What Are The Differences Between Chapter 7 And Chapter 13 Bankruptcy?
The major difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy is that Chapter 7 bankruptcy eliminates debt, while Chapter 13 bankruptcy requires the debtor to pay back all or a portion of their debt. Each chapter of the bankruptcy code has its purpose. If a debtor is overburdened with debt and their assets do not exceed the allowed exemptions, then Chapter 7 bankruptcy would be best. If a debtor is trying to save their house from foreclosure or save their car from being repossessed, then Chapter 13 bankruptcy would be best. Chapter 13 bankruptcy can also be a good option for someone who makes a significant amount of money but is struggling to make the monthly minimum payments, or is making the payments but is not significantly reducing the amount of the debt owed because only a small portion of the monthly payment is going to the payment of the principal amount owed. Chapter 13 allows them to pay their unsecured debt interest-free, usually at a lower monthly amount, within three to five years.
How Do I Know Which Bankruptcy Is Going To Be Right For Me?
The best way to determine which chapter of the bankruptcy code is the best for a particular set of circumstances is by consulting with an experienced bankruptcy attorney who can review the pros and cons of each type of bankruptcy.
What Can I Expect To Happen Once I File For Bankruptcy?
Once a bankruptcy case is filed, an automatic stay will go into effect, which means creditors will stop calling or pursuing legal action. In addition, a meeting of creditors (341 hearing) will be scheduled. The debtor and their attorney will be required to attend this meeting, and an order of discharge will be issued approximately 60 days later.
How Long After Filing For Bankruptcy Will Creditors Stop Calling?
Creditors are required to stop calling immediately upon the filing of bankruptcy. However, they may not receive notice of the bankruptcy filing right away. For this reason, someone who has filed for bankruptcy should keep their court case number on hand to provide to any creditor who calls. If a creditor continues to call or harass a debtor after they have provided their bankruptcy case information, then the creditor is in violation of the law and the debtor should call their bankruptcy attorney so that the appropriate action can be taken against the creditor who is violating the automatic stay order.
When Must Someone Complete The Pre-Bankruptcy Credit Counseling Courses?
The pre-bankruptcy credit counseling course must be completed no later than the date of the bankruptcy filing. Failure to take this class prior to filing for bankruptcy will result in the dismissal of the case.
When Will I Have The Meeting Of Creditors (341 Hearing) In Chapter 7 Bankruptcy?
The meeting of creditors (341 hearing) will be held approximately 30 to 45 days after the case has been filed. The debtor must bring valid identification, such as a driver’s license or state ID card. They will also need to bring their original Social Security card and should expect to be asked the same types of questions that they were asked during their initial meeting with their attorneys, such as those regarding income, assets, expenses, and pre-filing transactions. The bankruptcy trustee will want to confirm that all of the information contained in the bankruptcy paperwork that was filed with the court is correct.
For more information on Chapter 7 Vs. Chapter 13 Bankruptcy In Illinois, a free 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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