Personal bankruptcy is a difficult process for someone to go through, but many people are scared because they simply do not know what the process is like and how it will affect their lives. Gathering information about bankruptcy and what it would mean for you and your family helps to aleviate some of the uneasiness.
The two types of personal consumer bankruptcies are Chapter 7 bankruptcy and Chapter 13 bankruptcy. In a Chapter 7, the debtors are able to discharge all or part of their debt. In a Chapter 13, debtors agree to a payment plan to repay part of all of their debt.
During a Chapter 7 bankruptcy, you will likely be required to liquidate assets and then turn them over to your creditors first. This includes money in your checking and savings accounts. Some of your assets may be exempt in the bankruptcy process for a Chapter 7-laws vary by state. Generally after you liquidate your non-exempt assets, they are divided between your creditors and the rest of your debt is discharged. However, in the majority of Chapter 7 bankruptcies, most of people’s assets are exempt and therefore do not need to be liquidated.
In a Chapter 13 bankruptcy, individuals organize a payment plan to repay creditors. The individual will submit the plan to the court for approval and began making payments to the trustee, who then pays the creditors.
Bankruptcy is different for each individual, and there are many variables in each case. Please contact our firm for a free consultation.
Benjamin Brand Services- Chicago bankruptcy attorneys .