Written by the Upsolve Team.
Updated December 9, 2019
As the unemployment rate in Springfield decreases, and Springfield keeps making news as being one of the most affordable cities in Illinois, many people may feel left out of the good news. This may be because the median household income is below the national average, of $60,336. Regardless of the reason, when you feel like you just can’t make ends meet and you’re always playing catch up, finding a way out is critical. People filing bankruptcy in Springfield will find themselves in good company - Abraham Lincoln declared bankruptcy in 1833. You don’t have to be a commander-in-chief to benefit from bankruptcy, though. We will guide you through the process of getting a “fresh start” and make it as simple as possible.
When you “declare” bankruptcy, what you are really doing is telling the court that you are in over your head and that you need help because you can’t repay your debts. Filing bankruptcy in Springfield provides protection from your creditors and peace of mind that you can move forward. You can breathe a little easier and start enjoying life a little more - maybe taking your kids to Knight’s Action Park, get extra oil in your chili, or just take a walk through Y Block Downtown with a little less weight on your shoulders. There are many reasons people file for Chapter 7 bankruptcy in Springfield. A Chapter 7 allows you to protect the things you need to live while giving you relief from your creditors. Sometimes, if you have a lot of expensive things, some of your unprotected assets may be sold to pay some (or all) of your debt. If you have assets that you can’t protect that you want to keep, you might consider a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy. When you file forChapter 13 bankruptcy in Springfield, you agree on a plan to pay at least a portion of your debts over three to five years.
Many people fear bankruptcy, but that fear is usually based on partial truths and myths. People often believe that everyone will know if they have filed a Springfield bankruptcy. This is not true. If you live in Springfield, your name won’t be published in the State Journal-Register or any other newspaper. Many Springfield residents believe that filing bankruptcy in Springfield is too expensive, too difficult, or just not available to someone “like them.” Upsolve can help you file on your own for no cost and you may be able to get free legal help if your case is complicated.
Springfield Bankruptcy Lawyers - Estimated Cost
If you have a lot of things you want to protect, your living situation is unique, your debts are not just credit cards and medical debts, or any other thing that adds complications, you may want to hire a bankruptcy lawyer. A bankruptcy lawyer can walk you through the process and make sure your interests are protected even if you have a complicated case. When considering filing bankruptcy in Springfield, you may want to speak to an attorney first; if nothing else, you can ask them to explain the different types of bankruptcy you should consider.
How much does a Springfield bankruptcy lawyer cost? Typically, between $900 to $1,200, but the cost of a bankruptcy lawyer may vary on a case-by-case basis. You usually don’t have to pay for the first meeting with an attorney (the initial consultation). Attorneys offer initial consultations for free and you can use that to help determine the best course of action when filing bankruptcy in Springfield. Learning more about the process and meeting with an experienced Springfield bankruptcy lawyer is a free way to find out whether a bankruptcy is right for you, whether your case is too complicated to file on your own, and what you can expect from the process.
How to File Bankruptcy in Springfield, Illinois for Free
Maybe you have already decided that you are tired of fighting to get out of debt and you are ready to file. But the question of “how to file bankruptcy in Springfield?” remains. Maybe you have already met with a bankruptcy lawyer, have determined that you want to file a Chapter 7 bankruptcy and now you’re stuck. Don’t worry - all you need to do is carefully follow this guide, use the other resources provided, and soon you’ll find that you have successfully filed a Chapter 7 bankruptcy in Springfield without an attorney.
Collect Your Springfield Bankruptcy Documents
“Before anything, preparation is the key to success.” Alexander Graham Bell may not have been talking about bankruptcy, but his advice applies here, too. Your first step is to prepare by collecting your financial documents. This helps you understand your financial situation and prepare to complete your packet. Many people begin by requesting a free copy of their credit report. Additional documents you need to complete your Springfield bankruptcy include your paycheck stubs, bank statements, and vehicle registrations. Depending on what else you have, you may need additional documents, including copies of your 401k or pension statements, mortgage statements, rental contracts, life insurance policies, and similar documents. You will certainly need a personal photo identification, a social security card, and your last two years of tax returns. If you’re planning to meet with an attorney about a possible Chapter 7 bankruptcy in Springfield, you may want to bring these documents to your initial consultation. Collecting your documents first will help speed things up and having them when you meet with an attorney will help you file faster, even if you eventually complete the forms yourself.
Take Credit Counseling
Another step in preparing to file a Chapter 7 bankruptcy in Springfield is completing a credit counseling course that is supposed to help you understand bankruptcy and other debt relief options available to you. To file, you need the certificate that proves you have completed the course. When filing bankruptcy in Springfield, you must use an approved credit counseling agency. Be careful to take your credit counseling course ONLY from an approved agency and be wary of agencies that spend a lot on advertisements but are not approved. You should expect to pay between $10 and $50 for the course and each agency sets its own rate. Once the course is completed, save the certificate of completion because you need to submit it with the rest of your bankruptcy packet when you file your Illinois bankruptcy case.
Complete the Bankruptcy Forms
Completing your bankruptcy forms is the most time consuming step in filing Chapter 7 bankruptcy in Springfield. Plan to work on it over more than one day. If you are intimidated, take it one step (or form) at a time. If you have decided that you need to file a Chapter 7 bankruptcy in Springfield, do not delay just because the forms are cumbersome. Start at the beginning and make progress bit by bit. The purpose of the many forms is to tell the bankruptcy court about your recent financial life. If you can follow instructions and complete the checklist provided by the Illinois Bankruptcy Court, you can complete your packet without an attorney. You will need to complete approximately 24 forms, including the Voluntary Petition for Individuals Filing for Bankruptcy, which tells the court who you are, the types of debt you have and why you are filing bankruptcy in Springfield and not elsewhere. You will also need to provide in-depth information about your financial situation through various schedules and statements. When filing Chapter 7 bankruptcy, you can request that the bankruptcy court communicate with you by email by completing the DeBN form. Be aware that you should always use the official court forms to make sure your case proceeds smoothly and Upsolve’s process only uses the official forms. You also want to be very careful to avoid some of the mistakes that many people make when filing bankruptcy in Springfield. Always be careful to tell the complete truth when filing your Chapter 7 bankruptcy. People who forget to list creditors or forget about assets can create delays in processing their case, have a case dismissed, or otherwise experience unintended consequences. You never want to purposefully hide something when filing bankruptcy and the Illinois Bankruptcy Court warns that bankruptcy fraud is a felony. Just remember, everything you own is an asset and all assets must be listed.
Get Your Filing Fee
The fee for filing Chapter 7 bankruptcy in Springfield is the same as it is in the rest of the country - $335. The filing fee is really 3 fees all in one - the fee for the case, an administrative fee, and a trustee’s fee. You should plan to pay this fee up front, although you may be able to qualify for a fee waiver or request to make payments over time. If you can’t pay your filing fee at the time you file, you can request to pay your filing fee in installments. You may apply for a fee waiver if your household income is below 150% of the federal poverty guidelines and you will not be able to afford an installment agreement.
Print Your Bankruptcy Forms
After preparing your Springfield bankruptcy forms, print them out so you can submit them to the court as a complete packet. Review the printed packet one last time to ensure the information you have provided for the purpose of filing bankruptcy in Springfield is complete and accurate. If you have hired a bankruptcy lawyer, they will print out a copy of all documents before filing your Chapter 7 bankruptcy in Springfield. The attorney will review all the required documents with you. If you don’t have an attorney, you will need to print the documents and review them yourself. If you don’t have a good printer that can print 2 copies of the forms, consider what alternatives you have. For example, the Lincoln Library will let you submit your request from home and just stop by to pick up your printed documents within 24 hours. But, they charge $0.25/page, which can make printing 100+ pages quite pricey.
Go to Court to File Your Forms
Once your forms are printed and your Springfield bankruptcy packet is complete, your next step is to file your Illinois bankruptcy case. You must file your forms in the correct court in Illinois, but you’re lucky because for Springfield, Illinois, the courthouse is right downtown at 600 E. Monroe Street, right around the corner from the Lincoln Library. Before you go, read the court’s guidelines for communicating with the court. You must bring a photo identification with you to the courthouse and should leave as many personal items at home or in your car as you can. When entering the federal courthouse, you will need to go through a metal detector and have your loose items scanned/searched by security. The fewer items you bring, the faster the process will be. Do not bring any weapons, including pocketknives. 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
When you file a Chapter 7 bankruptcy in Springfield, your case will be assigned to one of twelve Chapter 7 bankruptcy trustees. You will meet with your bankruptcy trustee at least once, during your 341 meeting. Your bankruptcy trustee is responsible for administering your case. After you file, even if you signed up for electronic correspondence by completing the DeBN form, the trustee will communicate with you by regular mail. Watch out for mail from the trustee, because the trustee will ask that you provide certain financial documents, like pay stubs and tax returns. If you have not received anything from your trustee within 10 days after your case is filed, call their office to make sure you have not missed anything. It’s vital to carefully review any correspondence that you receive from the trustee assigned to your Illinois bankruptcy case. You may not receive your Chapter 7 bankruptcydischarge if you fail to cooperate with your trustee.
Take Bankruptcy Course 2
After filing your case, you must complete a second course on managing finances to receive a discharge in your Illinois bankruptcy case. This course has many names - budget counseling, pre-discharge counseling, or debtor education. The many names show the goal of the course: to teach money management skills and how to avoid credit mishaps after filing a Chapter 7 bankruptcy in Springfield. Once you complete the counseling, file your certificate of completion with the court. This form should be filed no later than 60 days after the 341 meeting, but it will be easiest for you to file it before your 341 Meeting. There are manyapproved debtor education providers that Springfield residents can use.
Attend Your 341 Meeting
After you file, the court will send you a notice with the date of the meeting of creditors, also known as the 341 Meeting. You must attend this meeting. Your creditors may also attend, although it is not common that they do. If a creditor shows up, it’s typically to ask questions about the location of the property, like a car, that serves as collateral to a loan and information you provided to get a loan. The trustee will ask you questions and you should answer honestly. Remember, the trustee is not judging you, does not determine if you qualify for bankruptcy, and doesn’t need you to convince them that you “deserve” to file. The trustee is making sure that the information on your Chapter 7 bankruptcy forms is complete and truthful. The meeting of creditors will be held about one month after filing your Illinois bankruptcy. The location of the 341 Meeting is based on the county you live in. Most people who file Chapter 7 bankruptcy in Springfield and live in Sangamon County will have their meeting on the first floor of the Illinois Building on 607 E. Adams Street. Arrive at least fifteen minutes early to your 341 meeting. Prepare by reviewing your Springfield bankruptcy forms and supporting documents in advance and don’t forget to bring your picture ID and original social security card!
Dealing with Your Car
For many people, their car is the most important asset. Most people want to keep their car after filing bankruptcy in Springfield. If you own a vehicle with outstanding debt, you have a number of choices in your Chapter 7 bankruptcy case. If you would like to surrender your car to the lender, the lender must ask permission from the court in to retake your car. This request is called a Motion for Relief from Stay. You can work with the lender to return your car, but there is nothing you need to do with the court. Your obligation to pay the loan will be discharged along with the rest of your debt in your Chapter 7 bankruptcy. If you want to keep the car and have a loan, you will need to enter into a reaffirmation agreement or redeem the car. A reaffirmation agreement says that you want to keep your car and pay the loan as if you had never filed bankruptcy. If you choose to reaffirm, make sure you follow the Illinois Bankruptcy Court rule to name the creditor and not the creditor’s representative on the reaffirmation agreement. Redeeming the vehicle requires you to pay the full value of the car, in full, all at one time to get clear title and discharge what’s left owing on the loan.
Illinois Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Springfield
Illinois Means Test
To qualify for a Chapter 7 bankruptcy in Springfield, you must take the Illinois bankruptcy Means Test. You can see this test is broken into two parts. In the first part, if your income is lower than the median income for your household size, then you pass and do not need to complete the second part. 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 don’t have any money left after paying allowed expenses. If this second part of the Illinois bankruptcy Means Test shows that you don’t have any money to pay your creditors, you pass the Means Test and can file a Chapter 7 bankruptcy in Springfield. Report your Means Test results on Official Form 122A-1, Part 2, Line 14. If you are a disabled military veteran who incurred your debt primarily during active duty, you 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, 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
Filing bankruptcy in Springfield requires you to complete about 24 official national forms. Theseforms are available for free online. Some of the Illinois bankruptcy forms are quite long and seemingly complicated, so make sure you give yourself enough time to go through everything. Prepare, complete the forms with care, then review the forms at least once to make sure what you entered is true and complete and make sure you list all of your creditors!
When you file Chapter 7 bankruptcy in Springfield, you can protect equity you have in your assets using Illinois bankruptcy exemptions. Illinoisans are not permitted to use federal bankruptcy exemptions when filing bankruptcy in Springfield. Many people will keep most or all of their property under Illinois bankruptcy exemptions.