Frequently Asked Questions: Chapter 7 Vs Chapter 13
By Glanzer & Associates, P.C.
Jun. 13, 2011 4:19p
Which kind of bankruptcy filing should you choose?
One of the most common questions that prospective clients looking into improving their financial situation by filing for bankruptcy have is whether to file under Chapter 13 or Chapter 7. The answer to this question is, as is so often the case, complicated. By consulting with an experienced Chicago bankruptcy attorney, you can benefit from the expert advice of a seasoned veteran of the financial legal system. Only then can you ensure that you make the best decision for your unique situation. This simple guide can help you understand some of the basics, however.
Chapter 7 Bankruptcy
This is the most common kind of bankruptcy filed in the country. Under Chapter 7, the court will take possession of your non-exempt assets and ‘liquidate’ them, selling them to generate as much revenue as quickly as possible. The profit from liquidating your assets will then be used to pay off your creditors, officially discharging your debt and allowing you to move on with your life.
This process takes relatively little time to complete, often just a few months. If you are facing a large amount of debt and feel helpless to pay it off through any normal means, Chapter 7 is probably the best option for you.
Chapter 13 Bankruptcy
Chapter 13 filings tend to take longer to complete, but have the benefit of protecting your assets from liquidation. The court will analyze your debt as well as your income levels and available assets, then create a re-payment plan, usually taking 3-5 years to finish. You will be mandated to make a simple monthly payment, allowing you the breathing room to end your debt without pressure from your creditors.
This plan is generally beneficial to those with significant assets they wish to protect, or a steady source of income that can be used to avoid liquidation.
An Attorney In Your Corner
It is important to consult with a qualified Chicago bankruptcy lawyer before making decisions about your financial future. At Glanzer and Associates, our highly skilled team is dedicated to helping free our clients from the crushing weight of debt.
Contact a Chicago bankruptcy attorney without delay!
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