What is it like filing for bankruptcy under the United States Bankruptcy Code with a Northlake bankruptcy attorney?There are two main Chapters that individuals will file for under the Bankruptcy Code. The first Chapter is Chapter 7, which is also known as a fresh start bankruptcy Chapter. The second common Chapter is Chapter 13 which is also known as bill reorganization or bill consolidation through a Chapter 13 trustee.
The different types of cases depend on what the individual debtor has going on in their life. For example, if someone does not own a home, and they have a lot of unsecured debt, that being medical bills, credit card bills, personal loans, auto repossession deficiencies, mortgage foreclosure deficiencies and miscellaneous debts from other types of services, that person is more likely going to be filing Chapter 7 bankruptcy and eliminate the debt, as opposed to trying to repay the debt over time.
Someone who wants to repay the debt over time would file a Chapter 13 bankruptcy and that person would typically do that if they have some asset that would be at risk if he filed for Chapter 7. For example, under the state of Illinois, you as an individual are allowed to keep a particular amount of property free and clear from claims of creditors. This is known as your exemption amount. In the state of Illinois, an individual bankruptcy debtor can protect up to $4000 worth of miscellaneous property. An individual in Illinois can also keep up to $15,000 worth of equity in real estate. A person in Illinois can also keep up to $2400 worth of equity in one motor vehicle. A person is also allowed to keep all of their necessary clothing and 100% of their ERISA qualified retirement accounts.
When you meet with your attorney, the attorney will sit down with you and interview you. During the course of the interview, the attorney is going to uncover whether or not you have any significant property that can be taken by a trustee if you were to file a Chapter 7 bankruptcy. If there is significant property that can be taken, the attorney is most likely going to recommend that you file either a Chapter 13 bankruptcy or that you be aware that you might have to surrender certain property in exchange for your fresh start. For many people it’s worth it to get out of debt and give up a particular piece of property knowing that they are going to be free and clear from their debt from this date forward. For other people, they simply do not want to lose any property and would be willing to hire a Chapter 13 bankruptcy lawyer to prevent that risk from happening.