Things to Know About Consumer Bankruptcy in the New Year

When you are thinking about filing for consumer bankruptcy or looking into your options, it can be difficult to know which information is essential to your case, and what bankruptcy myths you could be encountering from friends or family members, or from internet searches. Our experienced Oak Park bankruptcy lawyers want to give you the information you need as you consider the possibility of Chapter 7 or Chapter 13 bankruptcy. The following are some of the top things to know about consumer bankruptcy in the New Year.

Consumer Bankruptcy Can Help You to Get Back on Track Financially

Consumer bankruptcy under any chapter can help you to get back on track financially, whether that involves a relatively quick discharge of debts through Chapter 7 bankruptcy or a longer repayment plan after which debts can be discharged under Chapter 13 bankruptcy.

Chapter 7 and Chapter 13 are Two Different Types of Consumer Bankruptcy

Both Chapter 7 and Chapter 13 are types of consumer bankruptcy, and they are the two most common chapters under which individuals file for bankruptcy according to the U.S. Bankruptcy Code. Chapter 7 is a type of liquidation bankruptcy, while Chapter 13 bankruptcy is a type of reorganization bankruptcy.

Consumers May Need to File for Chapter 11 Bankruptcy in Some Circumstances

When a consumer wants to file for Chapter 13 bankruptcy but has too much debt, that consumer usually can file for Chapter 11 bankruptcy instead. The debt limits for Chapter 13 bankruptcy in 2021 are $1,257,850 in secured debt and $419,275 in unsecured debt.

Not All Consumer Bankruptcies are Liquidation Bankruptcies

While many consumers assume that all bankruptcies require the liquidation of assets, it is important to know that assets are only liquidated in Chapter 7 bankruptcy.

Automatic Stay Can Stop Debt Collectors from Taking Action Against You

The automatic stay attaches to a bankruptcy case under any chapter as soon as an individual files, and it stops debt collectors from making contact with you or taking any action to continue attempting to collect on a debt, including lawsuits.

Chapter 13 Bankruptcy Can Prevent Foreclosure

Due to the automatic stay and the nature of Chapter 13 bankruptcy, filing for Chapter 13 bankruptcy can allow you to stop a foreclosure and to remain in your home. The automatic stay will stop the foreclosure process from moving forward, while the Chapter 13 reorganization plan can allow you to get caught up on mortgage payments.

Our Oak Park Bankruptcy Lawyers Can Help You

Bankruptcy is extremely complicated, and you should always seek advice from an Oak Park bankruptcy lawyer who can help you with your case.

Contact an Oak Park Bankruptcy Lawyer

If you are considering the possibility of filing for consumer bankruptcy in the New Year, you should seek advice from an experienced Oak Park bankruptcy attorney who can assist you with your case. Our firm can discuss your eligibility for Chapter 7 or Chapter 13 bankruptcy, and we can represent you throughout your case. Contact the Emerson Law Firm to learn more about the services we provide to consumers in the Chicago area.



See Related Blog Posts:

How Does Chapter 13 Bankruptcy Work?

Consumer Bankruptcy and the Holidays: Things to Know

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