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Two Options for Filing for Bankruptcy in Kane County

 Posted on April 19, 2022 in Bankruptcy

Kane County bankruptcy lawyerIf you are considering filing for bankruptcy, you may feel like you have very little control over your financial life or the bankruptcy process. This is not entirely true - people who file for bankruptcy in Illinois still have options. For most personal bankruptcy situations, there are two different types of bankruptcy your attorney will discuss with you to help you choose the best option. Chapter 7 and Chapter 13 bankruptcy filings can both lead to a new, debt-free life, but in different ways. Both types have benefits and drawbacks. The type of bankruptcy that will make the most sense for you will depend on your personal situation and preferences. It is important to speak with a lawyer to make sure that you have a complete understanding of how each type of bankruptcy will affect you. 

What Happens When I File for Chapter 7 Bankruptcy?

Chapter 7 bankruptcy can create a quicker and cleaner path to freedom from debt, but the major drawback is that your assets will be liquidated. When you file for Chapter 7 bankruptcy, the court will appoint a trustee. The trustee will then be responsible for identifying your assets and selling them off in order to pay off your creditors as much as possible. 

It is relevant here that not all of your property is subject to liquidation - there are statutory exemptions so that you can keep some personal property. An attorney can give you a better idea of which of your assets are or are not exempt. The benefit is that after liquidation, the rest of your eligible debt is forgiven, and you are free to start a new, debt-free life. 

What Happens in a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy may be a better option for you if you absolutely cannot tolerate the idea of liquidation. There is no liquidation involved in this type of bankruptcy, so you can keep all of your property. However, you will need to keep making payments toward your debt for a period of three to five more years before the rest of your debt is forgiven. 

When you file for Chapter 13 bankruptcy, all of your eligible debts are restructured so that you will make a single monthly payment for the predetermined period of time. These payments can be steep - they are generally calculated to consume most or all of your disposable income. The benefit is that you are likely to only end up paying a fraction of the amount you owe. 

Call a Kane County Bankruptcy Attorney

If you are thinking about filing for bankruptcy, DLAW, PC can help you make the right choices. Our experienced Geneva bankruptcy lawyers will help you understand your options. Call 331-222-7978 for a free consultation. 




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