Types of Bankruptcy

Attorney for Bankruptcy in Dupage County, Illinois

There are several different types of bankruptcy in the U.S. Depending upon the particular situation, an individual or business entity may file for bankruptcy under a different chapter of the United States Bankruptcy Code. The two most common chapters are Chapter 7 and Chapter 13.

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, and it may 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 cases and those which involve little to no assets. However, there are exceptions and as such it is important to talk to an attorney about your unique case. Chapter 13 is most often applicable in cases where the debtor has considerable property and assets to protect, and for those individuals who are earning steady incomes.

Consult a Dupage County Bankruptcy Lawyer

To find out more about the types of bankruptcy and which option may be right for you, contact Dupage County bankruptcy lawyer Joseph Doyle for a free consultation. We represent clients throughout Dupage County and the surrounding areas in Illinois and are standing by to see how we can assist you.

Contact the Law Office of Joseph Doyle today!