Types of Bankruptcy in Dupage County

The purpose of bankruptcy is to allow debtors a way out of very heavy debt with a fresh start when all other options have failed. The most commonly used types of bankruptcy are Chapter 7 and Chapter 13. Deciding to file bankruptcy is only the beginning of the process. You must also decide which type of bankruptcy to file. This will depend on your eligibility to file Chapter 7 and whether Chapter 13 is a better option for you. At the Law Office of Joseph P. Doyle, our experienced Dupage County bankruptcy lawyers can help you with this decision. We offer an initial personal consultation free of charge.

Types of Bankruptcy: Chapter 7 or Chapter 13

Individuals, partnerships, and corporations can file Chapter 7 liquidation. In this type of bankruptcy, the debtor surrenders all non-exempt assets to the court. The assets are sold, and the proceeds are used to pay creditors. The debtor must qualify to file Chapter 7 based on income or disposable income (income less certain necessary expenses). The end result is the discharge of all eligible unsecured debt.

Only individuals can file Chapter 13 reorganization. The debtor makes monthly payments on a court-approved plan for 3 to 5 years to pay off a portion of his or her debt. As in Chapter 7, the end result is the discharge of all eligible unsecured debt. There are various factors to consider in deciding whether to file Chapter 7 or Chapter 13. It is best to seek the advice of experienced bankruptcy legal professionals.

Other Types of Bankruptcy

The U.S. Bankruptcy Code provides several different chapters under which debtors can file - Chapter 7, Chapter 9, Chapter 11, Chapter 12, and Chapter 13. Chapter 9 is designed to allow municipalities to file bankruptcy. Chapter 11 is a reorganization used mostly by businesses that want to continue operations while paying their creditors. Chapter 12 is titled "Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income." This type of bankruptcy has clearly limited application for farmers and fishermen.

For qualified professional assistance with your bankruptcy needs, contact our Dupage County bankruptcy law firm.