Illinois Bankruptcy Records

Are Bankruptcy Records Public Information in Illinois?

Bankruptcy records are legally considered public information. As per 5 ILCS 140, or the Illinois Freedom of Information Act, all records maintained by public agencies must be made available to members of the public upon request. However, if the court seals or expunges a bankruptcy case, individuals may have restricted or zero access. Parties can obtain bankruptcy records and information in a number of ways by phone, online, or in-person. Individuals can also access certified copies of bankruptcy records through the court clerk in the court where the case was filed and closed.

Record seekers looking for an alternative to government sources may obtain bankruptcy records from third-party websites. These non-governmental websites often come with tools that help simplify the search for single or multiple records. However, record availability on third-party sites tends to vary because they’re independent of government sources. To obtain bankruptcy case information using third-party sites, record seekers may need to provide:

• A complete name of the debtor involved in the record
• A bankruptcy case number

Bankruptcy in Illinois

Bankruptcy in Illinois is an authorized legal procedure that involves a corporation or individual who cannot repay outstanding debts. The procedure provides relief from financial distress by helping the debtor propose repayment plans, in compliance with the U.S. Bankruptcy Code and Federal Rules of Bankruptcy Procedure. Bankruptcy cases in Illinois take place in federal courts. Interested persons can start the process by filing a petition at any of the U.S. Bankruptcy Courts located in the state, especially one with jurisdiction in the business location, debtor’s residential area, or where the debtor has a principal asset.

What Do Illinois Bankruptcy Records Contain?

Bankruptcy records typically include all documents, photographs, recordings, transcripts, processing records, and statements made or generated throughout the bankruptcy case process. Specifically, a bankruptcy record will include:

• Original bankruptcy filing
• Discharge orders
• Dismissal orders
• Voluntary or involuntary petitions
• The final judgment, if applicable.

Illinois Bankruptcy Process

The Illinois judiciary does not maintain Illinois bankruptcy records. Instead, federal courts have jurisdiction over bankruptcy cases. Illinois is home to three federal Bankruptcy Courts:

• The Northern District Bankruptcy Court with locations in Springfield, Peoria, and Urbana:
• The Southern District Bankruptcy Court with locations in East St. Louis and Benton:
• The Central District Bankruptcy Court with locations in Chicago, Rockford, Joliet, Lake County, and Kane County.

Bankruptcy courts exist to assist individuals and businesses who are in debt to pay back creditors. Bankruptcy law allows parties to file for bankruptcy to prevent further debt collection or other penalties while reorganizing, creating payment plans, or working to liquidate assets. Different kinds of bankruptcy are available for parties to claim depending on their unique financial situation and what would aid the best. Court clerks are tasked with taking court documents and compiling them into a file, referred to as the case file. Bankruptcy records are managed federally by the Bankruptcy Courts through the Case Management/Electronic Case Filing System (NextGen CM/ECF). This way, records are electronic, enabling filings and requests to be made online. Parties could access all bankruptcy records unless the court sealed the documents using the PACER tool or other third-party sites.

How to Get Illinois Bankruptcy Records

To obtain complete records, parties can search by the court or a general search that encompasses all federal courts. To find details to help narrow the search, parties can use the Case Management/Electronic Case Filing System (NextGen CM/ECF). It is also possible to request PACER records by mail. PACER charges $0.10 per page and has a limit of 30 pages total. Through the court clerk, search fees are $32.00, and the certification fee is $11.00.

PACER also provides a National Case Locator to find details regarding a case such as a case number, name of the subject, or the subject’s social security number. The case locator is typically used to determine if an individual or entity is involved in legal matters. PACER also offers a Court Opinions search, where individuals can learn about the outcome of a case.

If a requested case file is not located in NextGen or the courts, the National Archives and Record Administration (NARA) has likely been tasked with maintaining them. NARA is a collection of all archived federal court case records, including bankruptcy records that are old. Requesting records through NARA gives parties the option to obtain:

• The party’s entire case file: Including all documents pertaining to personal and professional life. This option gives a maximum of 150 pages for $90.00, and $22.00 for every 15 minutes the clerk searches for the records.
• Specific and preselected documents: Including the order of dismissal, original petition, a summary of debts, and a summary of assets. The fee for preselected documents is $35.00.
• Docket sheet: All documents filed during bankruptcy proceedings serving as a case outline. This request costs $35.00.

Parties can also request archived records through the NARA website. The cost is $15.00 for certification.

Where to Conduct a Free Bankruptcy Case Search in Illinois

Citizens can visit any United States bankruptcy court location in Illinois to conduct a free bankruptcy case search. These federal courts maintain bankruptcy case files and provide public access terminals where interested persons can perform bankruptcy case searches at no cost.

On the other hand, people who prefer an online alternative may access the Public Access to Court Electronic Records (PACER) system. Although it costs $0.10 per search, the fee is waived if one spends less than $30 in any quarter to access case files.

Finally, one can call the courts' Multi-Court Voice Case System at (866) 222-8029 to obtain summary bankruptcy case information for free using a debtor's name, social security or tax identification number, or case number.

How Do I Find Out if My Bankruptcy Case is Closed in Illinois?

In Illinois, the court will close a bankruptcy case when the debtor has taken all actions possible to repay debts. To quickly find out if a case has been closed, parties can use the PACER telephone number free of charge at (866) 222-8029. The following information is necessary to get phone access to court records:

• Case number
• Participant name
• Social security number

It is also possible to quickly find this information by contacting the district court clerk where the claim was filed. Parties can use the websites of the Northern District Bankruptcy Court, the Southern District Bankruptcy Court, and the Central District Bankruptcy Court to determine where the office and court locations are.

Can a Bankruptcy Be Expunged in Illinois?

Depending on the type, bankruptcy claims and filings will remain on a party’s record for several years. Chapter 7 bankruptcy stays on record for ten years, while Chapter 4 stays on record for seven years. Illinois state laws dictate that the court may grant expungement and sealing of records if petitioned, but bankruptcy records do not qualify.

What is the Downside of Filing for Bankruptcy in Illinois?

Debtors often suffer damages on their credit score as a consequence of a bankruptcy filing. This may further lead to higher interest rates and may negatively impact the debtor's ability to get loans, credit cards, tax refunds, or mortgages. Depending on the type of bankruptcy entered, bankruptcy shall be reflected on the credit report for about 7 to 10 years.

However, the effect varies according to the initial credit score. High credit scores can fall by 200-240 points, while average scores can fall by 130-150 points. Nevertheless, it is possible to recover from this effect with good credit behavior. On the other hand, persons with low credit scores between 400 and 500 may witness an increase of up to 50 points.

Additionally, individuals who file for Chapter 7 bankruptcy will lose assets due to liquidation. This may include real estate, vehicles, investments, and valuable collections. However, primary residence and other exempt properties are not subject to this. Individuals should also note that not all debts are dischargeable. For instance, student loans, child support, alimony, and other fines are exempt. Other possible consequences of bankruptcy include job restrictions, frozen bank accounts, and housing stigma.

What is Chapter 11 Bankruptcy in Illinois?

Commonly referred to as a reorganization plan, Chapter 11 bankruptcy in Illinois is an option used by debtors with huge debts, which involves reorganizing debts and assets. Usually, this form of bankruptcy is filed by businesses who wish to continue operations and protect assets, but it is also available to individuals whose assets and debts exceed the limits for other types of bankruptcy. For instance, as of April 1, 2019, individuals with secured debts exceeding $1,257,850 or unsecured debt over $419,275 cannot file Chapter 13 bankruptcy (debt limit review scheduled for April 1, 2022).

Generally, Chapter 11 bankruptcy can be done voluntarily by the debtor or involuntarily by creditors. However, the following may be restricted:

• An individual with a dismissed bankruptcy petition may not file until after 180 days.
• Stock and commodity brokers
• Persons who did not receive credit counseling within 180 days before filing

Once the court files the bankruptcy petition, there will be an immediate ban or freeze in all debt collection activities in compliance with the Automatic Stay Provision (Section 362 of the Bankruptcy Code), and creditors will lose their individual collection rights. This means two things; that all collection activities like foreclosures, evictions, and judgment against the debtor are halted to give the debtor more space to restructure; and that the debtor no longer settles debts separately but collectively with the bankruptcy estate, which operates for the benefit of all creditors. Note that the automatic stay does not stop the following actions:

• The commencement or continuation of a criminal proceeding against the debtor
• The commencement or continuation of a civil action against the debtor, especially concerning divorce, child custody, domestic support obligations, and establishment of paternity
• Government tax audits

Next, the company or individual may file a reorganization plan - a proposal for debt settlement, asset disbursement, and structural changes in business operations. The debtor may file this within 120 days unless reduced or extended to a period not exceeding 18 months. The plan must:

• Identify debts
• Identify and categorize claims into classes (priority, secured, or general)
• Determination of payment treatment by class
• Specify payment method and implementation
• Present guidelines on business operations while in Chapter 11 bankruptcy

The debtor may send the plan along with a disclosure statement for court approval. Creditors shall receive these documents and have the opportunity to review and vote for or against the plan at a disclosure hearing. Approval shall make the plan effective, and the court may overturn creditors' disapproval if the court deems all terms fair and up to standard. The terms in a reorganization plan may include:

• Termination or maintenance of leases
• Changing interest rates in loans based on renegotiation
• Increasing the amortization length of loans
• Getting rid of non-profitable properties or assets

Lastly, the debtor repays the creditors over a period not usually exceeding five years.

A Chapter 11 bankruptcy offers debtors the opportunity to protect assets while still operating the business as a debtor-in-possession (DIP). This option keeps the existing owner and management team in place to operate the business, under the supervision of an assigned examiner or the court, which may seize control of the business if grossly mismanaged.

Note: Chapter 11 bankruptcy can last up to 10 years on a credit report.

What is Chapter 7 Bankruptcy in Illinois?

In line with the U.S. Bankruptcy Code, Chapter 7 bankruptcy is a type of bankruptcy that is focused on short-term debt relief through liquidation instead of reorganization. This tool is directed towards selling off the debtor’s nonexempt assets to pay off secured debts, distributing the remaining among creditors with unsecured debts, and discharging the debt. However, not all debts are dischargeable under Chapter 7, such as child support, alimony, criminal fines, student loans, and certain recent taxes.

The filing process for Chapter 7 bankruptcy involves:

• Undergoing and passing a means test to determine eligibility
• Finishing a credit counseling course
• Preparing, completing, and filing bankruptcy forms and paperwork disclosing all assets and debts, including assets transferred to family and friends within two years
• Automatic stay order (depending on the existence of a previously dismissed bankruptcy case)
• Meeting of the creditors or 341 hearing - Meeting the appointed trustee who will determine the accuracy of disclosed information and assets to liquidate for the benefit of the creditors
• Completing a financial management class
• Receiving a discharge order

From filing to receiving a discharge letter, the Chapter 7 bankruptcy process takes about four to five months; the hearing takes 30-45 days from the filing date, while discharge orders may take up to 90 days. Furthermore, it may take two or three reporting cycles with the credit reporting agency for the report to show that the debts are zeroed out. However, a Chapter 7 bankruptcy can stay on a credit report for up to 10 years, and this may affect the ability to receive certain loans for years.

Note: It is a felony (perjury) to fail to disclose complete assets in a bankruptcy.

Do I Qualify for a Chapter 7 Bankruptcy in Illinois?

Individuals, small businesses, and corporations can file this form of bankruptcy, which is great at getting rid of eligible unsecured debts like medical bills, personal loans, and credit card debts. The eligible persons or businesses that can file a Chapter 7 bankruptcy in Illinois depends on the means test - the process of determining if the debtor has enough disposable income to repay the debts under Chapter 13 – based on several criteria like:

• Household income (usually within six months)
• Household size
• Expenses within a set period

Persons whose annual income is below the state’s median income for the household size qualify for Chapter 7 bankruptcy and do not need to calculate expenses. However, persons who are above the median may check the disposable income after expenses. Parties who fail the test cannot appeal the decision but may reapply after six months or file other types of bankruptcies.

Note: A debtor must wait eight years after filing a Chapter 7 to file another Chapter 7 bankruptcy.

What is Chapter 13 Bankruptcy in Illinois?

Also called a wage earner’s plan, Chapter 13 bankruptcy is a bankruptcy option that deals with reorganizing and paying debts over a length of time, usually three to five years. Debtors - who wish to keep their assets - file this type of bankruptcy when the equities in the secured assets exceed those provided in the Illinois bankruptcy exemptions and, hence, cannot be protected under Chapter 7 bankruptcy.

Similar in some ways with Chapter 7 bankruptcy, the Chapter 13 bankruptcy process involves qualified persons receiving credit counseling from approved agencies during 180 days before filing (with certificate) and filing the required paperwork, which may include:

• A statement of financial affairs
• Certificate of credit counseling
• Copy of tax returns or recent annual transcript
• Evidence of monthly income from employers
• Official bankruptcy forms
• Repayment plan
• Schedules of assets and liabilities, executory contracts and unexpired leases, and income and expenditures

The repayment plan should contain a detailed outline of the monthly budget and how the debtor will make monthly payments to the appointed trustee, who will distribute the payment to priority, secured, and unsecured creditors over a specific period. The trustee will then determine the feasibility of the plan and the accuracy of provided information, which may lead to further adjustments to the plan. Factors that influence the monthly payment amount include:

• Total secured debts
• Total priority debts
• Disposable income
• Value of nonexempt assets
• Administrative expenses

However, if the debtor's financial status changes, the debtor may modify the plan or convert Chapter 13 bankruptcy into a Chapter 7 bankruptcy, following a meeting with creditors and filing an updated proof of claims. There is also an option for a special discharge if proven that:

• Payments were delayed due to circumstances beyond the debtor's control
• Each creditor (especially priority and secured) is settled as they would be under Chapter 7 bankruptcy
• Modifications to the repayment plan would not help

After filing the Chapter 13 bankruptcy, there will be an automatic stay order. Next, the debtor should complete a personal financial management class.

The debtor must make the first monthly payment within 30 days of filing and continue the payment throughout the specific repayment period. At the end of a Chapter 13 bankruptcy case, the court can dispose of the balance on unsecured debts.

Note: Chapter 13 bankruptcy lasts up to seven years on a credit report.

Do I Qualify for a Chapter 13 Bankruptcy in Illinois?

Chapter 13 bankruptcy is strictly available to individuals. Businesses cannot file this type of bankruptcy except when the debtor operates an unincorporated business or is self-employed and seeks relief from debts for which the debtor is personally liable. These persons may apply if:

• Secured debts do not exceed $419,275 (effective April 1, 2019)
• Unsecured debts do not exceed $1,257,850 (effective April 1, 2019)
• Debtor's disposable income can cover the monthly payment
• The debtor is not prohibited by another bankruptcy filing. For instance, one must wait four years after filing and discharging a Chapter 7 bankruptcy before filing a Chapter 13
• The debtor does not have a bankruptcy petition dismissed in the preceding 180 days due to willful violation of a court order
• There is no dismissed bankruptcy petition in the preceding 180 days due to the debtor’s request for dismissal after the creditor asked to lift an automatic stay
• There is evidence of filed income tax returns for the past four years
• The debtor received credit counseling from approved agencies within 180 days before filing

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Illinois?

The main difference between Chapter 7 and Chapter 13 bankruptcy is that the former is centered on the liquidation of nonexempt assets to settle debts while the latter deals with maintaining assets, reorganizing, and repaying debts in the long term. As a result, Chapter 13 takes much longer (three to five years) to settle debts compared to Chapter 7 (four to five months).

Furthermore, each form of bankruptcy is structured differently in terms of eligibility requirements and general procedure, especially in the following ways:

• Unlike with Chapter 7, businesses cannot file for Chapter 13 bankruptcy
• Chapter 13 bankruptcy has a debt limit, while Chapter 7 has an income limit
• Debt repayment for Chapter 13 bankruptcy is on a monthly basis, whereas Chapter 7 is immediate (after liquidation)
• Chapter 7 is less complicated in terms of creating and following a plan
• Chapter 7 has some non-dischargeable debts that may be dischargeable under Chapter 13, such as debts arising from a divorce property settlement and debts for malicious injury to property.
• Chapter 7 is limited in terms of modifying or renegotiating loan terms
• Chapter 13 bankruptcy lasts for seven years on a credit report, while Chapter 7 lasts 10 years

However, Chapter 7 and Chapter 13 bankruptcy offers an opportunity to get rid of unsecured debts and share a similar filing process.

What is Bankruptcy Protection in Illinois?

Bankruptcy protection refers to the immediate suspension of debt collection activities once the debtor files a bankruptcy petition. Following Section 362 of the Bankruptcy Code, an automatic stay on collection activities and certain debt-related proceedings and judgments, such as collector calls, foreclosure, repossession, evictions, lawsuits, and garnishments. This gives debtors time and space to reorganize debts and plan future actions.

Creditors are alerted immediately the bankruptcy petition is filed, and violation of the order may lead to:

• Court fines and sanction
• Payment of actual damages, including attorney’s fees and related cost
• Payment of punitive damages

However, there are limitations to the Automatic Stay Provision. For instance, the stay does not cover or stop:

• The start or continuation of a criminal proceeding against the debtor
• The start or continuation of a civil action against the debtor, especially concerning divorce, domestic violence, child custody, and establishment of paternity
• The collection or payment of domestic support obligations
• The restriction or suspension of a professional license, driver’s license, or recreational license
• The restriction of a tax refund, under state law
• The implementation of a medical obligation
• Government tax audits to determine liability

Furthermore, the duration of an automatic stay may depend on the existence of a previously dismissed bankruptcy case. In Illinois, an automatic stay may be for 30 days if the debtor has a dismissed bankruptcy case within the last year. Also, there may not be an automatic stay if the debtor has more than one bankruptcy case dismissed by the court. However, the debtor may file a motion to extend the stay, which shall be effective with the judge’s approval.

What are Illinois Bankruptcy Exemptions?

Illinois bankruptcy exemptions are provisions in state laws or rules that protect certain assets from creditors or liquidation in the bankruptcy process. The Illinois bankruptcy exemption system provides exemptions for homes, vehicles, personal property, and so on. Debtors can keep the following:

Homestead exemption: $15,000 individual or $30,000 joint amount in real or personal property such as a farm, condominium, a lot and buildings upon it.

Vehicle exemption: Not more than $2,400

Tools of the trade exemption: Not more than $1,500 in equity interest in implements, books, and work tools

Wage exemption: 85% minimum of unpaid weekly earnings or 45 times the federal minimum hourly wage, whichever is higher

Wildcard exemption: Up to $4,000 in nonexempt properties

Personal property exemption:

• Payment in personal bodily injury not exceeding $15,000
• Necessary clothes, school books, bible, and family pictures
• Settlements or awards from wrongful death lawsuits
• Prepaid tuition trust fund
• Proceeds from sold exempt properties
• Illinois College Savings Pool accounts
• Professionally prescribed health aids if invested more than a year before filing bankruptcy and amount is below the federal gift tax limit. If over the limit, investments should be over two years before filing

Pension and retirement plan exemption:

• Most state or local employees’ pension
• All tax-exempt retirement accounts like 401k and IRA
• Government and church plans

Insurance exemption:

• Life insurance proceeds to the debtor's dependent or spouse, as needed for support
• Disability and health benefits
• Life insurance, annuity proceeds, or cash value if the beneficiary is the debtor’s spouse, child, parent, or other dependents
• Fraternal society benefits
• Up to $15,000 in homeowners' proceeds if home destroyed

Government or public benefit exemptions:

• Social security
• Veterans’ benefits
• Workers’ compensation
• Crime victim compensation
• Unemployment compensation
• Workers occupational disease compensation
• Other government aid and federal restitutions

Miscellaneous exemptions:

• Alimony and child support
• Pre-need cemetery sales funds, trust funds, and care funds
• Business partnership property

Note: Only Illinois bankruptcy exemptions are applicable in the state. Federal laws are not recognized.

What are the Other Types of Bankruptcy in Illinois?

Apart from Chapter 7, Chapter 11, and Chapter 13 bankruptcy, the Chapter 12 bankruptcy is available for farmers and fishermen. Under the Bankruptcy Code, family farmers or fishermen with regular annual income may file this type of bankruptcy to adjust debts and pay debts according to a payment plan. Additionally, other types of bankruptcy in Illinois include:

• Chapter 9 bankruptcy: This is a type of bankruptcy that involves insolvent municipalities
• Chapter 15 bankruptcy: Provides tools for dealing with cross-country bankruptcies that involve creditors, debtors, and assets in more than one country

How Much Does It Cost to File Bankruptcy in Illinois?

The cost to file bankruptcy in Illinois differs based on the chapter of bankruptcy to be filed and attorney fees. For instance, filing a Chapter 7 bankruptcy costs $338 (which includes a $245 filing fee, $78 administrative fee, and $15 trustee surcharge). The bankruptcy filing fees remain uniform, regardless of the Illinois federal court where the petitioner files the case. Interested persons may review the fee schedule published by the United States bankruptcy court, Northern District of Illinois, for a list of bankruptcy fees.

On the other hand, attorney fees for bankruptcy cases vary based on the case complexity, filing location, and the bankruptcy attorney's expertise. For example, a chapter 7 bankruptcy attorney's fee may be more affordable than a chapter 13 bankruptcy attorney's, as Chapter 7 cases are often less complex.

Citizens unable to pay the court's bankruptcy filing fee may request an installment payment plan or seek a waiver if eligible.