Orland Park Bankruptcy Attorney
Life is full of unexpected crises that can leave you struggling to pay the bills. After a sudden illness, accident, job loss, you may find yourself crushed under a pile of mounting debt, with seemingly no way out. Bankruptcy can help. Not only does it provide valuable protections from creditors, but it also gives you room to breathe while you figure out your next steps. But the decision to file is a weighty one. Is bankruptcy right for your situation? And if so, should you file under Chapter 7 or Chapter 13? An Orland Park bankruptcy attorney can help you weigh your options.
What Are the Benefits of Bankruptcy?
Bankruptcy is a legal process that allows individuals or businesses who hold more debt than they can pay to effectively discharge or reorganize those debts. Other advantages of bankruptcy may include:
- Delay foreclosure actions
- Stop debt collector harassment
- Stop wage garnishment
- Debt discharge through Chapter 7
- Debt reorganization through Chapter 13
Chapter 7 allows you to eliminate your unsecured debt by selling off your non-exempt property and assets to repay creditors. The process is relatively fast — typically completing within four to six months.
In order to qualify, you must pass the means test. The test calculates your income as well as the amount of debt you owe in order to determine whether your disposable income is enough to repay your debts. If you do not have enough disposable income, you will be eligible to file Chapter 7.
This chapter is a good option for those who have a lot of dischargeable debt and exempt property. In addition, since you can only file Chapter 7 once every eight years, it may not be the best option for you if you believe you may be in debt again soon.
For the most part, if you do not qualify for Chapter 7, you may still be able to qualify for Chapter 13. While not as fast as Chapter 7, Chapter 13 allows people to reorganize their debt into an affordable payment plan. You pay back your creditors over a period of about three to five years. And after your payment plan ends, any remaining debt is discharged.
In order to qualify, you must show the bankruptcy court that you have a stable income that is enough to meet your regular plan payments. If you can no longer keep up with your payments, you will have go back to court to figure out a new debt relief strategy.
This chapter is a good option for those who have a lot of nondischargeable debt and own non-exempt property that they would like to keep.
Is Filing Bankruptcy Right for You?
While there are many benefits to filing for bankruptcy, it’s important to understand exactly what you are getting into. A knowledgeable Orland Park bankruptcy attorney can help you understand the pros and cons involved.
What Types of Debt Can Bankruptcy Eliminate?
Bankruptcy can only eliminate dischargeable debt, such as credit card debt, medical bills, and personal loans. Unfortunately, bankruptcy cannot eliminate nondischargeable debt, such as child support, alimony, taxes, student loans and criminal fines.
What Is the Impact on Your Credit Score?
The most glaring downside to bankruptcy is the negative impact it will most likely have on your credit score. This could make it much harder to buy a house or borrow money in the immediate future. For the most part, filing for Chapter 7 will remain on your credit history for ten years, while Chapter 13 will remain for seven years.
That said, however, chances are that if you are considering bankruptcy, your credit score is already in bad shape. Filing for bankruptcy may give you a chance to start over and rebuild your credit much faster.
Can Bankruptcy Halt Foreclosure?
As soon as you file for bankruptcy, the court will issue an “automatic stay.” This order will stop any of your creditors from seizing your assets and property. In addition to putting a stop to debt collector actions, the automatic stay will also put an end to debt collector harassment. This means that instead of pestering you with phone calls and threatening letters, creditors will have to go through your attorney if they want to communicate with you.
Speak to an Orland Park Bankruptcy Attorney Today
Mounting debt can bring an onslaught of anxiety and uncertainty about the future. Don’t try to tackle your situation alone. At Lorraine M. Greenberg & Associates, we can help you sort out your finances and develop a strategy for getting out of debt. Speak with an experienced Orland Park bankruptcy attorney to learn more about your options.