Bills can add up over time, even when you think you are staying on top of them. Add unemployment, a medical crisis or family emergency and you can find yourself facing bankruptcy in a short period of time. Once you have made this decision, you need to see if a chapter 7 in Chicago will be of more benefit to you or if you should file for Chapter 13. Many find that Chapter 7 is the best choice for a number of reasons. Here are some of the benefits you can expect if you choose chapter 7 in Chicago.
* When you choose to file for Chapter 7, you won’t be required to pay back most unsecured debt, debts not backed by collateral. There are a few exceptions to this rule, such as back taxes and student loans, but all other unsecured debts will be eliminated or totally discharged. In contrast, with a Chapter 13 bankruptcy, you must pay on all debt, secured and unsecured for three to five years. Once this time period is up, the remaining unsecured debt may be discharged.
* In most Chapter 7 cases, you will be allowed to keep your assets. There are exceptions to this, such as rules concerning non-exempt property. You’ll need to discuss with your attorney what is classified as exempt property and what is non-exempt when determining if Chapter 7 is the better option for you.
* Chapter 7 bankruptcy rules don’t require a monthly payment or documentation. When you choose to file for Chapter 13, you are required to submit your disposable income to the court each month, where it will then be distributed to creditors. Those who are self employed must submit monthly profit and loss statements, proving income. This must continue the entire period you are paying back the debt, which many find to be a hassle. In Chapter 7 cases, this payment and documentation won’t be required.
Those who choose Chapter 7 bankruptcy typically find their credit score increases within a 12 month period after the case is finalized. In fact, most who maintain a good payment record after the case is finalized find they can qualify for an FHA mortgage loan within two years. With a Chapter 13 case, you may find you can’t qualify for a loan for the entire repayment period.
