The word “bankruptcy” has a lot of negative connotations, but when your debts are piling up, and there is no relief in sight, bankruptcy may indeed be your best option. It can be a great stress relief to get your creditors off your back and start fresh. However, the process can also be confusing, especially for those who have never been through it before. An experienced bankruptcy attorney can help you decide which type of bankruptcy works for you (typically Chapter 7 or Chapter 13 for individuals) and guide you through the entire legal process.
In a Chapter 7 bankruptcy, a debtor may end up wiping their liability slate clean. Usually, this works for those with large credit card debt or medical bills and not enough income to cover the expenses. Although part of the process includes a liquidation of the debtor’s assets, some assets can be exempt, and an attorney can help you determine which assets you may have. Often, debtors do not have anything else of significant value, so their bankruptcies fall into the “no-asset” category.
The discharge for a Chapter 7 bankruptcy often only takes a few months, and the filer can move along without any more creditors calling them. The downside, of course, is the impact on the filer’s credit score, and the fact that the bankruptcy will remain on his or her credit report for 10 years. Still, most people can apply for and receive credit within that time period. They may be required to pay higher interest rates or have lower credit limits.
The other most common option for individuals filing bankruptcy is Chapter 13. Some debtors may have to opt for Chapter 13 because their income is too high to file for Chapter 7, and/or because they wish to keep a home or vehicle that would otherwise need to be liquidated. Rather than having balances forgiven through the bankruptcy, the filer can set up a plan to pay back the creditors within three to five years. Some creditors may accept lower amounts than what is actually owed at the time of filing.
When the debtor goes to court, the plan may be either approved or rejected. An attorney can advise you in setting up a plan that will likely be accepted by the court and that fits your budget. The filer will not receive a discharge right away, but rather must wait until the debts are paid. A Chapter 13 bankruptcy will stay on the debtor’s credit report for seven years in most cases.
Contact a Knowledgeable Oak Forest Bankruptcy Attorney for Help
If you are facing insurmountable debt, you should enlist the help of an Orland Park bankruptcy lawyer. Anderson and Associates, P.C. can provide you with advice and guidance throughout your bankruptcy process. Call 708-226-9904 to set up a free consultation.