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[IL] Which state’s court should a debtor file bankruptcy in when relocating to a new state?
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Hi! I need assistance in deciding which bankruptcy option is better for me. On the 7th of this month, I started having my wages garnished unexpectedly, from a debt that occurred in 2020. I'm currently in the process of moving states, so I'm not sure which state to file in or how to do that, so I figured this would be a good first step. I can provide any and all information that may be needed. My main focus is filing some kind of bankruptcy, stopping the wage garnishment ASAP, and hiring an attorney on payment plans, if possible, to really help me with everything. Thank you so much.
I understand that dealing with wage garnishment and bankruptcy options can be overwhelming. Can you tell me which state you are currently living in and where you plan to move?
I'm currently living in Illinois, but I'll be starting the drive to Florida on Saturday, so I should be there by Monday at the latest.
Have you already consulted with any financial advisors or attorneys regarding your situation?
Yes. I tried talking with the firm that is over the garnishment, a few other debt places, and I just spoke with an attorney who was really recommended by friends, but he isn't able to assist me with my case since he's a lawyer in Kentucky.
Is there anything else the bankruptcy lawyer should know before I connect you? Rest assured they'll be able to help with your bankruptcy options.
No.
Hello, I'm Legal Eagle. I'm an attorney who works in your area of law, and I'll help you sort this out today. I've read what you shared, so let's go over what's happening and what your best next steps look like. Have you considered any specific bankruptcy options, like Chapter 7 or Chapter 13, to manage your debts and stop the wage garnishment?
Hey! Thank you so much for taking the time to help me today. So far, I believe Chapter 7, but I'm not sure which option is better for me. I don't rent or own a house or a car. My debt is mainly credit card, one auto loan, and medical debt. The wage garnishment is from a credit card debt.
Since you're moving from Illinois to Florida, do you know how long you'll be staying in Florida? This can affect where you should file for bankruptcy.
Whichever option takes care of all my debt, stops the garnishment, and lets me start over. I also don't have a license, so I'm not worried about buying a car or anything like that anytime soon, the same goes with a house.
What do you suggest?
I'll be moving back long term.
No problem! I'll certainly address that. Anything else you'd like to add that you think is relevant before I answer?
The only other thing that I would like to add is that I do work fully remote, so I'm not sure if that changes anything at all, but other than that, I'm ready for an answer. Thank you for asking.
Ok! I've been working on an answer while we've been chatting, so it'll just be a moment.
No worries! Thank you for letting me know. I really appreciate it.
The short answer is that Chapter 7 is almost certainly the right fit for you. With no house, no car, and mostly credit card and medical debt, you have the profile that Chapter 7 is designed for, and it will stop the garnishment immediately once filed. The key question right now is which state you file in, and that answer depends on where you have been living.
That's the short answer. Here is the long answer:
You have to file bankruptcy in the federal district where you have lived for the greater part of the last 180 days, a rule set out in the bankruptcy venue statute, 28 U.S.C. § 1408. Since you are still in Illinois and only leaving Saturday, Illinois is where you have been domiciled for most of that window. Filing in Illinois now makes sense because the automatic stay, provided for under 11 U.S.C. § 362, kicks in the moment the petition is filed and stops all collection activity, including wage garnishment, right away. Once your case is filed, the creditor garnishing your wages must stop. Chapter 7, governed by 11 U.S.C. Chapter 7, also discharges unsecured debt like credit cards and medical bills, and your auto loan can be included if you have no vehicle and are not keeping it. Working remotely does not change any of this. Your state of residence controls, not where your employer is located.
Here is what you can do legally, step by step:
File your Chapter 7 petition in the federal bankruptcy court for your Illinois district before you leave, or shortly after arriving in Florida if you wait. You can file on your own using the court's official forms, or find an attorney who takes payment plans. Many bankruptcy attorneys offer low flat fees and allow payment over time. The federal courts' filing information is at https://www.uscourts.gov/services-forms/bankruptcy.
Once your petition is filed, notify your employer's payroll department in writing and provide them a copy of your bankruptcy case number along with the notice of the automatic stay. Garnishments must stop the moment the stay is in effect. If the creditor does not release the hold, they can be held in contempt of the bankruptcy court.
To find an attorney on a payment plan, the National Association of Consumer Bankruptcy Attorneys has a directory of attorneys in both Illinois and Florida, many of whom offer free consultations and flexible fees for Chapter 7 cases. You can search at https://www.nacba.org.
Bonus tip: money taken from your wages within 90 days before your filing can sometimes be recovered as a preference payment under 11 U.S.C. § 547, depending on the amount. Mention the garnishment start date to whichever attorney you speak with, so you know whether you have a shot at getting any of that money back.
Does that help clarify things? I want to make sure I didn't leave anything out.
That certainly makes sense and answers a lot of questions that I have! Is there any way that all of this information can be sent to me via email, please?
Sure thing! I can't personally email you, but I am confident the system sends you an email each time I respond, along with a link you can click to see the entire discussion.
Oh, okay! Well, thank you so much again. Is there anything else that I should keep in mind while going through this? I'm thinking that for me, hiring an attorney is the best option. Is there any way that you all can pair me with anyone, or would that be something that I have to do on my own?
Sure thing! Try upsolve.org. They often help people do it for free!
Alright then, I do believe that I'm set from here. Thank you so much again! You've been a huge help.
I hope I was able to help resolve your issue! If you have any other questions, feel free to ask.
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