Bankruptcy Law – Personal Bankruptcy

Bankruptcy Law – Personal Bankruptcy

Most people are aware of the two most common forms of personal bankruptcy being chapter 7 and chapter 13. Are there any other bankruptcy options to choose from? There is a chapter 11 option which can be used by consumers; however, it is usually the choice of corporations that are looking to reorganize debts. bankruptcy law attorneyThere is also chapter 12, but that chapter pertains to the family farmer. There are not too many family farmer cases being brought in the Northern District of Illinois. Thus, there are really only two good options when it comes to seeking bankruptcy relief. I will illustrate the basics of each chapter below.

Chapter 7 is by far the most common form of bankruptcy relief. There were over 1.4 million bankruptcy cases filed in the United States this past fiscal year and over 70% of those cases were the chapter 7 variety. Why are there so many Chapter 7 filings? The answer to that question is simple. Chapter 7 is for the honest debtor who does not have much in the way of assets yet has a lot of unsecured debt. It is known as liquidation bankruptcy although in most cases, there is nothing for the bankruptcy trustee to liquidate. The debtor typically receives a discharge and keeps all of his exempt property. For information of filing Chapter 7, seek the advice of a chapter 7 bankruptcy attorney.

Chapter 13 is the less used yet very helpful chapter under the bankruptcy code. Chapter 13 is a reorganization of either all or a portion of one’s debts over a period of three to five years. The debtor makes a monthly payment to a Chapter 13 Trustee who disburses amounts to creditors in accordance with the bankruptcy code. Creditors have an opportunity to file a proof of claim to partake in the payment plan. If creditors do not file a proof of claim, then they may not receive a payment at all. Secured creditors still have rights whether or not a claim is filed, but they should seed bankruptcy advice. They can bring a motion before the court to seek recovery of their asset should payments not be forthcoming.chapter 13 lawyer

In the Chicago area, there are three Chapter 13 bankruptcy trustees. Each Trustee is different in terms of office procedures and policies. It is best to get familiar with the different Trustees if you are going to practice Chapter 13 bankruptcy law. That is the best advice that I can give if you are thinking of becoming a Chicago bankruptcy lawyer. Once you are aware of how the system works, you will then be in a position to give great advice. In my opinion, it takes years to become truly versant in the bankruptcy arena. Those attorneys that file a case here and there are really at a huge disadvantage. The marketplace has seen great changes since bankruptcy reform. It is only the ones that practice diligently that can hope to handle the tough caseload.

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