Is There More Than One Type of Consumer Bankruptcy?
If you are struggling with debt in Oak Park and you are weighing your options, you might be considering personal bankruptcy. Yet if you do not have any experience with the consumer bankruptcy process, and you do not have any friends or family members who have filed for bankruptcy, it can be difficult to understand how the process works. In particular, you might be wondering, “Is there more than one type of consumer bankruptcy?” If you have done a quick internet search for bankruptcy, you have probably discovered that there are many different chapters under which a bankruptcy case can be filed, and it can be extremely confusing to navigate the U.S. Bankruptcy Code. You may notice that some types of bankruptcy can be used for individuals and businesses alike, while others are limited to individuals and others still are limited only to businesses. All of that is a lot of information to parse.
Generally speaking, there are two major types of consumer bankruptcy, but sometimes consumers will file for bankruptcy under a third type depending upon the circumstances. Here is some more information to help you plan ahead.
Chapter 7 Bankruptcy for Consumers
Chapter 7 bankruptcy is a common type of bankruptcy for consumers. Do not get confused if you see that a business has filed for Chapter 7 bankruptcy and think that this type of bankruptcy is just for businesses. Both consumers and businesses can file for Chapter 7 bankruptcy (although determining eligibility for a consumer Chapter 7 bankruptcy is much different than determining eligibility for a business Chapter 7 bankruptcy).
This particular type of bankruptcy is a liquidation bankruptcy. Accordingly, all of your non-exempt assets will be liquidated to repay your creditors and to make you eligible for a bankruptcy discharge. In order for a consumer to be eligible for Chapter 7 bankruptcy, she or he (or a married couple) must be able to pass the “means test.” A consumer bankruptcy lawyer in Oak Park can provide you with more information.
Chapter 13 Bankruptcy for Consumers
Chapter 13 bankruptcy is another common type of bankruptcy for individuals and married couples. This type of bankruptcy is only for consumers—business entities cannot file for Chapter 13 bankruptcy. This is a reorganization bankruptcy in which a consumer debtor makes a debt repayment plan to cover a period of three to five years. During that time, the debtor will make regular payments that will go to repay creditors, and at the end of the period, remaining debts can be discharged.
To qualify, you must be able to show that you are a wage earner (i.e., that you have a steady job and can make the payments in your repayment plan), and you cannot have too much debt. The Chapter 13 debt limits currently are $394,725 in unsecured debt and $1,184,200 in secured debt.
Occasional Chapter 11 Bankruptcy for Consumers
Chapter 11 bankruptcy is a reorganization bankruptcy (similar to Chapter 13) that is usually for businesses. However, when consumers have too much debt to file for Chapter 13 bankruptcy, Chapter 11 bankruptcy may be an option.
Contact an Oak Park Consumer Bankruptcy Lawyer
Do you have questions about filing for consumer bankruptcy, or do you need assistance with your case? One of our experienced Oak Park consumer bankruptcy lawyers can speak with you today. We can help you to determine the best type of bankruptcy for your needs and situation, and we can advocate for you throughout the bankruptcy process. Contact the Emerson Law Firm today for more information.
See Related Blog Posts:
What is Chapter 13 Bankruptcy Good For?
New Study Addresses Racial Disparities and Consumer Bankruptcy
Generally speaking, there are two major types of consumer bankruptcy, but sometimes consumers will file for bankruptcy under a third type depending upon the circumstances. Here is some more information to help you plan ahead.
Chapter 7 Bankruptcy for Consumers
Chapter 7 bankruptcy is a common type of bankruptcy for consumers. Do not get confused if you see that a business has filed for Chapter 7 bankruptcy and think that this type of bankruptcy is just for businesses. Both consumers and businesses can file for Chapter 7 bankruptcy (although determining eligibility for a consumer Chapter 7 bankruptcy is much different than determining eligibility for a business Chapter 7 bankruptcy).
This particular type of bankruptcy is a liquidation bankruptcy. Accordingly, all of your non-exempt assets will be liquidated to repay your creditors and to make you eligible for a bankruptcy discharge. In order for a consumer to be eligible for Chapter 7 bankruptcy, she or he (or a married couple) must be able to pass the “means test.” A consumer bankruptcy lawyer in Oak Park can provide you with more information.
Chapter 13 Bankruptcy for Consumers
Chapter 13 bankruptcy is another common type of bankruptcy for individuals and married couples. This type of bankruptcy is only for consumers—business entities cannot file for Chapter 13 bankruptcy. This is a reorganization bankruptcy in which a consumer debtor makes a debt repayment plan to cover a period of three to five years. During that time, the debtor will make regular payments that will go to repay creditors, and at the end of the period, remaining debts can be discharged.
To qualify, you must be able to show that you are a wage earner (i.e., that you have a steady job and can make the payments in your repayment plan), and you cannot have too much debt. The Chapter 13 debt limits currently are $394,725 in unsecured debt and $1,184,200 in secured debt.
Occasional Chapter 11 Bankruptcy for Consumers
Chapter 11 bankruptcy is a reorganization bankruptcy (similar to Chapter 13) that is usually for businesses. However, when consumers have too much debt to file for Chapter 13 bankruptcy, Chapter 11 bankruptcy may be an option.
Contact an Oak Park Consumer Bankruptcy Lawyer
Do you have questions about filing for consumer bankruptcy, or do you need assistance with your case? One of our experienced Oak Park consumer bankruptcy lawyers can speak with you today. We can help you to determine the best type of bankruptcy for your needs and situation, and we can advocate for you throughout the bankruptcy process. Contact the Emerson Law Firm today for more information.
See Related Blog Posts:
What is Chapter 13 Bankruptcy Good For?
New Study Addresses Racial Disparities and Consumer Bankruptcy
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