Bankruptcy FAQ’s

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The Best Bankruptcy Chicago Attorneys

At Billbusters, Ledford, Wu & Borges, LLC, we work closely and carefully with you throughout the bankruptcy process. In addition to helping you determine eligibility, we’ll be your guide to help you file your Chapter 7 Bankruptcy

Chapter 7 Bankruptcy FAQ’s

How much does a Chapter 7 cost?

How much does a surgery cost? The truth is, it depends. A case involving five properties, three cars and four lawsuits will likely cost more than one without any of these things. No two cases are the same. We do not charge a fee based solely on the amount of the debt involved. Instead, our fee is based on the complexity of the case, which can only be determined by an experienced bankruptcy attorney. We will be able to quote a reasonable fee at your No Obligation Consultation after examining each individual case closely.

We do offer same day and no money down filing for qualified individuals and reasonable payment plans for all individuals.

Why do I have to fill out these forms? I just want to talk to an attorney and know my options and how much you charge.

Obviously, you are in our office because you need legal advice, but what we tell you is based on what you tell us. No two cases are the same. It’s impossible to properly advise you without knowing what’s going on in your financial situation. In addition, federal law requires a person filing bankruptcy to disclose all of her debts, assets, income, expenses and financial affairs in recent years. The more accurate and complete your information is, the better advice we can give you. Based on the information that you provide, we analyze your situation, explain your options, recommend the best course of action and quote you a fee.

All information we obtain during the phone consultation and face-to-face interview (and the entire course of representation if you hire us) is confidential.

Is my employer going to be notified?

Usually, no. That is not a standard procedure. However, some people may want their employer to be notified of bankruptcy filing when their wages are being, or about to be, garnished. The notice will tell the employer to stop the garnishment immediately. Also, keep in mind that the information on a bankruptcy petition is public record. While it usually does not get published on the newspaper or broadcast on TV, anyone can access such information from the court record if they want to take the time and pay the expense of doing so.

Are they going to take my house, car, stuff in the house and tax refund?

In most cases, no. The law allows a debtor to exempt certain assets within specific limits, including a tax refund, from creditors. In Illinois, as in most states, the exemptions are determined by state law. The limits are sufficient for most people in Illinois.

You must, however, be current with your mortgage payment, car payment, etc and have all necessary insurances if you want to keep these assets, or the court may allow the lender to foreclose on or repossess the collateral.

Do I have to close my bank account?

Usually not. The only time you would have to close your account is if you have a debt owed to your bank. Our attorney will explain the details.

Can you guarantee my case will work before I pay you?

No. There is no such thing as absolute guarantee in any legal case because many things are beyond the control of the lawyer. For example, a debtor must tell the truth, fulfill the documentation requirements, attend the meeting of creditors, cooperate with the trustee and U.S. Trustee, and undergo credit counseling and debtor education, etc. If the debtor does not do her job, or worse yet, lies to the court, the case will fail and can have other disastrous results. What we can guarantee is that we will provide you with excellent legal representation and advice, make you aware of all of your responsibilities and assist you in fulfilling them, be available to answer your questions and do our best to ensure that the process goes smoothly. If we do not believe that a case will work, we will not let you hire us even if you want to pay us. If we believe that there may be an issue, we will let you know well in advance.

Chapter 11 Bankruptcy FAQ’s

What makes the prospect of bankruptcy difficult for small business owners and entrepreneurs?

Bankruptcy is a scary word and it should be.

It’s difficult for a variety of reasons. Chapter 11 in particular requires a viable underlying business, the cooperation of creditors, and the willingness to make some difficult decisions to keep the business going.

Generally, business owners see bankruptcy as a sign of failure. They fear losing both the financial equity and the “sweat equity” they’ve put into this business – something that, in many cases, they’ve poured all their heart and soul into.

For this reason, most small business owners contact a bankruptcy attorney too late. But Chapter 11 is not the death of the business. Quite the opposite. It gives the small business owner with a viable business the opportunity to restructure debts, learn from past mistakes, and come out a leaner, more efficient, and more effective business.

In short, bankruptcy can give you a real opportunity to succeed moving forward.

Do you need to shut down (close doors, stop making things, etc.) if you file for Chapter 11? does filing for bankruptcy mean the end of your business?

Absolutely not.

The purpose of Chapter 11 is to keep the doors open. Chapter 11 can help keep the business a going concern. Businesspeople can use the protections of bankruptcy law to restructure into a business that can be successful on its own going forward.

Don’t take my word for it – look at General Motors, United Airlines, etc. They went through Chapter 11 bankruptcy. And after significant restructuring and concessions, these organizations are once again operating successfully and independently.

It’s said that Chapter 11 is more complicated than Chapter 7 personal bankruptcy. Is this true?

It’s very much true. Chapter 11 cases are complicated – strict deadlines, tight cash usage constraints, and oversight of the U.S. Trustee’s office. There are significant requirements regarding documentation, reporting, budgeting, and plan implementation. All of this requires the guidance of an attorney who really understands the process.

What is your role, as a bankruptcy lawyer, in helping a business owner or entrepreneur through the bankruptcy process?

The role of the bankruptcy lawyer is multi-tiered:

  • Preparing to file. We advise the client on the Chapter 11 process and requirements, assist in preparing and gathering the necessary documentation, and prepare “first day motions” that must be filed immediately.
  • Prosecution of the case. We ensure that all motions are filed and prosecuted timely. We prepare the disclosure statement and plan of reorganization. We negotiate with creditors to ensure sufficient support for the plan of reorganization. Finally, we help to guide the client’s implementation plan after the court’s approval.
  • Developing an exit strategy. There are several ways a Chapter 11 case may end: Completing the original bankruptcy plan, the sale of assets to another entity, or obtaining financing to avoid the court’s protection or conversion to Chapter 7. Working with the client to develop a long-term exit strategy is vital.

Does experience matter in Chapter 11? What would older or more experienced lawyers bring to the table when it comes to small business bankruptcy?

Experience is essential. An experienced Chapter 11 attorney can guide the client through the process. A lawyer who knows his way around Chapter 11 cases is less likely to struggle with the strict timing requirements and immediacy of essential issue resolution, will have a broader view of potential exit strategies, and can better handle unanticipated issues.

Also, an experienced attorney would know that the plan of reorganization should be in the best interests of all parties involved. He or she will prepare a plan with that in mind. They would not, for example, offer a plan paying fifty cents on the dollar when the creditors could foreclose on assets and get seventy-five cents on the dollar. In other words, a good lawyer will give a client realistic expectations and work to make them come to be.

Describe your personal opinion of the bankruptcy system as a whole. What do you think works well? What do you think doesn’t work so well? What would you change?

As a debtor’s attorney, I will always believe that the bankruptcy system, particularly in Chapter 11 cases, gives too much power and authority to creditors. Secured creditors, specifically, can blow up a case by simply refusing to negotiate for an effective reorganization in a reasonable manner.

That said, the system is generally fair. The debtor is given a real opportunity to present a plan of reorganization while under the shelter of the court and convince creditors that it’s in their best interests to support the plan.

The system is genuinely effective when:

  • There is a viable underlying business with an opportunity for successful reorganization.
  • The debtor takes the responsibilities of being a “Debtor in Possession” seriously, follows the rules, works within the boundaries of the Bankruptcy Code’s restrictions, and is willing to compromise.
  • The creditors are willing to accept a reorganization plan that, while it may change their contractual rights, is in their best interest in the long run.

Chapter 13 Bankruptcy FAQ’s

How much is my monthly payment is my Chapter 13 bankruptcy going to be?

How much is your mortgage payment? How far behind are you? How much do you owe on your car? Etc., etc., etc… Plan payments vary from case to case, depending on a number of factors such as the types and amount of your debt, the value of your assets, the length of the plan, and your income and expenses both before and after filing, etc. Because a lot of information and documents are needed in order to prepare a Chapter 13 plan, it is often impossible to tell during the initial interview exactly how much a plan payment will be, but a reasonable estimate will be provided.

The main purpose of the No Obligation Consultation with our office is to determine if a Chapter 13 plan will work for you. Once we determine it will, our primary job is to ensure that your plan payment is as affordable as the law permits while protecting your assets and getting you to discharge as quickly as is feasible. This is why you meet with an experienced bankruptcy professional to prepare your plan.

Do I have to pay all of my debt?

Most people who file Chapter 13 do not have to pay off their debt. Usually, secured debt such as mortgage arrears and car loans must be paid in full in order for the debtor to retain the collateral (the house or car), while only a portion of the unsecured debt such as credit card debt and medical bills needs to be paid. The percentage of the unsecured debt to be repaid varies from case to case, depending on the facts of each case.

Can a plan be rejected?

Yes, and many filed with the court are. A Chapter 13 plan must satisfy a list of requirements. In addition, the debtor must fulfill certain duties, e.g., attending the meeting of creditors, making payment under the plan, and providing certain documents. Failure to do those things could be grounds for denial of confirmation and dismissal of the case.

Our job as your attorney is to help you comply with the law and make sure your plan gets confirmed. We will prepare a plan for you that can be confirmed, walk you through the process and do everything within our power to make your plan work. Remember, we almost always put most of our fees into the plan payments, so we won’t file a plan that we do not believe will be successful.

What if my hours at work get cut, I lose my job, or I retire?

The bankruptcy law contemplates these situations in people’s lives and often provides solutions. A plan sometimes can be modified in light of the change of circumstances; the payment may be reduced or the plan period may get extended. Other times it may be possible to convert the case to Chapter 7. We as your attorneys will help you analyze your situation, explain your options and recommend the best course of action.