Is Liquidation Bankruptcy Right for Me?

Struggling with debt is one of the most stressful experiences in a person’s life, and it can be difficult to know what options may be available to you. If you are unable to pay your bills and debts are piling up, you might be considering consumer bankruptcy. If so, you might know that there are different types of personal bankruptcy and that individuals most often file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. These are very different types of bankruptcy, so it is important to understand the differences. Chapter 13 bankruptcy is a kind of reorganization bankruptcy that is commonly known as a wage earner’s plan, while Chapter 7 bankruptcy is a kind of liquidation bankruptcy. Is liquidation bankruptcy right for you?

Before you make any decisions about filing for bankruptcy, you should discuss your specific circumstances with a bankruptcy lawyer in Oak Park. In the meantime, if you are wondering if liquidation bankruptcy is right for you, consider the following questions.

Do You Qualify for Chapter 7 Bankruptcy?

When you are thinking about liquidation bankruptcy as an individual, the first question you need to consider is: do I qualify for Chapter 7 bankruptcy? It is important to know that the eligibility requirements for Chapter 7 bankruptcy differ between businesses and individuals. For an individual to be eligible for Chapter 7 bankruptcy according to U.S. bankruptcy law, that person will usually need to pass the “means test.” This test is designed to show that the individual’s assets and income are low enough for liquidation bankruptcy to make sense. A bankruptcy lawyer can assess your current financial circumstances to help you understand whether you are likely to be eligible for Chapter 7 bankruptcy.

Are Your Debts (Mostly) Dischargeable?

Many types of consumer debts are dischargeable, but some are not. Before you decide whether liquidation bankruptcy is right for you, it will be critical to determine whether the liquidation of your non-exempt assets will result in a discharge of all (or at least most) of your existing debts. If your debts are non-dischargeable, you will not want to go through the process of having non-exempt assets liquidated.

Are Your Most Important Assets Exempt?

Finally, are your most important assets exempt? All non-exempt assets will be liquidated in a Chapter 7 bankruptcy. Accordingly, you will want to discuss the Illinois bankruptcy exemptions with an attorney to ensure that the property you most want (and need) to keep will be exempt and not subject to liquidation. If you are not eligible to exempt assets that are particularly important to you, a liquidation bankruptcy may not be the best option. However, if you can exempt those assets, then you will be able to keep that property while other non-exempt property is liquidated so that you can receive a discharge of your debts.

Contact an Oak Park Bankruptcy Attorney

When you are considering Chapter 7 bankruptcy or have questions about liquidation bankruptcy in Illinois, it is important to speak with an experienced Oak Park bankruptcy lawyer about your case. Our firm can assist you with all aspects of your consumer bankruptcy case, and we can answer any questions you have today. Contact the Emerson Law Firm for more information about the bankruptcy services we provide.


See Related Blog Posts:

What Property Can I Keep if I File for Chapter 7 Bankruptcy?

Is Now the Right Time to File for Consumer Bankruptcy?

Comments

Post a Comment

Popular posts from this blog

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more