Consumer Bankruptcy FAQs
If you are considering whether consumer bankruptcy is the right path for you, we know that you probably have many different questions. When you have questions or concerns, it is important to know that the specific facts of your situation could affect certain answers to inquiries you have. As such, you should always speak directly with an Oak Park bankruptcy lawyer who can assess your case and provide you with tailored responses. In the meantime, the following are some frequently asked questions about consumer bankruptcy, along with replies that can be helpful to you as you consider whether bankruptcy is the right choice for you.
Can I Choose Between Chapter 7 and Chapter 13 Bankruptcy?
In most situations, the U.S. Bankruptcy Code does not permit a debtor to choose between Chapter 7 and Chapter 13 bankruptcy because each type of bankruptcy has different requirements. In order to qualify for Chapter 7 bankruptcy, you need to prove that your income and assets are low enough that it makes sense to file for a liquidation bankruptcy. Differently, to qualify for Chapter 13 bankruptcy, you need to be able to show that you have a steady income that will allow you to meet the terms of a repayment plan for anywhere from two to five years.
What is a Liquidation Bankruptcy?
Chapter 7 bankruptcy is a type of liquidation bankruptcy. A liquidation bankruptcy is one in which all non-exempt assets owned by a debtor will be liquidated in order to repay creditors.
What is a Reorganization Bankruptcy?
Chapter 13 bankruptcy is a form of reorganization bankruptcy, and this type of bankruptcy is sometimes known as a “wage earner’s” bankruptcy. In this type of bankruptcy, the debtor creates a repayment plan in which she or he will repay a portion of debts over a period of years. Once the terms of the repayment plan have been completed, the debtor can be eligible to have remaining debts discharged.
Will I Lose All of My Property if I File for Chapter 7 Bankruptcy?
No. Illinois recognizes a variety of bankruptcy exemptions, which allow a debtor to retain a variety of types of property and equity in certain types of property. However, all non-exempt assets (assets for which there is no exemption) will be liquidated to repay creditors.
How Quickly Will My Debts be Discharged?
It depends on the type of bankruptcy. In a Chapter 7 case, the case will conclude in a few months, typically. At that point, eligible debts can be discharged. In a Chapter 13 case, it can take up to five years to complete the terms of a repayment plan. It is not until that point that remaining debts can be discharged.
Can Creditors Continue Contacting Me After I File for Bankruptcy?
No. The automatic stay prohibits creditors or debt collectors from taking any action once you have filed a bankruptcy petition.
Contact an Experienced Bankruptcy Attorney in Oak Park
If you have questions about personal bankruptcy, you should know that an experienced and dedicated Oak Park bankruptcy attorney is here to help with your case. Under the present circumstances with the coronavirus emergency, many more Chicago-area residents are considering the possibility of bankruptcy, and our firm can discuss your options with you. Contact the Emerson Law Firm for more information about filing for bankruptcy.
See Related Blog Posts:
Pros and Cons of Chapter 13 Bankruptcy
Bankruptcy and Home Foreclosure: What You Should Know
Can I Choose Between Chapter 7 and Chapter 13 Bankruptcy?
In most situations, the U.S. Bankruptcy Code does not permit a debtor to choose between Chapter 7 and Chapter 13 bankruptcy because each type of bankruptcy has different requirements. In order to qualify for Chapter 7 bankruptcy, you need to prove that your income and assets are low enough that it makes sense to file for a liquidation bankruptcy. Differently, to qualify for Chapter 13 bankruptcy, you need to be able to show that you have a steady income that will allow you to meet the terms of a repayment plan for anywhere from two to five years.
What is a Liquidation Bankruptcy?
Chapter 7 bankruptcy is a type of liquidation bankruptcy. A liquidation bankruptcy is one in which all non-exempt assets owned by a debtor will be liquidated in order to repay creditors.
What is a Reorganization Bankruptcy?
Chapter 13 bankruptcy is a form of reorganization bankruptcy, and this type of bankruptcy is sometimes known as a “wage earner’s” bankruptcy. In this type of bankruptcy, the debtor creates a repayment plan in which she or he will repay a portion of debts over a period of years. Once the terms of the repayment plan have been completed, the debtor can be eligible to have remaining debts discharged.
Will I Lose All of My Property if I File for Chapter 7 Bankruptcy?
No. Illinois recognizes a variety of bankruptcy exemptions, which allow a debtor to retain a variety of types of property and equity in certain types of property. However, all non-exempt assets (assets for which there is no exemption) will be liquidated to repay creditors.
How Quickly Will My Debts be Discharged?
It depends on the type of bankruptcy. In a Chapter 7 case, the case will conclude in a few months, typically. At that point, eligible debts can be discharged. In a Chapter 13 case, it can take up to five years to complete the terms of a repayment plan. It is not until that point that remaining debts can be discharged.
Can Creditors Continue Contacting Me After I File for Bankruptcy?
No. The automatic stay prohibits creditors or debt collectors from taking any action once you have filed a bankruptcy petition.
Contact an Experienced Bankruptcy Attorney in Oak Park
If you have questions about personal bankruptcy, you should know that an experienced and dedicated Oak Park bankruptcy attorney is here to help with your case. Under the present circumstances with the coronavirus emergency, many more Chicago-area residents are considering the possibility of bankruptcy, and our firm can discuss your options with you. Contact the Emerson Law Firm for more information about filing for bankruptcy.
See Related Blog Posts:
Pros and Cons of Chapter 13 Bankruptcy
Bankruptcy and Home Foreclosure: What You Should Know
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