It really is terribly stressful for families that have been struggling with debt and past due bills to arrive at the understanding that they might be in a financial condition which ıs not going to simply fix itself. While this type of situation can seem quite hopeless, there is a way out that the law offers that will help individuals get out from underneath the burden connected with overwhelming debt. In my Chicago bankruptcy law office, I help families to determine whether the choice to seek bankruptcy relief is appropriate considering their particular problems.
Some individuals think that changes to the bankruptcy law that were handed down in the year 2005 have made it almost impossible for individuals to meet the criteria for debt elimination with the aid of consumer bankruptcy. Even though the 2005 law, the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, has made it more difficult, the reality is that most consumers who need to file for consumer bankruptcy can continue to do so.
So exactly what is bankruptcy? Basically, bankruptcy can be described as a legal proceeding that enables those with more debt than they can repay to start over – financially speaking. This is the reason why bankruptcy is known as a “fresh financial start.” Once you file for bankruptcy, lenders are required to immediately stop trying to collect payment for the debts that you owe. Depending on the bankruptcy chapter somebody files under, virtually all unsecured debt can be wiped away – doing away with the responsibility to repay them. Unsecured debts are the type without collateral, for example credit cards. Secured debts, such as auto loans and home mortgages, must still be repaid if the debtor wants to maintain the property. But if they are behind on monthly payments, filing for bankruptcy can stop a repossession or foreclosure by enabling the past due amount to be paid back over time while the regular payments continue.
Though there are various local rules and state laws that come into play in bankruptcy proceedings, the main source of bankruptcy law is Title 11 of the U.S. Code. Since bankruptcy is federal law, bankruptcy cases are filed in the federal court for the district where the debtor resides. By way of example, since I am a Chicago bankruptcy lawyer serving Chicago area residents, my clients’ cases are filed in the United States Bankruptcy Court for the Northern District of Illinois.
You will find four different varieties of bankruptcy cases under Title 11: Chapter 7, Chapter 11, Chapter 12, and Chapter 13. Of these 4, Chapter 7 and Chapter 13 are the most typical and most beneficial to individuals. Chapter 7 is called straight bankruptcy or a liquidation and requires people to give up property to pay off their creditors. Due to the many state and federal exemptions that provide protection to certain property from liquidation, almost all people who declare Chapter 7 bankruptcy never lose any property at all.
Chapter 13 is often called a reorganization. Chapter 13 lets families to repay all or some part of their debt over time employing future income. No property is liquidated under a Chapter 13.
While this overview provides a basic overview, it’s not legal advice. Consumer bankruptcy law is complicated and individuals contemplating bankruptcy really should consult with legal counsel within their jurisdiction. Should you reside in Illinois and are seeking a Chicago Bankruptcy Attorney, remember to consider The Law Office of John C. Kunes, P.C.
Learn more about Chicago Bankruptcy. Stop by Chicago Bankruptcy Lawyer John Kunes’s site where you can find out all about Chapter 7 and Chapter 13 bankruptcy and what bankruptcy could do for you.
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Tags: Bankruptcy, chapter 13, chapter 7, Consumer Bankruptcy, family, legal, personal finance