Bankruptcy Protection Overview
It’s not uncommon nowadays for people to fall behind on their bills, expenses, and financial obligations. All it takes is one unpredicted job loss, one unexpected illness, or one sudden family emergency for a person in an otherwise excellent financial position to suddenly find themselves over their head with too much debt. For people with this type of mounting, inescapable amount of debt, bankruptcy provides the relief they need to get a handle on their finances and become financially stable once again.
Types of Bankruptcy
Bankruptcy is the legal process of alleviating individuals and businesses of their debt, either through liquidation or reorganization. For individuals and families, there are two main types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 7 bankruptcy, also referred to as liquidation, completely eliminates all of debtor’s legal liability to pay unsecured debt, such as outstanding credit card bills, medical bills, unsecured personal loans, payday loans, judgments, etc. In return for eliminating the majority of your debt, some of your non-exempt property or possessions may be sold in order to help off-set some of your debt. It should be noted that Chapter 7 bankruptcy does not erase all of your debt. Certain debt cannot be eliminated in Chapter 7 bankruptcy, such as child support, alimony/spousal support, student loans, damages for personal injury accidents, tax debt, etc.
Chapter 13 bankruptcy, also referred to as reorganization, consolidates a debtor’s debt and restructures it into an affordable monthly payment plan. Unlike Chapter 7 bankruptcy, Chapter 13 does not completely eliminate a debtor’s unsecured debt. Under Chapter 13 bankruptcy, you will still be required to repay a portion of or all of your debt. However, you pay off your debt in affordable monthly payments over a period of three to five years. The amount you pay every month will be determined by the court and in relation to your monthly income, current monthly expenses, and non exempt assets, this way you are not required to pay back more than you can afford each month. Furthermore, you will most likely get to keep all of your assets and property throughout the bankruptcy process.
Credit Restoration
After you have filed for bankruptcy under either Chapter 7 or Chapter 13, it’s time to start restoring your credit and improving your credit score. Many people who file for bankruptcy wrongly believe that their credit is permanently damaged. This is simply not true. There are several steps you can take to rebuild your credit and good financial standing. The best thing you can do is open a line of credit or obtain a small bank loan. Once you have a line of credit or a loan in your name, you can improve your credit by making all monthly payments on time. You should also try to pay your bills early and pay more than the minimum payment amount.
Click here for more information on how to restore your credit after bankruptcy.
Contact a Chicago Bankruptcy Attorney
It’s important for any person filing for bankruptcy to work with a skilled attorney who understands the complex bankruptcy laws and court systems, as well as your personal financial situation. With years of experience practicing bankruptcy law in Chicago, I am very knowledgeable about the Chapter 7 and Chapter 13 bankruptcies process, and can provide you with the professional legal counsel and guidance you need to successfully file for bankruptcy. I can review your petition, discuss your situation in depth, and answer any questions or concerns you may have in order to help you make the best decision possible concerning your financial burden. My priorities are helping you get back on your feet financially and alleviating the debt and financial burdens that are weighing you down.
To speak directly, one on one, with an experienced and knowledgeable Chicago Bankruptcy Lawyer, please contact Swanson & Wagman LLC at (312) 666-7882. I have helped thousands of hardworking individuals and families obtain the financial relief they desperately need through Chapter 7 and Chapter 13 bankruptcy.