Chicago Chapter 7 Bankruptcy Lawyer
Many people who are considering filing for bankruptcy may not realize that there are actually two primary forms of bankruptcy filings for individuals and families seeking protection under the U.S. bankruptcy law. Chapter 7 is the form that the majority of people hope to file.
Chapter 7 vs. Chapter 13 Bankruptcy
For those who qualify, Chapter 7 bankruptcy allows the elimination of nearly all secured and unsecured consumer debt. This includes credit card debt and loans for personal property such as a boat. It does not mean that the filer is entitled to keep the property purchased with the debt. The bank may repossess a boat, car, furniture or other personal property, at their discretion. It also does not mean that the filer must include all debt for elimination. All debt and income must be reported, but the filer is permitted to keep certain debt by 'reaffirming' their agreement to continue timely payments for the loan. This is the primary way many filers are able to keep their house and car after eliminating all other debt.
Under Chapter 13 bankruptcy, the filer does not seek to eliminate debt. All debt is incorporated into a three- or five-year repayment plan to be supervised by the bankruptcy trustee. Although the filer will still be responsible for repayment, reduced interest, penalties and fees often mean the repayment will be many thousands of dollars less than individual monthly payments to creditors would be.
Advantages of Chapter 7
Under Chapter 7, individuals and families enjoy the possibility of completely eliminating all or as much of their consumer debt they want, to get the fresh start they need. Chapter 7 allows the filer to eliminate debt such as:
- All credit card debt that is not subject to disqualification because of recent and dubious purchases prior to filing
- Secured loans for property such as boats, motor vehicles, vacation property and other real estate
- Medical bills
- Tax arrears, after certain criteria for age-of-debt has been met
- Debt for judgments and collections actions against you, subject to the decision of the bankruptcy court
- Past due rent owed, following an eviction
- Termination of a lease or contract
The Advantage of Keeping What You Want to Keep
In many cases, it is possible to keep your house and car, as long as you are willing to maintain the monthly payments. Special qualification rules apply regarding equity in the property, however, and no assumptions should be made that you can eliminate your other debt without the disadvantage of losing your home or vehicle. If you qualify to reaffirm your intent to keep your mortgage and car payment, your improved cash flow after dismissing all other debt typically makes it far easier to do so.
In most cases, the dismissed debt will mean an improved monthly cash flow, making it possible to meet monthly payments on the mortgage and car loan.
To learn more about the advantages of Chapter 7 bankruptcy and to determine whether you meet eligibility requirements under the new bankruptcy means test, talk to attorney Chad Hayward at the Law Offices of Chad M. Hayward P.C. today.
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If you are ready for a fresh start, we are ready to help. Illinois bankruptcy attorney Chad Hayward represents clients in the Chicago metro region and communities throughout Illinois.
Reach us to schedule an appointment at any one of our local community offices by calling 312-546-4689 or toll free 888-804-8641.
Chicago
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You can also contact us by e-mail with a brief description of your legal problem. We look forward to helping your family get the fresh start from debt you need and deserve.
