Such status shall be assessed and declared by a competent court of law where the issue is lodged either by the bankrupting individual or organization or the creditors. There are prescribed set of rules of law to deal with such situation which are attributed as Illinois bankruptcy law. Such law existing in the state of New York and binding are called New York Bankruptcy Law. The similar set of rules prevailing and in the jurisdiction of Texas State is known as Texas Bankruptcy Law.
Bankruptcy law deals with the process that allows the Debtor to settle off his liabilities to creditors by distribution of his movable and immovable properties. During this process, the nominated court will allow the Debtor to continue carrying his business and help him generate possible revenue to support the settlement of creditors. The debtor will be relieved by the court from his liabilities when his total properties fall short to fully settle his dues. The complete process of valuation, distribution and settlement of dues will be supervised by the court, thereby protecting the debtors from dare consequences he might face from creditors otherwise.
Illinois Bankruptcy Law describes how the bankruptcy process and relevant issues should be handled when it comes to residents of Illinois. The recent act requires the debtor filing for bankruptcy to undergo a thorough credit investigation, at least 180 days prior to his case filing. During this time the concerned authority, evaluate debtor's income and expenses to find out merits of his appeal. The average income for the preceding six months is taken as a deciding factor on how much of liability he can repay in the following 5 years. If with his average income for next 5 years he can pay between USD.6000 to 1000 then he would quality under chapter 13.
Illinois Bankruptcy Court assesses the properties of the debtors. The court has listed some exemptions on the properties to attach. The debtor requires filing a twin page petition along with many other documents to complete the process. The court fee works out to USD.274, if filed under chapter 7 and USD.189 if filed under chapter 13. Soon after filing is done, a stay order will be issued in favor of debtor restraining the creditors to make any sort of direct contact or attempts with debtor to recover their dues. A trustee would be nominated by the court who will, without prejudice decides and distribute the value of the debtor have attached properties. Prior to this, a meeting of creditors will be called with debtor which in court terminology is called as 341 meeting. It takes roughly 3 months time to complete the bankruptcy suite.
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Bankruptcy is an unfortunate situation and can happen even to seasoned businessman or to a new entrepreneur. Go ahead for valuable reads about Illinois Bankruptcy Law , its types and how to use it when required.