Understanding Your Options when Considering Personal Bankruptcy Protection

The two most common types of bankruptcy protection sought by individuals and families are Chapter 7 and Chapter 13 bankruptcy. Each of these filings has very specific qualifications and requirements which if met can result in enormous financial relief in the form of protection from creditors and collectors. Speak with a bankruptcy attorney as soon as possible to find out if bankruptcy is right for your situation or if you would like to find out about alternatives to bankruptcy.

Chapter 7 bankruptcy involves liquidating certain assets in order to pay off debts. Some assets are fully protected from liquidation or debt repayment. These include pensions, retirement plans, alimony, child support, Social Security benefits, unemployment benefits, workers' compensation, Illinois College Savings Pool Accounts, certain personal items, etc. Other property which may not be protected from liquidation can include vehicles, appliances, house and the like. Nonexempt assets are used to pay off creditors after debt balances are negotiated. Some debts such as taxes and certain student loans cannot be handled by bankruptcy but in a matter of weeks the petitioner may be virtually debt free or at least absolved of a great amount of debts.

Chapter 13 differs from Chapter 7 in a number of aspects. While creditors are negotiated with in order to reduce debts, that amount is not necessarily paid off through liquidation of assets. A payment plan is worked out instead that makes paying off the debts much more manageable. This form of bankruptcy protection allows the petitioner to avoid repossession or foreclosure and become absolved of qualifying debts after a few years.

Which form of bankruptcy protection is right for you?

As you can see from the brief description above, there are significant differences between Chapter 13 and Chapter 7 bankruptcy protection. Your specific financial situation as well as what you wish to achieve through bankruptcy are important factors which must be carefully considered. A bankruptcy lawyer with us at the law offices of Joseph P. Doyle may be able to help you get the outcome you are looking for. Both forms of bankruptcy protection provide instant relief for debtors by putting a stop to wage garnishment, foreclosure actions, liens and incessant creditor collection calls. Don't hesitate to contact our firm to schedule a free initial case evaluation. We may be able to help you attain debt relief far more quickly than you may have imagined!