Oak Park Bankruptcy Attorney
When unexpected crises occur, debt can pile up quickly. After an accident, illness, or divorce, you may find yourself struggling to pay your bills and getting behind on your payments. Bankruptcy can give you the fresh financial start you desperately need. But is it right for you? And if so, which chapter should you file? An experienced Oak Park bankruptcy attorney can help you understand your options.
How Can Bankruptcy Help You?
Bankruptcy is a legal process that allows people with more debt than they can afford to pay to either discharge or reorganize those debts. Advantages of bankruptcy include the following. It can:
- Halt foreclosure
- Stop creditor harassment
- Discharge debt by selling off assets and property in a Chapter 7 bankruptcy
- Reorganize debts to repay over three to five years in a Chapter 13 bankruptcy
Should You File for Bankruptcy?
Before determining which type of bankruptcy to file under, you must first figure out if bankruptcy will even help your situation.
What Debts Do You Have?
Bankruptcy cannot eliminate some types of debt, including child support, alimony, student loans, taxes, and criminal fines. So it’s important to understand which of your debts are dischargeable and which are not. Also, if you have non-exempt property that you want to keep, this will factor heavily into your decision about whether to file Chapter 7 or Chapter 13. To learn more, call an experienced bankruptcy lawyer in Oak Park today.
How Will Bankruptcy Affect Your Credit Score?
An obvious downside to filing bankruptcy is the negative effect on your credit, which could potentially make it harder for you to borrow money or buy a house in the near future. Typically, Chapter 7 will stay on your credit history for about 10 years, while Chapter 13 will stay for around 7 years. That being said, however, there is a good chance that your credit score is in pretty bad shape anyway. Bankruptcy gives you a chance to start rebuilding your credit faster.
If you’re unsure of whether bankruptcy can help your current situation, then contact a knowledgeable Oak Park bankruptcy attorney today.
Chapter 7 vs. Chapter 13: Which Is Best for You?
While Chapter 7 and Chapter 13 both offer a chance to get control of your finances, the methods for achieving that result is different.
The fastest and most common form of bankruptcy, Chapter 7 is your best bet if you hold mostly dischargeable debt and exempt property.
How does Chapter 7 work? Known as a liquidation bankruptcy, Chapter 7 allows people to sell off their property and assets in an effort to repay their creditors.
Qualifying for Chapter 7 requires taking the Means Test. This test examines your income to determine if you make enough to repay your debt. If you don’t, then you will qualify for Chapter 7. One thing to note is that you can only file for Chapter 7 every eight years, so do not file for Chapter 7 if you think you may be back in debt anytime soon.
If you have a lot of non-exempt property and nondischargeable debt, Chapter 13 may be best for you, especially if you wish to keep your assets.
While not nearly as fast as Chapter 7, Chapter 13 is a reorganization bankruptcy that allows you to restructure your debt into a three to five year payment plan. At the end of your plan schedule, any remaining debt is charged.
Qualifying for Chapter 13 requires having a steady income that is enough to make your monthly plan payments. If you cannot maintain your monthly payments, you will need to go back to court to find another debt relief strategy.
Can Bankruptcy Stop Foreclosure?
When you file for bankruptcy, the administrative law judge will issue an “automatic stay.” This court-ordered stay effectively prevents your creditors from collecting on your property and assets. In addition, the stay will also halt any and all harassment from your creditors. Those creditors will need to speak through your attorney if they want to contact you.
Contact an Oak Park Bankruptcy Attorney Today
Mounting debts can cause crushing stress and anxiety. You don’t have to deal with this alone. At Lorraine M. Greenberg & Associates, we want to help you regain control of your finances. Contact a Oak Park bankruptcy attorney today to learn more about your options.