Does The Kind Of Debt I Have Determine Whether Or Not I Should File For Bankruptcy?
Not all types of debts are dischargeable in a Chapter 7 bankruptcy. Some debt that is not dischargeable in a Chapter 7 bankruptcy is dischargeable in a Chapter 13 bankruptcy. Some debts need to be paid in full in a Chapter 13 bankruptcy. Only an experienced bankruptcy attorney can review the type of debt that you have to determine if a bankruptcy is appropriate and which chapter of the bankruptcy code would help you the most.
How Do I Know If Debt Is Serious Enough For A Bankruptcy?
Each person’s situation is different. Whether or not your debt is serious depends not only on the amount and type of debt that you have but also on your income and expenses. An amount of debt that may be affordable to one person may be impossible for another person to pay.
What Type Of Debt Is Typically Dischargeable In A Chapter 7 Or A Chapter 13 Bankruptcy?
Debts such as credit cards, personal loans, payday loans, deficiencies as a result of automobile repossession, deficiencies as a result of a foreclosure, medical bills, and some taxes are dischargeable in a Chapter 7 bankruptcy. All debt that is dischargeable in a Chapter 7 bankruptcy is also dischargeable in a Chapter 13 bankruptcy. However, some debts that are not dischargeable in a Chapter 7, such as parking tickets, can be discharged in a Chapter 13 bankruptcy.
What Types Of Debt Are Not Forgiven In Any Type of Bankruptcy?
The most common types of debts that are not dischargeable in any bankruptcy are domestic support obligations, taxes that were incurred in the three years prior to the filing of the bankruptcy, and student loans. Other types of debt are debts incurred by fraud and debts incurred due to willful and malicious injury.
What Will I Be Able To Keep After A Chapter 7 Or A Chapter 13 Bankruptcy?
A Chapter 7 bankruptcy is a fresh start. It will be impossible for you to have a fresh start, if you are left with no possessions. Therefore, you are allowed to keep certain assets, such as your furniture, house, and car, as long as there is not a significant amount of equity in those assets. Other assets, such as your pension, are 100% exempt and cannot be touched. An experienced bankruptcy attorney can review your assets and advise as to whether they will be protected in a Chapter 7 bankruptcy. If you have a significant amount of assets you can file a Chapter 13 bankruptcy, which is a repayment plan. In a Chapter 13 bankruptcy, you do not lose your assets because you are paying back a portion or all of your debt.
What Is The Means Test In a Chapter 7 Bankruptcy?
The means test is a calculation that determines whether you qualify for a Chapter 7 bankruptcy. It is based on how much income there is in your household and also on the size of your household. If you do not qualify for Chapter 7 bankruptcy under the means test and choose to file a Chapter 13 bankruptcy, the means test will determine the minimum amount that must be repaid to your unsecured creditors.
What Is The 341 Meeting Of Creditors?
The 341 meeting of creditors is typically held about four weeks after the filing of a bankruptcy petition. In both Chapter 7 and Chapter 13 bankruptcy, you will be required to appear. You have to show a valid identification, such as your driver’s license or state ID, and you also have to show your social security card. The trustee wants to confirm your identity and make sure that you are the debtor. The trustee will question you regarding your assets, liabilities, income, and expenses. Your attorney will be there with you.
Your creditors also have the right to appear and ask you questions, although it is very rare that the creditors will actually show up. In a Chapter 13 bankruptcy, it’s the same situation, but the 341 meeting takes a little longer because the Chapter 13 trustee asks a few more questions, as he or she needs to confirm that you will actually be able to make the proposed bankruptcy payments.
Can I Even Afford To File A Bankruptcy?
A Chapter 7 bankruptcy is much cheaper than paying back your debts. A Chapter 13 bankruptcy can help you by consolidating your debts into an affordable monthly payment and can save you money by allowing you to pay a portion of your debt interest-free. I understand that most clients who come into my office have little disposable income. That is why I offer reasonable fees and also provide a payment plan that the client can afford. For a Chapter 13 bankruptcy, the legal fee can be rolled into the plan.
For more information on Kinds Of Debts & Bankruptcy In Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 509-8989 today.
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