Types of Bankruptcy
Properly Weighing Your Bankruptcy Options
There are several different types of bankruptcy that are available in the United States. Depending upon the particular situation, individuals and business entities might file for bankruptcy under different chapters of the U.S. Bankruptcy Code. The two most common chapters are
Chapter 7 and
Chapter 7 Bankruptcy – This type of bankruptcy is often referred to as "liquidation" because the debtor's nonexempt assets will be surrendered to the bankruptcy court, where the bankruptcy trustee will sell the property and then use the proceeds to pay off creditors. The end result of a Chapter 7 bankruptcy is the complete discharge of all eligible debts.
Chapter 13 Bankruptcy – Often referred to as the "wage earner plan," a Chapter 13 bankruptcy involves creating a repayment schedule in order to repay creditors a portion of the debts owed. Over a three-to-five year period, the debtor makes a monthly payment to the bankruptcy trustee, who then pays creditors different portions of this payment accordingly. Upon the successful completion of the repayment pan, the debtor's eligible, unsecured debt will be discharged.
Qualifying for a Chapter 7 filing can be difficult. It can also be tough to know whether Chapter 13 is the right option for you. Generally speaking, Chapter 7 is a better option for lower-income individuals and those who have fewer assets. However, there are exceptions, so it is important to talk to an attorney about your unique case. Chapter 13 is most often applicable in cases in which the debtor has considerable property and assets to protect, and for those individuals who are earning steady incomes.
Contact a Dupage County Bankruptcy Lawyer
To find out more about the types of bankruptcy available and which option might be right for you, contact Dupage County bankruptcy lawyer Joseph P. Doyle for a free evaluation of your bankruptcy case. We represent clients throughout Dupage County and the surrounding areas in Illinois. Contact the Law Office of Joseph Doyle today so we can start assisting you!