Different Types of Bankruptcy

Going through bankruptcy can be a difficult time in anybody’s life. People are bound to have a lot of questions regarding their future. This can be a scary time for someone so it is important to keep a clear head and turn to the services of someone that can be of assistance. A Chicago bankruptcy lawyer is the best solution to this problem. He is capable of answering any questions his clients might have regarding their situation and he can also advise them through the entire process regarding their best course of action to take.

Chapter 13 Bankruptcy

Most people that never had to deal with this situation do not know that there are actually several types of bankruptcy. All of them occur when a person is over his head in debts and cannot afford to pay them anymore. Filing for Chapter 13 bankruptcy is also known as debt adjustment. It is mostly considered as a temporary solution for people that are falling behind on their payments and they know that they will not be able to catch up anytime soon. People who file for Chapter 13 will have all collection processes and foreclosures halted for the time being and the person will be given some time to draft a payment plan which he can stick to for the next three to five years. However, that person should always consult with a Chicago bankruptcy lawyer beforehand, as each state has different laws regarding the details of each individual situation.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy occurs when the filer is way over his head in debt and has no way of paying it back. He also has few or no assets which he will have to give up in exchange for their debt being discharged. However, even in this instance filers might be allowed to keep their house, their transportation and even a portion of their savings. It all depends on the state they live in and its current bankruptcy laws. Again, people in Illinois should always ask a Chicago bankruptcy attorney what they should do before they make any decisions.

“Chapter 20” Bankruptcy

While there is no such thing as Chapter 20 bankruptcy, it refers to rare cases where people have to file for Chapter 7 and then Chapter 13 bankruptcy. A Chicago bankruptcy lawyer can ensure that you won’t need to ever do this.