Bankruptcy Lawyer Peoria, IL
Bankruptcy Lawyer in Peoria, IL
Any bankruptcy lawyer in Peoria, IL should know the difference between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy, including our experienced bankruptcy lawyers at Pioletti, Pioletti & Nichols. Debt can become overwhelming in a short time. Bill collectors may be calling all the time. Notices threatening court action may arrive daily.
What can someone do who is unable to repay these debts? Bankruptcy is a way for someone to get out from under the crush of debt and start over from scratch. There are a couple of popular proceeding types for individuals looking for relief. Chapter 7 and Chapter 13 bankruptcy can help but work in different ways. Discover the key differences in these two bankruptcy types before proceeding.
Chapter 7 Is About Liquidating Debt
Some people who own substantial assets may find themselves going through Chapter 7 bankruptcy. This type of process involves a court-appointed trustee going through assets and deciding what can be liquidated. Everything is considered, including personal items of value, such as jewelry and motor vehicles, homes and investment property and bank accounts. However, there are exemptions or items that a trustee cannot liquidate without the owner’s permission. These usually include the primary residence and a vehicle, among other things. Each state has a comprehensive list of exemptions. A Peoria, Illinois bankruptcy lawyer from Pioletti, Pioletti & Nichols can help you figure out which exemptions apply to your situation.
Chapter 13 Involves Restructuring Debt
There may not be enough value in assets to pay off a significant part of the debt. In this case, Chapter 13 may be the better route for relief. The court-appointed trustee goes through the debts and negotiates the balances down. Then, a payment plan is established through the court based on the debtor’s income. The payments must be made according to schedule and usually continue from three to five years.
Discharge of Debt by the Judge
Once the terms of any liquidation or payment plan are fulfilled, the creditor returns to court. The judge will confer with the trustee and decide whether any further action is required. There will likely be debt remaining in some forth. This is usually unsecured or credit card debt. These are the last-paid debts as they do not have collateral that can be returned for credit. After the terms of the bankruptcy are complete, the judge will likely discharge the remaining debt. If a person goes the Chapter 7 route, this happens quicker than those making payments under Chapter 13. However, those under Chapter 7 have likely lost assets in the process that those in Chapter 13 have not.
When contemplating which type of bankruptcy is better, consult with a bankruptcy lawyer for advice. We understand that struggling with unmanageable debt can be tiresome, confusing, and overwhelming. Our lawyers can help you start over with a clean slate through debt elimination. Pioletti, Pioletti & Nichols’ bankruptcy lawyers in Peoria, IL have the know-how and experience to help decide whether Chapter 7 or 13 will provide greater relief.