Filing bankruptcy accomplishes several goals. First, filing bankruptcy gives an individual relief from debts that he or she cannot pay. When you are struggling to pay your basic living expenses, the thought of paying credit card bills, medical expenses, and other debts can be overwhelming. Unfortunately, a financial crisis such as losing your job or becoming seriously ill does not relieve your legal responsibility to pay those debts. Filing bankruptcy discharges those debts and gives you a clean slate as you begin to rebuild your finances.
The second goal that a bankruptcy filing accomplishes is protecting assets. In addition to worrying about paying bills, protecting assets is a prime concern for people who are struggling with financial problems. The thought of losing your home, vehicles, retirement accounts, and personal property because you cannot pay your debts is frightening. You can protect your assets and find relief from debt by filing bankruptcy.
Protecting Assets with Bankruptcy Exemptions
You can protect the equity in your assets by using Illinois bankruptcy exemptions. By law, creditors are not permitted to take exempt property to satisfy debts. When you file a bankruptcy case, you claim the available bankruptcy exemptions for the purpose of protecting assets from creditors. In a Chapter 7 bankruptcy case, the trustee does not liquidate exempt assets to pay creditors. Therefore, your unsecured debts are discharged while your assets are protected.
For example, protecting assets such as retirement accounts is very important as no one will be able to work forever nor do they want to work forever. Unfortunately, many people withdraw funds from their retirement accounts to pay bills when they do not have sufficient income to cover their living expenses and debts. A better strategy for dealing with this problem may be filing a bankruptcy case to get rid of the debts while preserving your retirement funds. Bankruptcy exemptions protect retirement funds from creditors. Before using retirement funds to pay debts, you should discuss your financial situation with a qualified bankruptcy attorney.
Another example of protecting assets with bankruptcy is preventing unsecured creditors from attaching liens to your home. If you do not pay unsecured debts such as credit cards, medical bills, and personal loans, a creditor can file a lawsuit to collect the debt. If the court grants a judgment for the creditor, the judgment attaches to your home. Instead of risking the equity in your home, which can be protected in bankruptcy, you can eliminate your unsecured debts by filing a bankruptcy.
Protecting Assets for Future Generations
Some senior citizens on fixed incomes may have difficulty paying for necessary medical expenses and living expenses. When emergencies happen, some seniors turn to credit cards or personal loans to make ends meet. Unfortunately, there are creditors who take advantage of senior citizens who are in a desperate situation. High interest rates and large monthly payments make it almost impossible to pay off these debts without using the equity in assets.
Before using the equity in your home or other assets to pay debts, consult with one of our bankruptcy lawyers. A bankruptcy will eliminate these unsecured debts while protecting assets for you and your family.
Contact Our Office for a Consultation with an Experienced Illinois Bankruptcy Attorney
The bankruptcy lawyers of Pioletti & Pioletti assist clients throughout McLean, Woodford, Tazewell, and Peoria counties by providing compassionate, competent legal services. Contact our office at 309-938-4838 to schedule your free bankruptcy consultation. Our attorneys explain your potential options for resolving debt problems so that you can make an informed decision.
When you need the assistance of an experienced bankruptcy attorney in central Illinois, call Pioletti & Pioletti. We are dedicated to providing our clients with exceptional service and support throughout the bankruptcy process.
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