Commonly Asked Questions & Answers

• Can I still file bankruptcy under the new law?
• What are the differences between the old law and the current law?
• How do I know that I’m in financial trouble?
• What are the different types of bankruptcy available to me?
• What debts can’t be included in bankruptcy and Chapter 13?
• If I file for bankruptcy, will I lose anything?
• Can I get credit after filing for bankruptcy?
• What about getting a loan or going through a bill consolidation company?
• I’ve seen and heard about other attorneys – what makes Zalutsky & Pinski different?
• How will I pay for my bankruptcy?
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• Ask us a question about bankruptcy, and get a response from one of our attorneys

Can I still file bankruptcy under the new law?

Yes. You can still file bankruptcy under the current law. On October 17, 2005, a new bankruptcy law was passed which greatly changed the Bankruptcy Code. However, this law did not eliminate an individual’s right to file bankruptcy.

There are too many changes in the law to detail here, but for the vast majority of people, their right to file for Chapter 7 or Chapter 13 has not changed. The change in the law did result in an increase in the court costs; however, the real effect of the new law, for most people, has more to do with procedural matters.

Individuals now seeking to file for either type of bankruptcy have new requirements that must be fulfilled. More information is now needed before a case can be filed. It may be necessary to provide up to six months of pay check stubs, or related information, as well as up to four years of tax returns.

In addition to the information that now must be provided, debtor participation in certain activities is now required. For instance, individuals must go through credit counseling from an approved agency prior to a bankruptcy being filed. The debtor must also attend a financial management class before a bankruptcy can be discharged. Both of these items can be done in person, on-line, or over the phone at a minimal cost.

In addition to the requirements being placed on the consumer, our office has also been given increased responsibility. Attorneys like those at Zalutsky & Pinski, now must take an even more in-depth look into the financial situation of our clients. Thus, the amount of information we may request has increased.

One new requirement has to do with IRS standards and the state median income. In determining what chapter to file, an assessment must be made as to your household income in comparison to the rest of the state. Essentially, it is presumed that if you make below Illinois’ median income for a household of similar size, then a Chapter 7  filing is appropriate.

Likewise, if you make above the median income, a Chapter 13 is presumed to be appropriate. It is important to note that these IRS guidelines are just a starting point. Numerous other factors will still be looked at before determining what, if any, chapter is appropriate for you.

The above information just scratches the surface as to the changes created in the Bankruptcy Code. For more information on the changes mentioned above, or on any other changes, please do not hesitate to call our office and speak to one of knowledgeable attorneys.

How do I know that I’m in financial trouble?

If you have difficulty meeting rent or mortgage payments on time…if you’re extended beyond your credit limit… if you’re making only minimum monthly payments on your credit cards… if you’re using credit cards instead of cash… if you have little or no savings or have difficulty setting priorities, you’re likely to be in trouble.

What are the different types of bankruptcy available to me?

When you come in for a FREE CONSULTATION, the different types of bankruptcy will be explained to you in detail. But for now here is a brief description of each:

With Chapter 7, unsecured debts (credit cards, utility bills, medical bills, etc.) can, in most circumstances, be eliminated.

With Chapter 13, also called bill consolidation, bills are repaid over a period of time. The actual amount being repaid can vary, depending on your budget, among other things. This Chapter is extremely helpful if you are behind on a car or house payment and are afraid of losing them to repossession or foreclosure.

What debts can’t be included in bankruptcy and Chapter 13?

Most bills, with very few exceptions, can be included in a bankruptcy. Whether it is taxes, tickets, overpayment of benefits, car accident claims, or anything else, in all likelihood, if you let us know, we can successfully work out a solution for your debts. We can even help if you are a cosigner or are looking to protect someone who cosigned for you. The treatment of the various types of debt you owe will help to determine which chapter should be filed.

If I file for bankruptcy, will I lose anything?

No, we will file the correct proceeding in order to ensure you are protected. Increased exemptions for real and personal property make it even more likely that you will be able to hold on to your possessions, including houses, cars, and tax refunds.

Can I get credit after filing for bankruptcy?

You will be able to get credit. The actual amount and interest rate may vary, depending on other factors including length of time at your job or address, but credit is available. In a short period of time, many of our clients discover that they can qualify for a new car or a mortgage.

What about getting a loan or going through a bill consolidation company?

While it may be tempting to try and get a loan to take care of your bills, most of the time you would be treating the symptom instead of curing the disease. When you take out a loan to pay bills, you’re just changing to whom you owe money. The debt is still there and, depending on the loan, you could be paying more interest. In addition, getting a second mortgage or refinancing can unnecessarily reduce the amount of equity in your home.

With respect to the bill consolidation companies, what they don’t tell you is that your creditors are under no obligation to comply with the consolidation. Your creditors are still free to proceed with garnishments or wage assignments. Also, certain debts can’t even be consolidated. In addition, many people find that the monthly payments are just too steep and interest generally continues to accrue.

I’ve seen and heard about other attorneys – what makes Zalutsky & Pinski different?

The fact that we have been around for 50 years is a testament to our success with helping our clients. It’s quite possible that if you were to ask your coworkers, friends, or family members, one of them would have used our services or at least knows someone who has. We do not believe that there is one answer for all situations. That is why an attorney, not a paralegal or other person, will review your personal situation at a FREE CONSULTATION to determine what is best for you.

If a Chapter 13 is what you need, we will go through your budget carefully and try to create the most comfortable monthly payment for you, while ensuring that you and your possessions are protected. Our fee can be rolled in with the rest of your debts so that only one payment a month is needed.

If it turns out that a Chapter 7 is more appropriate, Zalutsky & Pinski will help you there too. As opposed to most firms that require all their fees up front, we set payment plans that are designed to meet your needs. In most instances, your case will be filed long before our fees have been paid. Our plans are based on your ability to pay.

For further information, call our toll free number to set up an appointment for a FREE CONSULTATION. Call today! What do you have to lose?

How will I pay for my bankruptcy?

We understand that if you had a lot of money you wouldn’t need to see an attorney. In most instances, we can file your case with little or NO MONEY DOWN. With both Chapter 7 and Chapter 13, we will create a payment arrangement with which you are comfortable. You do not need to pay all your fees up front.

By Kerrie Neal