Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is normally considered as an option of last resort, because while it can stave off financial disaster, it has some considerable long-term consequences warranting careful consideration of the costs and benefits. Since it's a creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Illinois will be the same as everywhere else in the country. Particular courts in Coal Valley, Illinois will have some unique rules, however, so you should consult with a local lawyer before you file.

Chapter 7 Bankruptcy in Coal Valley, Illinois

In Coal Valley, Illinois, there are 2 common types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and basic personal items, like clothing. These assets are not available to creditors.

Once qualified assets are sold, and the money turned over to the creditors, most remaining debt is absolved. However, there are certain types of debt that cannot be absolved in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Coal Valley, Illinois.

Chapter 13 Bankruptcy in Coal Valley, Illinois

Chapter 13 bankruptcy in Coal Valley, Illinois is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 does not excuse any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.

Which Type of Consumer Bankruptcy Should I File in Coal Valley, Illinois

This depends entirely on the facts of your individual case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.

Of course, you should always seek the counsel of an accomplished local Coal Valley, Illinois bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your individual situation.