The most commonly utilized types of bankruptcy include Chapter 7 and Chapter 13. Chapter 7 is known as a liquidation bankruptcy. If you choose this type, you’ll forfeit your non-exempt assets, which the trustee will then sell to pay off a portion of your debt. The remainder of your debt is discharged. If you own substantial assets, such as a home, and a regular income, your bankruptcy attorney may advise you to file a petition for Chapter 13 bankruptcy. Also known as debt reorganization, this type of filing restructures debt into a manageable payment plan. Debts that are not paid at the conclusion of the payment plan are discharged.
There are other types of bankruptcy, including Chapter 12, which is appropriate for family farmers. The process of debt discharge under Chapter 12 is much like that of Chapter 13. Businesses most often file under Chapter 11, which enables them to keep some assets while adhering to a debt payment plan. Municipalities may reorganize their debt under Chapter 9.
If you have any questions about what type of bankruptcy might be best for you, contact the veteran bankruptcy attorneys at Cutler & Associates, Ltd. Chicago-area residents can reach our locations in Aurora or Schaumburg at (847) 505-0380.
For the everyday consumer, bankruptcy offers an opportunity to rebuild finances and start fresh. Bankruptcy itself has a long history. In its modern form; however, consumers may choose to file Chapter 7 or Chapter 13 bankruptcy. Your bankruptcy attorney can help you determine which type might be best for you, depending on your assets, income, and debts. If you’ve previously filed for bankruptcy, you’ll need to wait seven years before you can file again.
Learn more about bankruptcy by watching this news clip. This expert explains the evolution of bankruptcy and the differences between Chapter 7 and Chapter 13. You’ll also learn how long a debt discharge will stay on your credit report.
If you need a fresh financial start in life, you can learn more about filing for bankruptcy with help from Cutler & Associates, Ltd. Call our Aurora or Schaumburg office at (847) 505-0380.
When you file a Chapter 13 bankruptcy petition, a bankruptcy trustee will be appointed to your case. Throughout the proceedings, you and your bankruptcy lawyer will work closely with the trustee. The trustee will thoroughly review the petition, your proposed repayment plan, and all other necessary documents to ensure accuracy. The trustee is also responsible for conducting the meeting of creditors and administering your repayment plan. Since the trustee has an integral role in the process, it’s important to understand how to work with him or her.
Understand the Trustee’s Limitations
Your bankruptcy attorney can help you understand the role of the trustee in the proceedings, including what the trustee can and cannot do. For example, if you have a legal question about the process, the trustee is prohibited from answering it. Instead, direct all questions to your bankruptcy lawyer. If you need more information from the trustee in order to comply with a document request; however, the trustee can likely answer you or your lawyer.
Submit Accurate Paperwork
If the trustee detects a discrepancy in your petition and related documents, he or she may raise an objection. It’s important to submit accurate paperwork to ensure the process goes smoothly. Your lawyer can ensure your petition’s accuracy for you.
Disclose All Recent Payments
Before submitting your petition, your bankruptcy attorney is likely to ask you about any recent payments you’ve made to creditors, including family members. The trustee will thoroughly review your payment history and may decide to recover substantial payments. Disclose all payments made to creditors within the past 90 days and disclose all payments made to family members within the past 12 months.
Comply with Document Requests
The trustee may request additional documentation after your lawyer has submitted the petition. It’s important to comply fully with the trustee’s requests. If you do not have access to a particular document, the trustee may be willing to accept a different document that contains the same information.
It’s challenging to handle the bankruptcy process on your own. By working with a bankruptcy lawyer at Cutler & Associates, Ltd., you can rest assured that your petition will be filed accurately. Call (847) 505-0380 to reach one of our convenient locations throughout Chicago, including Schaumburg and Aurora.
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If you’re considering filing for bankruptcy, you may be behind on your mortgage payments, have an excessive burden of credit card debt, or have substantial student loans. Student loans were formerly dischargeable under a bankruptcy filing, until the bankruptcy code was changed in 1976. Subsequent modifications to the code further tightened these restrictions, making it difficult for graduates struggling with student loan debt to find relief. Although student loan debt is not dischargeable under most circumstances, your bankruptcy lawyer may be able to accomplish this for you.
Claiming Undue Hardship
Some graduates can discharge their student loan debt under the undue hardship exception. In other words, you’ll need to prove that repaying these debts would cause undue hardship. Your bankruptcy lawyer may recommend claiming undue hardship if your income is very low. Additionally, those with loans for a for-profit trade school may be more likely to be granted a discharge for student loan debt.
Passing the Test
When it comes to granting a student loan discharge, there are variances among the courts. Many courts rely on the Brunner test. To pass the Brunner test, you’ll need to fulfill three requirements. First, you’ll need to prove that you have made a good faith effort to pay your student loan debts. If the court believes that you took out your student loans without intending to repay them, you will not be granted a discharge. Second, you’ll need to prove that, given your current expenses and income, you cannot make ends meet and support your household if you must pay your student loan debts. And third, you need to prove that your current financial situation is likely to persist for the length of the student loan repayment period. Aside from the Brunner test, other courts may use different criteria to determine eligibility for discharge. Your bankruptcy lawyer can help you understand which criteria may be used for you.
The bankruptcy lawyers at Cutler & Associates, Ltd. understand the many intricacies of the U.S. Bankruptcy Code. To learn how filing for bankruptcy will affect your particular situation, schedule a complimentary consultation with one of our attorneys today. If you live in the Chicago area, you can reach our offices in Schaumburg or Aurora by calling (847) 505-0380 or visiting us online.