Chapter 7 Bankruptcy

Chapter 7 Bankruptcy

Over the years, the economy has caused people to go into debt. Medical expenses, housing costs, and car repairs are all steadily increasing and putting pressure on the average American. Debt can creep up on a person. A couple of expenses here and there can add up and before you know it, your credit cards are maxed out. You may owe tens of thousands of dollars. You may not be able to dig out of the hole. As a last resort, people file for bankruptcy. If you are considering it, you are not alone. In 2017, just under 800,000 Americans filed for bankruptcy.  Turn to the dedicated Illinois Chapter 7 bankruptcy lawyers at Forst Law Offices, we have helped many people ease their financial strains.

Deciding to File for Chapter 7

There are two main types of bankruptcy for individuals. Many people prefer to file for Chapter 7 bankruptcy because it discharges almost all debts. You will not have to pay back any of the debt. However, your assets will be sold to help pay off these debts. This means that you will likely lose your home, cars, and anything else of value. If you really want to hold onto your possessions, filing for Chapter 13 is the better option. However, there is a trade-off. You will be forced to repay the debt, which may be difficult if you do not have regular income.

However, if you are a renter who really has no assets anyway, then Chapter 7 is a good choice to start over financially. While your credit will suffer for a few years, your credit score will slowly climb back up. Once you can show that you are responsible with money, you may be approved for credit cards and loans after a few years.

Chapter 7 bankruptcy requires a means test. This is based on a person’s debt and income. If a person has enough income to repay the debt, then he or she will likely be ordered to file for Chapter 13 bankruptcy instead. Unlike a Chapter 13 bankruptcy, no repayment plan is needed. The debt will be wiped out, and the debtor does not need to repay it.

Also, there are no limits on debt in a Chapter 7, unlike in a Chapter 13 bankruptcy. The debts are typically wiped out rather quickly—usually within 90 days or so. During this time, the court owns your assets. You can not do anything with them during this time. However, once your debts have been paid off, your income and assets are yours. Any income or assets that the person receives after filing for Chapter 7 bankruptcy will be theirs to keep. It will not go into the bankruptcy estate, except for inheritances or death benefits.

Get Help From an Illinois Chapter 7 Bankruptcy Lawyer Today

If you are having issues with income and debt repayment, Chapter 7 bankruptcy can give you a clean state. It allows you to start over financially, which can lift a heavy burden.

Bankruptcy should not be taken lightly, though. Learn about the pros and cons from Illinois bankruptcy lawyer Richard J. Forst from Forst Law Offices. He can find the right solution for you. To schedule a consultation, call his Orland Hills office at (708) 873-1623 or fill out the online form.

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