Filing for bankruptcy can be overwhelming, particularly when an Illinois resident does not understand the process. They may hear terms related to bankruptcy and experience confusion when they attempt to understand what it all means. Readers should understand that the information contained in this post does not provide any legal advice and the best answers that they can get to their bankruptcy questions may come from bankruptcy attorneys.
However, one important concept that readers can learn about before filing for bankruptcy is liquidation. This post will only touch on the topic and further inquiry is encouraged for those who are considering filing for Chapter 7 bankruptcy.
Selling off property to satisfy creditors
Chapter 7 bankruptcy's liquidation provisions are premised off the idea that those who use Chapter 7 bankruptcy do not have disposable income to use to pay off their debts. Unlike Chapter 13 bankruptcy, which reorganizes an individual's income so that they may pay down their debts, Chapter 7 bankruptcy presumes that a debtor has no extra money with which to use to reduce their outstanding financial obligations.
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