Chapter 7 bankruptcy is what many think of as wiping the slate clean and getting a fresh start. This type of bankruptcy is a liquidation bankruptcy designed to erase general unsecured debts such as credit cards and medical bills. In order to qualify for Chapter 7, you must have little or no disposable income. When you file, a trustee is appointed to administer your case to review your bankruptcy papers, supporting documents, and to arrange the sell of your nonexempt property to pay back your creditors. If you don’t have any nonexempt assets, your creditors receive nothing.
Chapter 13 is a reorganization bankruptcy designed for debtors with regular income who can pay back at least a portion of their debts through a repayment plan. If you make too much money to qualify for Chapter 7 bankruptcy, you may have no choice but to file a Chapter 13. Many debtors prefer to file for Chapter 13 bankruptcy because it offers many benefits that Chapter 7 bankruptcy does not such as an opportunity to catch up on mortgage payments or car payments and non-dischargeable debts such as child support or student loans.
If you have questions regarding Illinois bankruptcy, contact the Law Offices of Charles Covey for help. For more than 30 years, Charles has been helping clients struggling with difficult debt challenges, helping them to move forward.
