The Three Types of Bankruptcies
In previous generations, personal bankruptcy was thought by some to be a shameful last resort. In today’s economy, however, personal bankruptcy filings are no longer the end your credit. Bankruptcy is an acceptable, responsible way to organize your debts and to obtain a more-or-less fresh financial start. In or near the greater Chicago area, if you need to file for bankruptcy or simply need to learn more about bankruptcy, speak as quickly as possible with an experienced Chicago bankruptcy lawyer. The three types of bankruptcies are:
1. Chapter 7, the most common type of personal bankruptcy. In a Chapter 7 bankruptcy, the unsecured debts that you owe are discharged. A trustee is appointed to facilitate the process and to ensure that certain assets are liquidated to pay your creditors and that other assets, such as your vehicle and your home (depending on the equity) are protected. In four-to-six months, most of your debts are discharged, and you can begin rebuilding credit.
2. Chapter 13 is the other basic type of individual bankruptcy. If you have a regular income and earn too much to qualify for a Chapter 7 bankruptcy, a Chapter 13 bankruptcy will create a repayment plan for all or most of your debts over a period of three-to-five years. If your financial circumstances change during that time, it’s sometimes possible to have the bankruptcy dismissed or converted into a Chapter 7 bankruptcy.
3. Chapter 11 bankruptcies are filed by businesses to reorganize their debts while they continue doing business.
If you are thinking about bankruptcy in the greater Chicago area, the most important thing to do is to obtain the advice and services of an experienced Chicago bankruptcy lawyer. Any bankruptcy will remain on your credit report for a number of years. However, by carefully re-establishing and managing your credit and by promptly repaying any new debt, it is possible to repair your credit and in some cases even obtain a mortgage. If you are drowning in debt, don’t wait another day – arrange at once to discuss your finances with an experienced Chicago bankruptcy lawyer.
