Bankruptcy is a legal procedure to assist individuals and families experiencing financial difficulties. In a bankruptcy liquidation or Chapter 7, a filers nonexempt assets are sold and their creditors’ claims are paid with the available proceeds. After proceeds from the sale of assets are exhausted, most claims will be unpaid, however any remaining debt will be discharged (erased) at the conclusion of the Chapter 7 bankruptcy process allowing filers to start anew.
For those who do not qualify for Chapter 7 bankruptcy, a reorganization or Chapter 13 bankruptcy, is a repayment plan approved by the court which provides for partial payment of debt over time. A Chapter 13 lasts anywhere from 2 to 5 years, where a filer will make affordable payments toward their debt, with any remaining balance forgiven at the conclusion of the bankruptcy. Chapter 13 is available to small businesses operated by sole proprietors or individuals with regular income who qualify. Distinct advantages of Chapter 13 include not having to give up current assets and property to pay debts.
End Creditor Harassment
To the relief of filers who are often subject to non-stop harassment by collectors, bankruptcy offers a number of protections:
- New lawsuits against those owing debt may not be filed and pending lawsuits are put on hold
- Creditors must stop attempting to collect the debt
- Collections on liens are typically stopped
Contact an Experienced Peoria Bankruptcy Lawyer for Help
Bankruptcy is one of many strategies to consider if you are in a difficult financial situation. The best place to start is by discussing your unique situation with an experienced bankruptcy attorney who can provide you with information to decide if bankruptcy is a good strategy to solve your financial difficulties. For individuals and families needing a fresh financial start, contact Charles E. Covey for help today at 309-674-8125.