Bankruptcy is a legal procedure allowing a person or business to have their debts absolved, in part or in whole. It is normally treated as a last resort, because, while it can prevent financial catastrophe, it has some huge long-term consequences. This warrants careful consideration of the costs and benefits. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Illinois are often the same as anywhere 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 Midlothian, Illinois bankruptcy Lawyer beforehand.
Chapter 7 Bankruptcy in Midlothian, Illinois
In Midlothian, Illinois, there are 2 commonly-used forms 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 absolved. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Midlothian, Illinois. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Midlothian, Illinois
Chapter 13 bankruptcy in Midlothian, 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 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over a prolonged 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 Midlothian, Illinois
Chapter 13 is normally a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.
In any case, you should talk with a local Midlothian, Illinois bankruptcy Attorney. Your Attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.