Chapter 13 Consumer Bankruptcy
One particular question that a majority of clients thinking of filing for bankruptcy in Chicago generally would like to ask a Chicago bankruptcy attorney is: ”So what’s the distinction between Chapter Thirteen and Chapter Seven?” Whereas Chapter 7 bankruptcy is basically ”liquidation” — the use of your present possessions to pay back your creditors, Chapter Thirteen was established to offer you a chance to reorganize your fiscal position in a process which will allow you to pay for some or all of your financial obligations while using the money you earn in the future. Though quite a few assets remain safeguarded from being sold pay back creditors in Chapter 7 bankruptcy, if ever the value of your interest in any property exceeds the federal or state exemption amount, that property can be liquidated with the profits applied towards your financial obligations.
Possessions are not liquidated in a Chapter 13 bankruptcy. Rather, you’ll be able to keep and still make use of all your assets regardless of if it is protected with an exemption. Your obligations are paid for via a bankruptcy plan that has been accepted by the court. When you complete the plan, you obtain a discharge like the discharge in a Chapter 7.
There are exceptions to your Chapter 13 discharge. For example, longer term financial obligations with last installments due subsequently after the plan is concluded which are ”cured” in the plan are not discharged. Specified tax debts aren’t discharged. Neither are any debts incurred by means of fraud, those not listed in the bankruptcy, most student loans, or drunk driving debts along with criminal penalties or civil penalties.
Even if a discharge couldn’t end up being granted in your specific circumstances, there are instances when it could be in your best interest in any event. Whether or not a discharge is not available under Chapter 13, if you’re behind on your house loan and at risk of losing your house to the mortgage lender, Chapter 13 Bankruptcy can help you to avoid a foreclosure and get caught up on your mortgage payments over the course of plan.
A lot of people today believe that in the event that they have to file for bankruptcy that they will lose every little thing they’ve got. This, however, is not the truth. While both Chapter 7 and Chapter 13 have their own advantages,Chapter 13 bankruptcy is most often the preferred chapter for those wishing to save their homes from foreclosure.
Chicago bankruptcy lawyer, and author of Chicagoland Bankruptcy Help, John Kunes works hard to be the bankruptcy lawyer Chicago can depend on.
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