First Steps of Filing Bankruptcy in Illinois

Credit Counseling

• The first step you need to take when planning on filing for bankruptcy is to collect your pay stubs and documentation of other sources of income. You need this information to take the means test later on in the process. To take the means test, you need to accurately account for the income you have taken in prior to filing your bankruptcy petition. You must also seek credit counseling within the 180 days prior to filing your bankruptcy petition in the Illinois bankruptcy court. Bankruptcy law requires that you attend a mandatory credit counseling session with a credit counselor approved by the United States Trustee Program.
  
  

Family Income

• Once you have collected six consecutive months of pay stubs, you are ready to take the means test. Compare your family income to the median family income for a family of the same size in Illinois. Calculate your family income by adding the total six months of income together, and then multiplying that number by two. At the time of publication, the Census Bureau listed Illinois’ median family incomes as follows: $46,355 for a single earner; $60,073 for a family of two; $69,910 for a family of three; and $81,097 for a family of four.
  
  

Chapter 13

• Figure out whether your family income is more or less than the median family income in Illinois. If you plan on filing for Chapter 13 bankruptcy, the means test ends here. If your family income falls below the median family income for Illinois, you will need to propose a three-year debt repayment plan. If your family income hovers above the median family income for Illinois, you will need to propose a five-year debt repayment plan.
  
  

Chapter 7

• If you plan on filing for Chapter 7 bankruptcy, you can file if your family income falls below Illinois’ median family income. If your family income hovers above that mark, calculate your disposable income to determine if you can file for Chapter 7. Take your family income, and divide this number by 12. This gives you your current monthly income. Subtract all allowable monthly deductions from your current monthly income. Multiply the result by 60. If the result is more than $10,000, you cannot file for Chapter 7 bankruptcy. Once you have figured out which chapter of bankruptcy you will file, complete the remainder of your bankruptcy petition. File the petition with the Illinois bankruptcy court serving your district, and pay the filing fee. Afterward, the bankruptcy court will contact you with further instructions.