The Difference Between A Chapter 13 & 7 Bankruptcy Filing In Carbondale, IL

In life your taught that if you work hard and keep a budget, you’ll be able to pay all of your bills and live well. However, for some people certain circumstances in life can make this dream unreachable. Expensive medical bills or the loss of income can make the tasks of paying bills extremely difficult. Over time, what was once a simple challenge has turned into a financial disaster that seems too difficult to work through. Fortunately, there are avenues for people who find themselves in these sort of situations, they are Chapter 13 Bankruptcy in Carbondale, IL and Chapter 7 Bankruptcy in Carbondale, IL.

Chapter 13 Bankruptcy

A chapter 13 bankruptcy filing uses the income of the filing party to pay for a portion or all of the debt that is owed to their creditors. With this option a payment schedule is established that generally ranges between 3 years and 5 years. In order to ensure that the payment schedule is fair to both the creditors and the debtor, the court assist in establishing a repayment plan. Once the end of the schedule has been reached, provided the proper payments were made throughout, the debt of that individual is resolved. For many people that file bankruptcy this is a preferred method because of the fact that it allows you to retain your property. During the bankruptcy process you get to keep your home, car or any other property that you may own.

Chapter 7 Bankruptcy

A chapter 7 bankruptcy filing is another option for individuals who have an excessive amount of debt. Unlike a chapter 13 filing, with this option all of your debt is canceled without a single payment from you. However, you are generally required to liquidate your assets, so any property that you own will likely be liquidated as well. In order to qualify for this type of bankruptcy the courts will require a “screening” process. During this time you are required to provide all of your financial data, in order for the courts to determine that you in fact can not pay off the debts, or even a portion of the debts. The entire process takes between 3 and 6 months and it can be difficult to file this method more than once.

A chapter 7 bankruptcy filing in Carbondale, IL is another option for individuals who have an excessive amount of debt. Unlike a chapter 13 filing, with this option all of your debt is canceled without a single payment from you.