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 Flora, Illinois will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Flora, Illinois
In Flora, 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 the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some forms of debt, however, can't be absolved in Chapter 7 Bankruptcy in Flora, Illinois. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Flora, Illinois
Chapter 13 bankruptcy in Flora, 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 Flora, Illinois
Which Bankruptcy type to file under depends strongly on the facts of each particular case. If you have a stable stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a stable income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
Whatever your situation, you should speak with a local Flora, Illinois bankruptcy lawyer. Your attorney will be able to advise you of your options and their likely outcomes, which will help you make a more educated decision.