What is the difference between a chapter 7 and a chapter 13 bankruptcy?
After you have decided to file for bankruptcy, you may have to choose between the two types of bankruptcy proceedings that are available for individuals – Chapter 7 bankruptcy and Chapter 13 bankruptcy – depending on your eligibility for each. Deciding which type of bankruptcy is right for you is an important choice, because the type will determine whether you have to pay back at least a portion of your debts. However, in some cases, you may not be eligible for one type of bankruptcy or the other, so you will not have a choice as to what type of bankruptcy to file.
Chapter 7 is a complete liquidation. It is designed for individuals and certain companies who do not have the ability to pay their debts. In chapter 7, the trustee will liquidate any non-exempt property in order to distribute the proceeds to creditors according to the Bankruptcy Code. Each state allows the debtor to exempt, or protect, certain assets, which the debtor can keep after bankruptcy. In reality, most debtors do not have significant assets worth liquidating. But to be sure, contact an attorney at the Chicago Bankruptcy Network to review your assets and exemptions available to you. Chapter 13 enables individuals with steady income to repay their debts over time, with court protection from their creditors. Chapter 13 can be used to stop foreclosure of your home, or it may be used to stop your vehicle from being repossessed. Often, debtors are able to repay their creditors at a discounted rate, depending on their individual situations. Call a lawyer from the Chicago Bankruptcy N
