Consumer Bankruptcy Fundamentals
It really is terribly stressful for families that have been struggling with debt and past due bills to arrive at the understanding that they might be in a financial condition which ıs not going to simply fix itself. While this type of situation can seem quite hopeless, there is a way out that the law offers that will help individuals get out from underneath the burden connected with overwhelming debt. In my Chicago bankruptcy law office, I help families to determine whether the choice to seek bankruptcy relief is appropriate considering their particular problems.
A lot of people believe changes to the bankruptcy law that were enacted in 2005 made it basically impossible for people to meet the requirements for debt reduction by means of bankruptcy. While the 2005 legislation, the Bankruptcy Abuse Prevention and Consumer Protection Act or BAPCPA, makes it more complicated, the fact is that most consumers who need to file for personal bankruptcy can certainly still do so.
So just what is bankruptcy? Fundamentally, bankruptcy can be described as a legal proceeding that enables folks with more debt than they can pay to start over – financially speaking. This is why bankruptcy is also called a “fresh financial start.” Once you file for bankruptcy, collectors must immediately stop attempting to recover the debt that you owe. Based on the chapter somebody files under, the majority of unsecured debt can be cleared – doing away with the obligation to pay them. Unsecured debts are those without collateral, including credit cards. Secured debts, which include car loans and home mortgages, must be repaid if the debtor desires to maintain the property. However, should they be behind on installment payments, filing for bankruptcy will be able to stop a repossession or foreclosure by allowing for the past due sum to be repaid over time as the regular payments continue.
While there are different local rules and state laws that come into play in bankruptcy proceedings, the key source of bankruptcy law is Title 11 of the U.S. Code. As bankruptcy is federal law, bankruptcy cases are filed in the federal court for the district in which the debtor lives. For example, since I’m a Chicago bankruptcy attorney serving Chicago area people, my clients’ bankruptcies are filed in the United States Bankruptcy Court for the Northern District of Illinois.
One can find four different varieties of bankruptcy cases under Title 11: Chapter 7, Chapter 11, Chapter 12, and Chapter 13. Of these 4, Chapter 7 and Chapter 13 are the most common and most helpful to individuals. Chapter 7 is known as straight bankruptcy or a liquidation and calls for individuals to give up possessions to repay their creditors. Because of the numerous state and federal exemptions that provide protection to certain property from liquidation, the majority of people who file for Chapter 7 bankruptcy never lose any property whatsoever.
Chapter 13 is also known as a reorganization. Chapter 13 lets men and women to repay all or some portion of their debt over time by means of future earnings. No property is liquidated under a Chapter 13.
Even though this brief summary offers a simple overview, it’s not legal advice. Bankruptcy law is complicated and consumers contemplating bankruptcy ought to speak with an attorney in their jurisdiction. Should you live in Illinois and therefore are seeking a Chicago Bankruptcy Attorney, please consider The Law Office of John C. Kunes, P.C.
Learn more about Chicago Bankruptcy. Stop by Chicago Bankruptcy Lawyer John Kunes’s site where you can find out all about Chapter 7 and Chapter 13 bankruptcy and what bankruptcy could do for you.