Legal Question in Bankruptcy in Illinois

You would consider bankruptcy, which could easily screw up your credit rating for years, instead of hiring an attorney for a few hundred to attempt to compromise this debt and perhaps arrange a payment plan?????? This is the kind of decision that only you can make; the likelihood is that if you chapter 7 they will get something (assuming you own anything net of your total liabilities) but not what their judgment allows, but then you've compounded the public record....and you have to report all liabilities...... So in short, the answer is "yes" with the caveat that there are other ways of dealing with this situation; just don't be pennywise and pound foolish.

Bankruptcy is designed to protect you from the effects of this judgment. Speak to an attorney quickly because the Citation to Discover Assets will require you to appear in Court and if you do not there are serious consequences. Under Illinois and Federal law, the assets you have mentioned would be exempt so you would not have to worry about the creditor taking your furniture, cars etc.

The information you received in the past is generally accurate, although I do not know how an attorney would have been so specific about "never" being able to collect. Should your circumstances have improved, then collection may have become feasible.

As you were expecting based on what you were told, a default judgment was entered. A prove-up is simply the court requiring evidence (testimony) that there is a basis for the judgment. This could have been handled through a verified court complaint (attested by someone with knowledge), but apparently the case was not filed that way, resulting in the need for a prove-up hearing. That did not change the result you were expecting.

$12,000.00 must be the amount of the judgment. The intent of the Citation hearing is for the creditor to determine if there is a source for payment. You would be examined under oath concerning your assets. To the extent they discover that you do not have any non-exempt assets, there will not be any consequence. To the extent you have non-exempt assets, the creditor can ask the judge for assets to be turned over.

As someone else has already replied, you should consider options before deciding on bankruptcy. If this is your only debt of any consequence, perhaps you can negotiate a settlement or payment plan. If you have other bills or if this is going to impact you significantly, then perhaps bankruptcy is the answer.

Based on your description of your assets, it sounds like there will be very little from which your creditors can collect. Likewise, there should not be any issues with owning assets should you file bankruptcy.

That said, the scope of this space does not afford an opportunity to assess the situation and advise you. I recommend you assemble for legal consultation: (1) your income information for August 2011 through the present, including wages and unemployment during that period; (2) all your bills (copies neatly assembled, back pages included); (3) last four years� tax returns; (4) a credit report (use www.annualcreditreport.com to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. You are not required to use an attorney in your area.

I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.