Frequently Asked Questions

for chapter 7 bankruptcy filings

If you have any other questions please call our office.

What is a bankruptcy?

Bankruptcy permits a person to discharge certain debts by filing a case in the bankruptcy court.


What is a bankruptcy discharge?

It is a court order releasing a debtor from all of his or her dischargable debts and ordering creditors not to attempt to collect from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay.


Under what conditions should a husband and wife both file?

Both husband and wife should file if some of the debts to be discharged are owned by both spouses. If only one spouse files for bankruptcy relief, the other may still be responsible for their debt.


Will filing a bankruptcy affect a person's credit rating?

Typically, your credit score will actually increase upon discharge, because you no longer have debts, only assets and income. Additionally, you will likely be eligible for a signature loan after 6 months, an auto loan after 12 months of discharge, and a home loan 24 months after discharge.


Are employers notified of a person's bankruptcy case filing?

Employers are not notified when a bankruptcy case is filed.


May employers or government agencies discriminate against persons who file a bankruptcy?

It is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed under a bankruptcy proceeding.


How does filing a bankruptcy affect lawsuits and attachments that have already been filed against the debtor?

The filing of a bankruptcy case automatically stays or stops most lawsuits and attachments that have been filed against the debtor. A few days after the case is filed the Court will mail a notice to all creditors ordering them to refrain from any further action against the debtor. The most common action not affected by the filing of the bankruptcy are criminal proceedings and actions for the collection of debts for alimony, maintenance, or support from exempt property or from property of funds acquired or earned by the debtor after the case was filed.


Will bankruptcy stop a wage garnishment?

Yes, filing bankruptcy stops the collection of monies through wage non-court ordered garnishments.


Will my student loans be discharged through bankruptcy?

In most cases, student loans are NOT dischargeable.


May a utility company refuse to provide service to a debtor if its' bills for utility service are not paid?

If, within twenty days of filing, the debtor furnishes a utility company with a deposit or other security to insure the payment of future services, it is illegal for the utility company to refuse to provide future utility service to the debtor, or to otherwise discriminate against the debtor, even if the bill for past utility services is discharged.


How does a debtor know if their discharge has been granted?

Usually by mail. Most courts send a form called "Discharge of Debtor" to the debtor and to all creditors.


What should a person do if a creditor later attempts to collect a debt that was discharged in their bankruptcy?

When a discharge is granted, the Court enters an order prohibiting the creditors from later attempting to collect from the debtor any debt that was discharged in the bankruptcy case. If a creditor violates this court order, they may be held in contempt of court and fined; and they may be liable to the debtor for damages.

Ostling & Associates, LTD 
Illinois' Largest Bankruptcy-Only Law Firm