Declaring bankruptcy can be one of the hardest decisions you can make. Besides the emotional blow, it can have a long-term and negative impact on your credit and future finances. If you choose to declare bankruptcy, make sure you have experienced Illinois bankruptcy attorneys that can help you through the complex legal process.
Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy
The first thing they will do is ask you to choose between Chapter 7 and Chapter 13 bankruptcy.
What is Chapter 7 Bankruptcy?
If you file for Chapter 7 bankruptcy, creditors cannot contact you, and you can get your discharge within three to four months of filing. While you may have to sell off some property to pay unsecured creditors, you will not have to give up all your personal belongings.
There is no limit to the debt you should have to be eligible for this type of filing, but only people who have unsecured debts, no regular income that can cover living expenses, no non-dischargeable debts (such as alimony and spousal support), and who cannot commit to a repayment plan anytime soon can file for Chapter 7 bankruptcy. You can go for alternatives but do so only if you have a bankruptcy attorney in your corner.
What is Chapter 13 Bankruptcy?
If you have disposable income and not a lot of debt, Illinois bankruptcy attorneys recommend that you file for Chapter 13 bankruptcy. It involves a repayment plan involving amounts you can afford to pay.
Even if your creditors object to the terms, they cannot do anything once the bankruptcy court approves your filing. Unlike Chapter 7 bankruptcy, you can get the interest rate reduced and even the balance you owe on a car loan if you file for Chapter 13.
You do not have to give up non-exempt properties since creditors are compensated in a Chapter 13 bankruptcy. Once you repay debts in a three to five-year repayment plan, any unpaid debt is eliminated under this bankruptcy filing.
Which One Is Better?
Most people opt for Chapter 7 bankruptcy since it is more cost-efficient and cheaper than Chapter 13. They do that after taking a ‘means test’, which evaluates the size of their family, expenses, and income.
However, while Chapter 7 bankruptcy eliminates eligible debts such as loans and credit card expenses, you still have to pay your taxes and student loans. Plus, it does not protect assets from foreclosure or repossession.
Contact Covert Marrero Covert for Bankruptcy Filing
Whether you want to file for Chapter 7 or 13 bankruptcy, you need attorneys in your corner who can handle both. Book a consultation with bankruptcy attorneys at Covert Marrero Covert for a consultation today. We have worked with several clients in this regard and can aid you in all of your legal issues.
Contact us at our offices in Schaumburg, Naperville, Warrenville, and Illinois. We can also arrange an appointment at a convenient place for you if you want. All of our attorneys are compassionate by nature and will ensure you get the best solutions to your financial issues.