Chapter 7 and Chapter 13 are the two most common types of bankruptcy that people use. Your bankruptcy lawyer needs to discuss all bankruptcy options with you and help you determine which one is right for you. It is quite likely that your circumstances will dictate which one you can do. In general, these are the benefits of each kind of bankruptcy:
- Its faster. From the time you file until the case is over is typically only a few months, unlike a Chapter 7 which is a matter of years
- Credit cards, medical bills, and most other unsecured debt are completely eliminated- goodbye!
- The legal fees are generally less than they are in a Chapter 13
- Creditors can’t try to collect from while the case is pending.
- If you have something secured by collateral (like a car or a house), you have a chance to get caught up on the payments over time and keep the property. This is especially helpful for people whose homes have gone into foreclosure and who have since re-gained the ability to start paying the mortgage again.
- If the bankruptcy court approves your plan to repay your creditors, the creditors are stuck with it.
- You have 3-5 years to catch up
- You usually don’t have to pay 100% of your debt, often times paying only a percentage of what you’d pay outside of bankruptcy
- Payments are between you and the bankruptcy trustee; keeping the creditors out of your hair with no direct contact.
Bankruptcy laws are complex but with a good lawyer who understands them, it can be surprisingly easy for those looking to get out of debt once and for all. Give us a call at 630-250-8813 to set up a confidential, no cost consultation to review your options either by phone or at our Schaumburg or Itasca office.