Illinois Bankruptcy Law – A Brief Perspective

Said state will be evaluated and declared by a competent court of justice when the matter is presented by the bankrupt person or organization or by creditors. There are prescribed set of rules of law to deal with such situation which are attributed as Illinois bankruptcy law. Such existing and binding New York State law is called New York Bankruptcy Law. The similar set of rules that is prevalent and in the jurisdiction of the State of Texas is known as Texas Bankruptcy Law.

Bankruptcy law deals with the process that allows the Debtor to liquidate its obligations to creditors through the distribution of its movable and immovable assets. During this process, the designated court will allow the Debtor to continue his business and help him generate potential income to support the liquidation of creditors. The debtor shall be relieved by the court of his responsibilities when the total amount of his property is insufficient to completely settle his debt. The entire process of debt valuation, distribution and settlement will be supervised by the court, thus protecting debtors from the consequences they might otherwise face from creditors.

Illinois Bankruptcy Law outlines how the bankruptcy process and relevant issues should be handled when dealing with Illinois residents. Recent law requires a debtor who files for bankruptcy to submit to a thorough credit investigation at least 180 days prior to filing their case. During this time, the competent authority will evaluate the debtor’s income and expenses to determine the merits of his appeal. The average income of the previous six months is taken as a deciding factor on the amount of liability you can pay in the next 5 years. If with your average income for the next 5 years you can pay between USD 6,000 to 1,000 then you would qualify under chapter 13.

The Illinois Bankruptcy Court evaluates debtors’ property. The court has listed some exemptions on the properties to be seized. The debtor is required to submit a two-page petition along with many other documents to complete the process. The court fee is equal to $274 if filing under chapter 7 and $189 if filing under chapter 13. Shortly after the filing is complete, a stay order will be entered in favor of the debtor restricting creditors from making any type of direct transaction. contact or attempts with the debtor to recover his debt. A trustee would be appointed by the court who would, subject to decide and distribute the value of the debtor’s seized assets. Prior to this, a meeting of creditors with debtor will be convened, which in abbreviated terminology is called a 341 meeting. It takes approximately 3 months to complete the bankruptcy suite.