Bankruptcy 101: How Bankruptcy Works
Debt Relief & Bankruptcy Attorneys in Illinois
The Bankruptcy Code is a set of federal laws providing a fresh financial
start to individuals and businesses who cannot pay their debts.
Bankruptcy allows you to
repay creditors over time without penalty. Bankruptcy also shields you from creditor actions and
preserves your hard-earned assets.
Sulaiman Law Group, LTD, represents honest debtors who have incurred debts
through business enterprise or financial investments, or through personal
misfortunes such as health problems, job loss or divorce. We do not judge
people for filing bankruptcy. In fact, we encourage clients to embrace
bankruptcy as an opportunity to break free from debt.
Why Bankruptcy Is an Option for You
Bankruptcy is legal. It is not a loophole. The law was designed for honest people and businesses
saddled by debts they cannot pay off.
Bankruptcy is common. More than 1 million bankruptcies are filed in the U.S. every year. Many
famous Americans, from Thomas Jefferson to Donald Trump, have filed for
bankruptcy, as well as such iconic companies as Ford Motor Co.
Bankruptcy is smart. Rather than selling off assets or cashing in your retirement, bankruptcy
allows you to take back your life while retaining the wealth you have
worked hard to acquire.
Bankruptcy is true relief. Bankruptcy invokes protection from creditors and reduces what you owe.
Outside of bankruptcy, lenders and creditors have no legal obligation
to forgive your debts or work with you.
The concept of periodic forgiveness of debts dates to biblical times,*
and a provision for bankruptcy was reserved in the U.S. Constitution.
The first bankruptcy laws were enacted in 1800 and have evolved over the
years into what the U.S. Supreme Court famously recognized as a fresh
start for "honest but unfortunate debtors."**
Who Qualifies for Bankruptcy?
You do not have to be flat broke, unemployed, or working for the minimum
wage to file for bankruptcy.
We represent many professionals, business owners, executives and other
people with substantial incomes and high net worth. The discharge rules and
property exemptions of bankruptcy are intended to help you alleviate debt while retaining
your house, your retirement savings and your other property.
Congress changed the bankruptcy laws in 2005 to institute an income threshold
(the means test). The cutoff for
Chapter 7 discharge of debts is the median income in each state. Some high earners
who exceed the Illinois median may still qualify through offsetting criteria.
Other high net worth clients find relief through Chapter 13 or Chapter 11.
Chapter 13 bankruptcy involves monthly payments to a trustee, who then
makes payments to your creditors. Most Chapter 13 filers pay only a fraction
of their total debt.
Chapter 13 is for people with mortgage arrears, disqualifying incomes or assets that
would be forfeited in a Chapter 7 bankruptcy.
Chapter 11 is a repayment plan for businesses and for certain high earners who have
too much debt to qualify for Chapter 13.
In Chapter 7, 11 or 13, you are protected by the automatic stay. Under
penalty of law, creditors cannot pursue collections or legal actions,
or continue to harass you about your debts.
Experienced Chicago Bankruptcy Lawyers
You probably have many questions, and we are happy to address your concerns
and explain the options for your particular situation.
Call our office or request a consultation online to learn more about your legal options
with our law firm. We look forward to helping you!
"At the end of every seven years you shall grant a release of debts.
And this is the form of the release: Every creditor who has lent anything
to his neighbor shall release it; he shall not require it of his neighbor
or his brother, because it is called the Lord's release."
** "(Bankruptcy) gives to the honest but unfortunate debtor ... a
new opportunity in life and a clear field for future effort, unhampered
by the pressure and discouragement of preexisting debt."
Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)