Hire A Chicago Bankruptcy Attorney to Exempt Tax Refund While Filing Bankruptcy

You may be searching for different ways to increase the size of your tax refund. So, can a Bankruptcy attorney in Chicago help you?

The day you file bankruptcy, all of your assets become part of the Bankruptcy estate including your tax refund even if you have not filed your return yet. In Chapter 7 cases, a trustee is appointed to analyze your assets and liquidate those assets to pay back your creditors. Unfortunately, a trustee will be mindful of a large tax refund during the liquidation process.

Is it possible to keep a tax refund and still file bankruptcy?

The bankruptcy process is rarely a pleasurable experience. Stressful financial situations and confusing rules of process can make it hard to proceed further without the help of a Bankruptcy attorney in Chicago. If your financial situation has deteriorated and you are considering bankruptcy, you should consider consulting with an attorney to get an insight into the issues that affect you. While bankruptcy is federal law, your ability to exempt your assets differs from state to state and only by learning what your state provides can you protect your tax refund.

Here are some useful tips that you should be award of if you’re considering filing bankruptcy-

•  A refund is treated as an asset just like cash in your bank account. Don’t forget to include it in your schedule of assets even if you haven’t filed the tax return yet. Listing a tax refund helps you because you can use your exemptions to protect all or a portion of the refund. 

•  To maximize the dollars that stay with you, and not your creditors, you should wait to file for bankruptcy until sometime after you have received your tax refund. To find out how long you should wait before filing, please consult a bankruptcy lawyer.

•  Never spend the refund on purchasing new assets that may become subject to the bankruptcy estate. You can pay necessary expenses, but acquiring assets, like property, is not suggested.  You should also never use your tax refund to pay any creditors, including relatives, other than a mortgage or car payment. 

Understanding how you can protect your tax refund is important in determining when to file and what to do with the refund. Keep a record of how the refund was spent. Most important, do not rely on this article for legal advice as every person’s situation is different. If you are considering bankruptcy as an option, seek the help of a Bankruptcy Attorney in Chicago.

Should I Hire a Bankruptcy Lawyer in Chicago?

Are you burdened with excessive debt from medical bills, credit cards, or other creditors? Many people in this situation have never considered bankruptcy but see no way of ever having enough resources to satisfy their financial obligations. Filing for bankruptcy is never an easy decision to make.  However, millions of people have filed for personal bankruptcy to regain control of their lives and financial situation.

Individuals and businesses facing lawsuits, liens, a wage garnishment, or a steady stream of harassing creditors should think about whether hiring a bankruptcy lawyer in Chicago would help. Bankruptcy allows a person with excessive financial obligations to a fresh start by eliminating the debt or extending the time required to pay it back.

There are a variety of bankruptcy types, each one detailed in the United States Bankruptcy code as a chapter. For example, a debtor may file Chapter 7, Chapter 11 or Chapter 13 bankruptcy. In chapter 7, most debts are forgiven without repayment at the risk of liquidation, whereas in a Chapter 11 or Chapter 13, the debts are restructured allowing the debtor to make monthly payments without incurring the penalties otherwise imposed by the creditors.

New Bankruptcy Law may affect Consumer Filing

The Bankruptcy Code was amended in 2005, making it more complicated for debtors to file. Known as the Bankruptcy Abuse Prevention & Consumer Protection Act, it requires most consumer debtors to qualify for Chapter 7 based on the “means test.” In other words, not every debtor is eligible to file under the chapter of his or her choosing. For some individuals, a Chapter 7 filing—liquidation—is not an option; they will be required to repay their debts through a Chapter 13 plan.

An individual or business considering bankruptcy should consult with a bankruptcy lawyer in Chicago to learn what their options are and to maximize the benefits of the Bankruptcy Code.

A bankruptcy lawyer in Chicago can explain the differences between the various bankruptcy chapters and ensure that the process goes as smoothly as the system allows. If you’re considering bankruptcy and seeking help, we can help. Our experienced bankruptcy lawyers are available when your schedule allows. We are conveniently located in the Chicago Loop, with offices in Waukegan and Skokie as well. Give us a call, we would be happy to review your situation and advise you on the best possible Bankruptcy option.

How a Bankruptcy Attorney in Chicago Can Help

Debt ridden consumers, cash-strapped businesses, and uninsured hospital patients may all find themselves asking whether consulting with a bankruptcy attorney in Chicago can help their financial future. To address these questions, you should understand the bankruptcy options available and to which situations they are best suited. A bankruptcy attorney in Chicago can help explain the various bankruptcy options to you. A Chicago bankruptcy attorney can also help you prepare and file the necessary court documents for each specific type of bankruptcy. 

When a Chapter 7 bankruptcy is filed, all of a person’s debts are forgiven, unless the debt is reaffirmed, and their assets are liquidated in order to repay creditors a portion of what they are owed. Certain property is protected from liquidation up to a certain amount depending on the type of asset. Since Chapter 7 bankruptcy is not available for everyone because there are income and debt limitations, a bankruptcy attorney in Chicago will consult with you to determine whether you are eligible for Chapter 7 bankruptcy. If you are eligible for Chapter 7 bankruptcy, a Chicago bankruptcy attorney will help you to determine whether it is in the best interests of your financial future to undergo liquidation to rid yourself of your debts.

When a Chapter 13 bankruptcy is filed, a debtor enters into a repayment plan with the court’s approval. Those unsecured debts that remain at the end of the repayment period are forgiven. A person must meet certain income and asset limitations in order to be eligible for a Chapter 13 bankruptcy. A bankruptcy attorney in Chicago can analyze your financial situation in order to determine whether you meet the eligible requirements and whether a Chapter 13 bankruptcy is in your best interests. If you own your home and wish to keep your mortgage and avoid foreclosure, Chapter 13 may be the best option for you. A Chicago bankruptcy attorney will help you to complete and file the detailed court documents that must be submitted with a Chapter 13 bankruptcy and appear in court on your behalf as necessary.

If a person does not meet the income and asset limitations of Chapter 13 bankruptcy but wishes to avoid asset liquidation, a Chapter 11 bankruptcy may be the best option. Like a Chapter 13 bankruptcy, a repayment plan must be approved by the court when a Chapter 11 bankruptcy is filed.  The debtor can avoid asset liquidation but he or she will be required to use all disposable income during the repayment period to repay debts. Any remaining unsecured debt will be discharged. A Chicago bankruptcy attorney can explain the repayment plan process to you. A bankruptcy attorney in Chicago can also help you file the necessary documents with the court and appear on your behalf at any court proceedings. 

Understanding Bankruptcy in Chicago

A Chicago bankruptcy lawyer can explain to you the different bankruptcy options to help you resolve your debt issues – including Chapter 7, Chapter 13 and Chapter 11 bankruptcy. Each bankruptcy alternative has various advantages and disadvantages and it is important to understand how each specific type of bankruptcy will affect your financial future. A bankruptcy lawyer in Chicago can explain the different options to you. A Chicago bankruptcy lawyer can also help complete and file the necessary court documents.

Under a Chapter 7 bankruptcy liquidation, a debtor’s assets are liquidated in order to pay creditors a portion of what they are owed. In exchange, all debts, including secured debts, are forgiven unless the debt is reaffirmed.  Debtors are allowed to exempt certain assets from liquidation up to a certain amount depending on the type of the asset. Chicago bankruptcy lawyers are experienced assessing the financial situation of individuals to determine whether they interests will best be served by a Chapter 7 liquidation. 
 
Those persons that have filed a Chapter 7 bankruptcy in the past 8 years or a Chapter 13 bankruptcy in the past 6 years are not eligible to file a Chapter 7 bankruptcy. Similarly, individuals who have the ability to repay a portion of their debts are not eligible for Chapter 7 bankruptcy and, instead, must file a Chapter 13 or Chapter 11 bankruptcy. A Chicago bankruptcy lawyer can help you analyze your debts and income to determine whether you are eligible for Chapter 7 bankruptcy.

A Chapter 13 bankruptcy is available for those persons who meet certain income and debt limitations and have not have filed a previous chapter 7 within 4 years or a previous chapter 13 within 2 years. Under a Chapter 13 bankruptcy filing, the debtor repays some or all of the unsecured debts pursuant to a repayment plan and any unsecured debts balances that remain at the end of the repayment plan period are discharged. A Chicago bankruptcy lawyer will assess your income, unsecured and secured debt to determine whether Chapter 13 is the best option for you to resolve your debts and keep your assets.

A Chapter 11 bankruptcy is similar to a Chapter 13 bankruptcy except that there are no debt limitations as with a Chapter 13 bankruptcy. A Chapter 11 bankruptcy may be the best option for "high net worth" individuals who exceed the Chapter 13 debt limitations but do not wish to have their assets liquidated. Debts are repaid over a period of five years, though not necessarily paid in full.

Regardless of the type of bankruptcy filed, debtors are protected from creditor contact and harassment by the automatic stay once a bankruptcy petition is filed. A Chicago bankruptcy lawyer can help ensure that your rights are protected and that creditors stop harassing you once you have filed for bankruptcy protection.

If you are facing mounting debts, foreclosure and other financial difficulties, contact a Chicago bankruptcy lawyer. Our skilled Chicago bankruptcy lawyers will analyze your debt, income and assets in order to determine which bankruptcy options is the best option for your financial future. The Chicago bankruptcy lawyers will help you prepare and file the necessary court documents with your bankruptcy.