With the number of Covid-19 cases plummeting across the country, many are looking forward to getting back to normal hoping to recover financially following a year of closures and limited employment.
When trying to tackle debt, many may consider Chapter 7 bankruptcy protection to either discharge unsecured debt such as credit cards, medical bills and personal loans, or, some may opt for Chapter 13 bankruptcy, which can provide a way out of debt through a structured repayment plan.
To qualify for a Chapter 7 filers must first pass a means test to assess an applicant’s debt to income ratio. With a few exemptions such as a car or equity in a home, most property will be sold to pay back as much of the debt as possible before discharging the remainder. The benefit of Chapter 7 bankruptcy is that those who qualify are able to get a relative clean slate to start anew. Although Chapter 7 will be included in a history report for up to a decade, debtors are often able to build good credit in a number of years.
Filers who have a regular income and more assets but have fallen behind because of various circumstances may not qualify for Chapter 7 but may be able to file for a Chapter 13 bankruptcy that allows a filer to retain more of their assets while making affordable payments against what they owe creditors. After a period of 3 to 5 years, most remaining debt will be discharged. Although, again, the bankruptcy will be reported on a credit history, the fact that actions are taken to resolve financial difficulties is a step in the right direction for improving a credit score.
When you are considering personal bankruptcy protection following one of the worst economic years in U.S. history, you are not alone. Bankruptcy is your right and is intended as a strategy to help Americans regain their financial footing after the unexpected strikes. If you have questions regarding Illinois bankruptcy protection, contact Peoria bankruptcy lawyer Charles E. Covey for help today at 309-674-8125.
