Filing for Chapter 7 or Chapter 13 bankruptcy in Illinois? The bankruptcy rules and procedures are established primarily by federal law, so the filing process in Illinois is similar to that in other states. You will, however, need to incorporate some information specific to Illinois in your bankruptcy documents. Additionally, the bankruptcy exemptions you are allowed to use are controlled by Illinois law.
Before filing your bankruptcy in Illinois, you’ll need to complete a credit counseling course, fill out your bankruptcy forms, and select the proper Illinois bankruptcy court.
(For more articles on the filing process, see Filing for Bankruptcy.)
Here’s what you should know if you are considering filing for bankruptcy in Illinois.
To qualify for a Chapter 7 or Chapter 13 bankruptcy, you must complete a credit counseling course from an approved agency within the six months before you file. Under most circumstances, there is a fee for the course, and you can choose to complete your counseling in person, over the telephone, or online.
You’ll also have to take a debtor education course after you file bankruptcy, but before you receive your discharge. (To learn more about this requirement, including the rare exceptions, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
Illinois has its own exemptions, which determine how much of your property is protected when you file Chapter 7 bankruptcy and play a role in how much you repay unsecured creditors in Chapter 13 bankruptcy. (To learn more, see our Bankruptcy Exemptions area.)
Illinois does not permit you to use the federal bankruptcy exemptions. In Illinois, you may only use the state exemption system. To learn about Illinois’ exemptions for your home and car, look to The Homestead Exemption in Illinois and The Motor Vehicle Exemption in Illinois. For a list of other common exemptions in Illinois, see Illinois Bankruptcy Exemptions.
Filing a consumer bankruptcy requires you to complete a bankruptcy petition and several schedules in which you must list all of your property, debts, income, and other information. You must also complete the “means test” (for Chapter 7) and a similar form for Chapter 13.
For more information about each of the official forms, including where to find them, see Completing the Bankruptcy Forms.
The means test requires that you input your average household income earned in the six months before the month in which you plan to file bankruptcy, in order to determine whether your income is above or below the median for a household of the same size in your state. If your household income is below the median, you stop there and are not required to fill out additional portions of the means test. Below-median debtors are eligible to file for Chapter 7 and, if filing under Chapter 13, can choose a three-year term to repay debt instead of five years.
If your income is above the median, you must provide more detailed information about your expenses and secured debt payments to determine whether you still qualify for Chapter 7 bankruptcy. Most Chapter 13 filers have to provide this information as well.
For information about each of these forms, see:
Here’s where you can locate the Illinois figures for these means test forms:
Illinois median income figures. The median income for a single-person household in Illinois is $45,545. The median income for a household of two is $57,964, $66,758 for a household of three, and more for larger families. These figures change periodically, so look here to find the most current figures for each household size.
Example. Devra’s annual income is $35,000. Her husband earns $30,000 a year, and they have one child. Devra and her husband will pass the shorter version of the means test without having to deduct their living expenses because their household income is below $66,758, so they qualify to file a Chapter 7 bankruptcy. Bear in mind that the courts will still look at their income and expense schedules to determine whether they have disposable income (income left over after paying reasonable living expenses) with which they can repay their creditors.
Illinois standard deduction figures. Forms 22A and 22C list categories of household expenses such as housing, utilities, and vehicle ownership. For some of those categories, such as childcare, you list the actual amount you spend. For others, you list a predetermined amount -- sometimes that figure is a national standard, other times the number varies by county or region.
You can find all of the Illinois county and region-specific figures you’ll need for Forms 22A and 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on “Bankruptcy Reform” and then “Means Testing Information.”
Example. Housing and utility expense standards vary by county. If you live in Carroll County, your mortgage or rent deduction is $809 for a three-person household. But if you live in Clark County, the deduction is $705. You can find housing expense standards for each Illinois county here.
Certain judicial districts and bankruptcy courts require that you complete additional “local forms.” To find out if you are required to complete these forms, contact the bankruptcy filing clerk. Some courts post these forms online on the court’s website. (Below you’ll find links to Illinois’ bankruptcy courts.)
There are three federal judicial districts in Illinois (see below for links). You can file in either:
You can use the Court Locator tool on the U.S. Trustee’s website to find bankruptcy court locations and websites. The three district bankruptcy courts in Illinois are: