Chicago Bankruptcy in Divorce Attorneys
Bankruptcy in an Illinois Divorce
Financial difficulties can take a heavy toll on a marriage. In some cases, the strain becomes too much for the spouses to bear, leading to an unsecure financial future and a bitter relationship. If you are facing the joint challenges of bankruptcy and divorce in Chicago, you are likely feeling completely lost. Both divorce and bankruptcy require a great deal of emotional energy, on top of legal and financial know-how. Each can on their own leave your life in tatters, and both together can make a difficult situation seem even worse.
That is why Nottage and Ward, LLP is so dedicated to helping our clients fight for what is rightfully theirs. While we cannot completely fix an immensely difficult situation, we can at least provide you with guidance and support. Our Chicago divorce lawyers have experience dealing with bankruptcy law and can help you untangle the complex issues involved in filing for bankruptcy during a divorce. Divorce changes the bankruptcy playing field. You need the assistance of an attorney who won't back down and understands both divorce and bankruptcy issues. For strong family law assistance, call our firm at (312) 332-2915. We are ready to help.
What Are the Impacts of Bankruptcy?
To those of us who haven’t been through bankruptcy, it can be difficult to conceptualize what exactly the term means. Essentially, bankruptcy is a process that allows people who are unable to pay back their debts to seek legal and financial relief from said debt. What the process actually looks like depends on the type of bankruptcy you are filing for, as different types have different end goals. However, beyond that, there are certain assets that are and are not exempt when you file for bankruptcy. Knowing what is and isn’t exempt can help you determine what your life will look like after you file and how heavy of an impact bankruptcy will have.
Common assets that are exempt in a bankruptcy include:
- Home: Up to $15,000 in equity of your home is exempt
- Vehicle: Up to $2,400 is exempt per vehicle
- Spousal maintenance: The amount reasonably needed is exempt
- Unemployment compensation: This is 100% exempt excluding what is needed for child support
- Wage: Just 85% of your wages will be exempt
There are countless other categories that will be impacted in some shape or form, such as your insurance benefits, business assets, retirement benefits, and money you may have received from a negligence claim or workers’ compensation. However, the impact you feel will depend on which kind of bankruptcy you file for. When it comes to bankruptcy and divorce cases, the two kinds of bankruptcy you may consider are Chapter 7 and Chapter 13.
Chapter 7 vs. Chapter 13
These two kinds of bankruptcy are both viable options when it comes to dealing with financial hardship on top of a divorce. Both have their benefits and drawbacks, and determining which option is best for your case will require a Chicago family law attorney to help guide you through the process.
In Chapter 7 bankruptcy, a bankruptcy trustee will look at your assets and sell all property that is not already exempt, such as your house, any vehicles, and the land you live on. The sale of this property will be used to pay back your debts. Overall, the process may only take a few months, depending on the assets you own. However, this option may not be viable for you if you do not own enough property to pay off your debts. For example, if you do not have land, a house, a car, or any other expensive pieces of personal property, then Chapter 7 bankruptcy may simply not work for paying off your debt.
On the other hand, you can file for Chapter 13 bankruptcy. With Chapter 13, you keep all your property, but you are required to pay the value of non-exempt property to unsecured creditors. While Chapter 13 means you don’t have to lose any of your hard-earned property, the process can take much longer than Chapter 7. Chapter 13 bankruptcy averages about 3-5 years to complete, which is quite a large portion of your life. If that seems too long for you, then Chapter 7 may be the better option for your needs.
How Does Bankruptcy Affect Divorce Arrangements in Chicago?
If you have recently faced a divorce and are now experiencing bankruptcy, or vice versa, you may be wondering if you can write off some of the money you may owe to your former spouse as part of the debt you are seeking to relieve. In Illinois, bankruptcy does not end your responsibility to pay for:
- Child support
- Spousal maintenance
- Property settlements
Illinois parents have an obligation to support their children even while they go through bankruptcy. In fact, in some cases, one spouse has a right to the proceeds from property even if the other files for bankruptcy. Knowing your rights after a divorce when you or your former spouse file for bankruptcy is crucial to protecting your interests and emerging from both proceedings successfully.
Even after a divorce is final, you may still be obligated to inform your former spouse if you later file for bankruptcy. In 2005, federal bankruptcy law was amended to require people filing for Chapter 7 bankruptcy to tell a former spouse about the bankruptcy if the former spouse is receiving maintenance or child support payments. The notification allows the former spouse to protect his or her rights to domestic support. Choosing an attorney versed in Illinois divorce law and bankruptcy law can help protect your rights and interests if a bankruptcy is in your future.
Chicago Divorce Lawyers Protecting Your Financial Future
In part, divorce is a business proceeding. It involves the splitting of assets that used to belong to a partnership. Bankruptcy, too, is a business issue. It allows you to preserve vital assets while starting anew financially in some ways. Since divorce and bankruptcy can be emotionally harrowing events, the experience, compassion, and objective viewpoint of a skilled divorce lawyer can help you keep track of the financial and legal elements of your situation, helping you to navigate both in an equitable manner.
The Chicago lawyers at Nottage and Ward, LLP focus on the financial and legal tangle that is divorce. For more than thirty years, we have helped couples navigate both divorce and bankruptcy issues. We know how to address our clients' needs and ensure they receive the assets they need to settle and complete the complex and confusing processes of divorce and bankruptcy in Cook County.
Contact Nottage and Ward, LLP at (312) 332-2915 to set up a consultation to determine if our experience meets your needs.
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Client Reviews
5 Leslie has been the strongest representation I could ask for
Leslie has been the strongest representation I could ask for in a very complicated, emotional matter. She has continuously looked out for my best interest and the best interest of my son. She is always prompt in getting back to me and in keeping me well informed about my case.
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