Personal Bankruptcy Will Eviction Amount Be Discharged?

[Vincent]

Jurisdiction

Illinois

Hey,

Looking to possible file Chapter 7 in the next couple months.

I live in IL.

I currently rent. So no house to worry about.

My main question is if I should keep the car I just bought about 4 months ago or let it go in the bankruptcy.

The car has balance of $14K and about 67 months left of payments.

It is a 2012 Hyundai Accent with 23K miles.

I looked up the Kelly Blue Book value for trade in just to get an idea what it is worth now according to them for a dealership trade-in and it said in excellent condition (Which its in) it would be worth around $8K.

So I am already down $6K in value. After 4 months.

I am paying a high interest rate of 23.5% based on my poor credit and low $500 down payment.

So would you suggest I include this in my Chapter 7 or would lenders even possible let me refinance after all the rest of my debt is discharged to a lower rate?

Do you think they would consider a refinance or a possible trade in given the fact they know I wouldn't be able to possible file again for another 8 years?

The payment is high for me but I need to be able to drive.

I just dont want to be stuck with a car that has already lost a lot of value in a short time frame with no possible refinance, if I could add it to the bankruptcy.

Thanks for any help.

Hello,

I owe a lot of money to a lot of source and will need to file chapter 7 soon.

I live in IL and have all the debts in the same state I am about to list.

I have been taken to court in the past for an eviction from an apartment and ended up owing 3K when it was all said and done.

I had 2 other apartment complex's I owed money after I left, but not evicted from.

About 1K to $1500 for another. (Skipped out on last month, cleaning charges ect.)

I know it will show up on my credit report after if its discharged or not.

My question do you believe the dollar amount will be discharged from these 3 apartment complexes.

My main concern in the one I was evicted from. If this debt will be discharged.

I have a place now, that I had to place a lot of money down to get into for all the reasons able, and dont intend on moving for at-least 2 to 3 years.

I have already tried to work with the complexes on a payment plan but I couldn't afford their terms.

Thanks for any advice!

 

[C-Note]

Hello,

I owe a lot of money to a lot of source and will need to file chapter 7 soon.

I live in IL and have all the debts in the same state I am about to list.

I have been taken to court in the past for an eviction from an apartment and ended up owing 3K when it was all said and done.

I had 2 other apartment complex's I owed money after I left, but not evicted from.

About 1K to $1500 for another. (Skipped out on last month, cleaning charges ect.)

I know it will show up on my credit report after if its discharged or not.

My question do you believe the dollar amount will be discharged from these 3 apartment complexes.

My main concern in the one I was evicted from. If this debt will be discharged.

I have a place now, that I had to place a lot of money down to get into for all the reasons able, and dont intend on moving for at-least 2 to 3 years.

I have already tried to work with the complexes on a payment plan but I couldn't afford their terms.

Thanks for any advice!

That is what Bankruptcy is all about, getting dischargable debts discharged. Your debts concerning eviction as well as the debts you owe to other landlords ARE dischargable if you list them in the filing.

 

[Michael Wechsler]

It is amazing that you even received the loan in the first place, being so close to declaring bankruptcy. Your case is not simple and you first need to decide if Chapter 7 bankruptcy is the right decision for you to make. It's not like all your debts are magically wiped away and you get to start off without feeling the impact.

Illinois State law determines exempt property under Chapter 7, including cars.

(735 ILCS 5/12-1001)
Sec. 12-1001. Personal property exempt. The following personal property, owned by the debtor, is exempt from judgment, attachment, or distress for rent:
(a) The necessary wearing apparel, bible, school books, and family pictures of the debtor and the debtor's dependents;
(b) The debtor's equity interest, not to exceed $4,000 in value, in any other property;
(c) The debtor's interest, not to exceed $2,400 in value, in any one motor vehicle;
(d) The debtor's equity interest, not to exceed $1,500 in value, in any implements, professional books, or tools of the trade of the debtor;
(e) Professionally prescribed health aids for the debtor or a dependent of the debtor;
(f) All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life insurance and endowment policies and annuity contracts payable to a wife or husband of the insured, or to a child, parent, or other person dependent upon the insured, or to a revocable or irrevocable trust which names the wife or husband of the insured or which names a child, parent, or other person dependent upon the insured as the primary beneficiary of the trust, whether the power to change the beneficiary is reserved to the insured or not and whether the insured or the insured's estate is a contingent beneficiary or not;
(g) The debtor's right to receive:
(1) a social security benefit, unemployment compensation, or public assistance benefit;
(2) a veteran's benefit;
(3) a disability, illness, or unemployment benefit; and
(4) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(h) The debtor's right to receive, or property that is traceable to:
(1) an award under a crime victim's reparation law;
(2) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor;
(3) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor or a dependent of the debtor;
(4) a payment, not to exceed $15,000 in value, on account of personal bodily injury of the debtor or an individual of whom the debtor was a dependent; and
(5) any restitution payments made to persons pursuant to the federal Civil Liberties Act of 1988 and the Aleutian and Pribilof Island Restitution Act, P.L. 100-383. For purposes of this subsection (h), a debtor's right to receive an award or payment shall be exempt for a maximum of 2 years after the debtor's right to receive the award or payment accrues; property traceable to an award or payment shall be exempt for a maximum of 5 years after the award or payment accrues; and an award or payment and property traceable to an award or payment shall be exempt only to the extent of the amount of the award or payment, without interest or appreciation from the date of the award or payment.
(i) The debtor's right to receive an award under Part 20 of Article II of this Code relating to crime victims' awards.
(j) Moneys held in an account invested in the Illinois College Savings Pool of which the debtor is a participant or donor, except the following non-exempt contributions:
(1) any contribution to such account by the debtor as participant or donor that is made with the actual intent to hinder, delay, or defraud any creditor of the debtor;
(2) any contributions to such account by the debtor as participant during the 365 day period prior to the date of filing of the debtor's petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution; or
(3) any contributions to such account by the debtor as participant during the period commencing 730 days prior to and ending 366 days prior to the date of filing of the debtor's petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution. For purposes of this subsection (j), "account" includes all accounts for a particular designated beneficiary, of which the debtor is a participant or donor.
Money due the debtor from the sale of any personal property that was exempt from judgment, attachment, or distress for rent at the time of the sale is exempt from attachment and garnishment to the same extent that the property would be exempt had the same not been sold by the debtor.
If a debtor owns property exempt under this Section and he or she purchased that property with the intent of converting nonexempt property into exempt property or in fraud of his or her creditors, that property shall not be exempt from judgment, attachment, or distress for rent. Property acquired within 6 months of the filing of the petition for bankruptcy shall be presumed to have been acquired in contemplation of bankruptcy.
The personal property exemptions set forth in this Section shall apply only to individuals and only to personal property that is used for personal rather than business purposes. The personal property exemptions set forth in this Section shall not apply to or be allowed against any money, salary, or wages due or to become due to the debtor that are required to be withheld in a wage deduction proceeding under Part 8 of this Article XII.

 

[Michael Wechsler]

So it the Illinois statute says you've got a $2,400 equity exemption. I have to wonder why you'd even buy a car (and an expensive automobile at that) if you had an inkling that you'd probably be filing for bankruptcy. It would seem that the equity amount in the car would qualify for an exemption but that doesn't mean you're free and clear. The lender still likely has a security interest in the car - a lien - and your inability to pay can result in repossession of the car. You would need to either find a way to pay for the car entirely up front (redemption of the car) or entering into another agreement (reaffirmation) which would be negotiated. It costs money for the lenders to repossess a vehicle so it's an option they may wish to pursue but you'd better have a good way of showing why it would be in their interests to do so. It will probably take a while for things to happen if you do choose to file Chapter 7 bankruptcy but you're better off prepared for what that may mean.

This said, I am not an Illinois licensed attorney and I don't know how much you owe or whether judgments have been entered and liens filed. You need to speak to a bankruptcy lawyer or specialist who can review all of your debts and whether it makes sense to file.