxes you need. Get statements from your bank, investment, and retirement accounts. Statements are usually available online or a local branch. You will also need your vehicle registration and valuations for the property you own. It is also essential to have your photo identification and social security card. It may seem like a pain getting these documents but getting them now will help you every step of the way.
Take Credit Counseling
Before you can file your Chicago bankruptcy, you take credit counseling to learn your options and alternatives. You will go through the exercise of creating a budget and evaluate how you spend money and whether repayment is doable. Do not take the course personally even if it’s information you already know. Plus, many people feel like it makes assumptions about how you incurred debt by making it out to be your fault, which is a common misconception. If you feel like the information borders on insulting, you are not the only one who feels this way. The course is a requirement, so take what you can out of it to get your certificate. Many Chicagoans decided bankruptcy was their best option after using the tools in this course.
This one hour approved credit counseling course can be completed in person, online or by telephone in English and Spanish. The course is also available online in other languages. It costs $10-$50 dollars, but if you fall below 150% below the poverty line, you may qualify to take the class for free. After you finish the course, you will receive your certificate of completion. You will submit the certificate to the Court when filing bankruptcy in Chicago. The certificate is valid for six months.
Complete the Bankruptcy Forms
Your bankruptcy forms can be a daunting task to complete. Some Chicagoans use bankruptcy software to complete the paperwork consistently for their Chicago bankruptcy. If you don’t use bankruptcy software, you can use Adobe to type in your answers. On your Voluntary Petition for Individual Debtor, you should complete the boxes and mark "Pro Se" meaning you don’t have a lawyer. Leave the boxes for the petitioner preparer blank. Complete Schedules with the items you own owe and what you make. It’s a mistake to list nothing as you have clothes, shoes, and jewelry and if you leave that information off your schedules, your Trustee may wonder what else you’re hiding. The forms get pretty specific and even ask that you list your pet Bently from PAWS.
You can find all the forms you need here and on the Illinois Bankruptcy Court's Website. The Court also has a Creditor Matrix Program to help you electronically submit your list of creditors. This electronic program is helpful to create and provide your list of creditors, and later you can update it electronically if needed.
Get Your Filing Fee
To file your bankruptcy, you must satisfy the filing fee. It costs $335 to file a Chapter 7 bankruptcy in Chicago and $310 to file Chapter 13 bankruptcy. The Court accepts cash, cashier's check, certified check, or money order. You must settle your filing fee to avoid having your case dismissed. If you can't afford to pay the whole Chapter 7 fee at the time you decide to file, you can apply to pay the fee in installments. The Court will let you pay up to four smaller amounts after filing bankruptcy in Chicago until you have paid the $335 fee. If you can’t afford to pay the fee and your income falls 150% or more below the poverty line you can apply for a fee waiver. Submit your fee waiver with your bankruptcy filing. If your fee waiver is denied, you can pay your fee in installments. If your installment payment is granted, you will have 120 days to complete your four payments.
Print Your Bankruptcy Forms
Be sure to print your bankruptcy forms one-sided as required with documents that will be submitted to the Court. Your Chicago bankruptcy filing will be more than 70 pages with attachments. If you can’t print at home, you can print at the Chicago Public Library locations for $0.10 a page. Most Chicagoans review their bankruptcy filing carefully after printing and sign each designated space. It's recommended that you make at least one copy of everything you are submitting to the Court. The Clerk will stamp your copies, so you have a copy of your complete bankruptcy filing. If you don’t print yourself a copy and you ever need one, the Clerk will copy it at a much more expensive rate of $0.50 a page.
Go to Court to File Your Forms.
You will file your Chapter 7 bankruptcy in Chicago in the Eastern Division of the Illinois Bankruptcy Court for the Northern District. The Chicago Bankruptcy Court is located at 219 South Dearborn, Chicago, IL 60604, in the Dirksen Federal Building. There is metered parking and parking lots nearby, but they are costly. You can use an app such as ParkWhiz to find parking, but the courthouse is also easily accessible by train. Both the Blue and Redline train travel close to the courthouse.
When you get to Court, you will need to pass through security and a metal detector. Go to the Clerk's office in Room 713. To file your bankruptcy, you should have your bankruptcy forms, including your Certificate of Approved Credit Counseling. You should also have your filing fee or either your Application to Pay Fee in Installments or Application for Waiver of Fee. Filing bankruptcy in Chicago in person allows you to have the Clerk review your forms for completeness. Once you file, the Court will provide you your case number, your Trustee’s information, and the date for your 341 Meeting. The hard work is done.
Mail Documents to Your Trustee
Your Trustee manages your Chapter 7 bankruptcy in Chicago. The Trustee will review your bankruptcy case and determine whether there are assets to repay your creditors. The Trustee only has about a month from your bankruptcy filing to review your case before the Chapter 7 Meeting of the Creditors. At least seven days before your 341 Meeting you should send the Trustee your most recent tax returns, and pay stubs from the 60 days before your Chicago bankruptcy was filed.
The Court sends notice to your creditors that you are filing bankruptcy in Chicago. The notice allows your creditor to object, but rarely do objections happen. To lock in your bankruptcy's success, you want the Creditor to have notice. If you get a non-deliverable Form 309A, it means one of your creditors didn’t get notification about your bankruptcy. To ensure notice, you can find the creditor's correct address and mail Form 309A. Then those savvy Windy City filers amend their bankruptcy matrix electronically.
Take Bankruptcy Course 2
A significant step to getting your dischargeis to take the pre-discharge course. This is a simple step but often forgotten by busy Cook County filers. You are probably busy, but taking 90 minutes to take the approved credit counseling course will ensure you have a successful Chapter 7 bankruptcy in Chicago. In the pre-discharge course, you will decide how you rate your expenses, make a budget, and make goals for your future. Some think the course is presumptuous because it assumes you will have money left to save when this is not always the case.
To get your discharge for your Chicago bankruptcy, take an approved credit counseling course. It is offered in-person, by telephone or online in English, Spanish and online in other languages. Once you finish the course, you’ll get a certificate of completion to file with the Court.
Attend Your 341 Meeting
Attend your Meeting of the Creditors for a successful Chicago bankruptcy. Prepare for your hearing and dress business casual, not be opera stylish or Lollapalooza laid back. To get to your 341 Meeting, go to the courthouse where you filed your forms and head to room 800. During this meeting, you are required to verify your identity, so make sure you bring your picture ID and social security card. Creditors usually don't show up, and it will likely be just you and the Trustee. The Trustee will swear you in and you’ll be expected to answer questions with short and forthright answers. Cook County residents have gotten through this process by keeping their answers honest and short.
Dealing with Your Car
During your Chapter 7 bankruptcy in Chicago, you can choose what to do about your car. If you need a vehicle and Chicago Transit won't cut it, you can find a way to keep the vehicle. If it’s already paid off, you can protect it with an exemption, at least up to a certain amount. If you are current on your payments, you can reaffirm the loan with nearly the same terms. The downside is that the debt won't be wiped away with your bankruptcy, but so long as you keep up with the payments, you keep the car. You can redeem the vehicle by making a lump sum payment of the value of the vehicle. Many Cook County filers don't have this kind of money available, but there are redemption lenders. It is similar to taking your Amalgamated Bank of Chicago Credit Card and transferring the balance to another card. The downside is that typically it is at a high-interest rate being locked back into a loan that you can’t discharge. Reaffirmation and Redemption require Court approval and additional paperwork from you. Finally, some filers make transportation arrangements and decide to surrender the car. Return the vehicle to the lender, and your debt is discharged through your Chicago bankruptcy.
Illinois Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Chicago
Illinois Means Test
Folks hoping to file a Chapter 7 bankruptcy in Chicago are required to pass the Illinois Bankruptcy Means Test, either based on the household income or by showing through certain allowed expenses that they have no money to pay their debts. There are certain situations where the Means test doesn’t apply. One way you can bypass the test is if your debt is not primarily consumer debt.
Median Income Levels for Illinois
Illinois Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Illinois
Illinois Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Illinois Bankruptcy Forms
When you are completing your Illinois bankruptcy forms, remember that your list of creditors is required to be typed. You should also review your bankruptcy forms for consistency before filing bankruptcy in Chicago to ensure that all the creditors on your Schedules also appear on your list of creditors.
Illinois Bankruptcy Exemptions
Some states offer filers the option of using state or federal bankruptcy exemptions to protect their property after filing bankruptcy. In Chicago, you have to use the Illinois bankruptcy exemptions. The federal bankruptcy exemptions are not available for folks filing bankruptcy in Chicago.