There are times in life when the only option left is bankruptcy. This can be because of a divorce, medical bills or a failing business. In fact, people file for bankruptcy for a lot of reasons, but there are basically two main types of bankruptcy that Bankruptcy Attorneys in Naperville recommend most consumers file. These are known as Chapter 7 and Chapter 13. If you are considering bankruptcy, it is important to understand the differences between them.
When you file a Chapter 7 bankruptcy your property, aside from those items which are exempt under the law, will be sold you repay as much of your debt as possible. You become no longer responsible for most of your debts, although some such as child support or student loans cannot be erased. It does remove the worry over late bills and stops debt collectors from constantly contacting you. But, it is important to remember that your credit score will be negatively impacted and it could be difficult to get a loan or credit card for a very long time.
Chapter 13 is much different. In this instance you work with your creditors and an attorney or adviser to draft a repayment plan for your debts. There are limits as to how much debt a person can have to file this type of bankruptcy plan. Attending a credit counseling service is typically mandatory prior to filing and you will need to prove an ability to repay before a plan is able to be agreed on.
The benefit for Chapter 13 is that your credit will not be as negatively affected as it is with Chapter 7 and it will typically recover faster as well. Chapter 13 is not an option if you do not have an adequate amount of income to make at least minimal payments towards your secured debts.
It can be confusing to deal with the paperwork and understand the regulations on your own which is why Bankruptcy Attorneys in Naperville are available to assist clients with these cases. They can advise on what you will qualify for as well as what will be the most beneficial for your personal situation. For more information contact Chicago Debt Solutions. To see their business reviews visit BBB page.
