Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential long-term consequences. This warrants careful consideration of the costs and benefits. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Illinois are often the identical as everywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Metropolis, Illinois bankruptcy attorney beforehand.

Chapter 7 Bankruptcy in Metropolis, Illinois

In Metropolis, Illinois, there are 2 commonly-used types of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.

Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some forms of debt, however, can't be excused in Chapter 7 Bankruptcy in Metropolis, Illinois. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 may not be the best choice for you.

Chapter 13 Bankruptcy in Metropolis, Illinois

Chapter 13 bankruptcy in Metropolis, Illinois is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 Bankruptcy involves a court setting up a revised payment plan, which allows the debtor to pay off most or all of his debts over an extended period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Metropolis, Illinois

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct situation. If you have a stable income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a stable income, and most of your property is exempt, Chapter 7 might be a better way to go.

In any case, it would be a good idea to consult a local bankruptcy lawyer in Metropolis, Illinois. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).