Types of Bankruptcy Protection
The two most common types of bankruptcy are Chapter 7 and
Chapter 13. These are different in a number of ways and are more beneficial to different types of debtors, as they have particular advantages. By talking to a bankruptcy attorney about your particular financial situation, you have the opportunity to find out more about which type of bankruptcy you may qualify for, as well as which type will be more beneficial to your unique circumstances. At the Law Offices of Joseph P. Doyle we offer a free initial consultation to help you get started. We represent clients throughout Chicago and the surrounding areas in Illinois, including Kane County, Will County and DuPage County.
Which Type of Bankruptcy is Right for You?
While the best way to determine whether you qualify under Chapter 7 or 13 and decide which option is better for you is to talk to a lawyer, here is some basic information about these types of bankruptcy:
- Chapter 7 bankruptcy is most often beneficial to individuals with low incomes and little property that would need protection from liquidation. A person who has little to no money left over after basic monthly expenses would likely be a good candidate for a Chapter 7 case.
- Chapter 13 is often an option for individuals with higher incomes and who have real property and other assets they need to protect. An individual who has a regular income and can pay basic living expenses but is facing overwhelming debt or foreclosure may qualify for a Chapter 13 bankruptcy.
A Chapter 7 bankruptcy may be referred to as “ liquidation” and entails a debtor surrendering nonexempt assets to the bankruptcy trustee in order to be sold and the proceeds used to pay creditors. A Chapter 13 case may be referred to as a “reorganization” or “wage earners plan.” In these cases, the debtor works out a payment plan to pay a portion of eligible debts over a period of three to five years. Either way, the outcome is a discharge of all eligible debt at the successful conclusion of the case.
If you would like to know more about the types of bankruptcy and their specific benefits, contact our firm
for a free consultation.