Last updated 20 hours ago
If you are facing repossession of your home, car, or other property, you may have an option for stopping the proceedings: bankruptcy. To learn how each type of
bankruptcy can stop foreclosure or repossession proceedings, read on.
Chapter 13 Bankruptcy
Chapter 13 is a way for bankruptcy filers with a steady income to repay a portion of their debts over several years. When a bankruptcy petition is filed, it triggers the automatic stay, which prevents all creditors from taking any action to collect on debts. This includes property repossession and foreclosure proceedings. While the bankruptcy is in process, your property will be safe. A Chapter 13 payment plan will make arrangements for you to catch up on past payments on your home or car and continue to make those payments, eliminating the need for foreclosure or
repossession. Chapter 7 Bankruptcy
Like Chapter 13, Chapter 7 contains the automatic stay provision that stops collection during the bankruptcy process. Unlike Chapter 13, however, Chapter 7 bankruptcy serves as a way to liquidate valuable personal property in order to pay debts like medical bills and personal loans, which will be discharged. Debts tied to property, like cars and homes, are usually also discharged, meaning that the filer is released from responsibility for paying them; in return, the filer must forfeit these items of property. In some cases, a filer may opt to speak to his lender regarding reaffirming these loans and continuing to pay them, allowing him to keep the property. Now that other debts have been discharged, he may have the income to make payments on property that was once scheduled for repossession or foreclosure.
Cutler & Associates in Illinois is a law firm that has focused on bankruptcy since 1990. Call us today at (847) 849-1834 to get a FREE Bankruptcy Evaluation.
Disclaimer:
The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.
Last updated 6 days ago
If you have a steady income but are faced with overwhelming debt,
Chapter 13 bankruptcy may be a way to repay your creditors. Find out more from this video.
Under Chapter 13, you pay some of your income to a bankruptcy trustee, who distributes it among your creditors. This payment plan lasts three to five years, giving you time to make up your debts. Chapter 13 is often preferred by those with large assets because, unlike Chapter 7, it does not require you to liquidate property in order to pay debts.
Cutler & Associates in Illinois is a law firm that has focused on bankruptcy since 1990. Call us today at (847) 849-1834 to get a FREE Bankruptcy Evaluation.
Last updated 7 days ago
In
bankruptcy proceedings, a distinction is drawn between secured debt and unsecured debt, and they are dealt with very differently. Read on to learn more about how these types of debts are defined.
What are secured and unsecured debts?
Secured debt consists of loans tied to property, like home and car loans. If a debtor cannot meet these obligations, the lender has the option of repossessing the property to pay the debt. Unsecured debt, on the other hand, is not tied to property and consists of things like credit card debt, medical bills, student loans, and unpaid child support and alimony. If a debtor cannot pay his unsecured debts, lenders may send the accounts to a collections agency, which will attempt to persuade the debtor to pay these debts. Lenders may also sue debtors or garnish their wages.
How are these types of debt dealt with in Chapter 7 bankruptcy?
Chapter 7 bankruptcy deals with unsecured debt by liquidating a filer’s valuable property and using the proceeds to pay as much of these debts as possible. After bankruptcy proceedings are complete, these debts are discharged and the debtor is no longer responsible for them. Secured debts can also be discharged, but the debtor will lose the property they are tied to. Alternatively, a debtor can opt to reaffirm the debt and continue to pay it, allowing him to keep the property.
How are these debts dealt with in Chapter 13 bankruptcy?
Chapter 13 establishes a payment plan that allows bankruptcy filers to pay off a portion of his unsecured debts over a period of three to five years. After this point, any remaining unsecured debts will be discharged. As part of that same payment plan, filers become current with any payments they missed on secured debts, and they can hold on to those properties.
Cutler & Associates in Illinois is a law firm that has focused on bankruptcy since 1990. Call us today at (847) 849-1834 to get a FREE Bankruptcy Evaluation.
Disclaimer:
The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.
Last updated 13 days ago
If you’re curious about bankruptcy or if you think it might be the right financial choice for you, take a look at the resources listed here to find out more great information. Before filing a bankruptcy petition, however, contact an experienced bankruptcy attorney at Cutler and Associates, Ltd.
- The United States Bankruptcy Courts of the Northern District of Iowa outlines some of the most common reasons that bankruptcy petitions are dismissed.
- Student loans cannot presently be discharged in bankruptcy, but some members of Congress want to change that. Read more in this article.
- The automatic stay is one of the most important provisions of both types of consumer bankruptcy.
- Learn more about how Chapter 13 bankruptcy can stop foreclosure.
- This article from Investopedia.com discusses how the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has affected bankruptcy filings.
You can reach our office at (847) 849-1834 to schedule a free consultation in one of our
Chicagoland offices.
