If you are one of the thousands who face overwhelming debts in the Chicago area, help is available. Bankruptcy isn’t the only solution – it’s not right for everyone – but you should start by discussing your circumstances with an experienced Chicago bankruptcy lawyer. The right bankruptcy lawyer can assess your situation and suggest the solution or solutions best for you. If, together with an experienced Chicago bankruptcy lawyer, you determine that bankruptcy really is your only option, you’ll still have to decide between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.
A Chapter 7 bankruptcy is also known as a liquidation bankruptcy. A trustee is designated, and that trustee determines if you have unprotected assets that can be liquidated to pay off your debt. When there are no assets for a trustee to liquidate – which is frequently the case – creditors get nothing. A Chapter 7 bankruptcy will discharge most of your debt, but you are still required to pay off in full any taxes, child support, student loans, and any fines or fees owed to a criminal court or traffic court.
In a Chapter 13 bankruptcy, you pay off your debts by making payments based on your income and your expenses. A Chapter 13 bankruptcy typically takes 3-to-5 years to complete. Both types of personal bankruptcy offer advantages and disadvantages. Obviously, a Chapter 7 bankruptcy is quicker and cheaper, so you can start rebuilding your credit almost immediately. Lenders, naturally enough, prefer a Chapter 13 bankruptcy because it’s evidence that your debts – eventually – get paid.
Once again, it’s important to understand that bankruptcy isn’t the only solution – or always the best solution – for those who struggle with debt. Most people in debt in the Chicago area actually have a number of options available, but the first step is discussing those options – as quickly as possible – with an experienced Chicago bankruptcy lawyer. Help is here, but you must take the first step and make the call promptly.