Bankruptcy 101: Learn the Basics

Bankruptcy isn’t an area of the law that the average person has much experience with. Bankruptcy law is notoriously complex, and some of the intricacies depend on the particular jurisdiction you file in. For these reasons, a DIY approach to bankruptcy is strongly discouraged. Get in touch with a bankruptcy attorney who can answer all of your questions, review your unique financial situation, and walk you through each step of the process.

Overview of Bankruptcy

Bankruptcy is a legal proceeding. If your bankruptcy is approved, your dischargeable debts will be eliminated. This allows you to get a fresh financial start in life. Dischargeable debts include credit card debt and medical bills. Non-dischargeable debts include child support and alimony.

Types of Bankruptcy

There are several types of bankruptcy. The most common types filed by people, rather than businesses, are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy is ideal for people with primarily dischargeable debt and few substantial assets. During this type of bankruptcy, the court-appointed trustee will examine your assets. Some of them may be sold to repay your creditors, but you can use exemptions to protect certain assets like your vehicle. Chapter 13 bankruptcy is different. Debtors go through trustee-supervised repayment plans that last three to five years. During this time, they live on a strict budget and pay the trustee a set amount of money each month. The money goes to repay the creditors. At the end of the repayment period, the remaining dischargeable debts are eliminated and the debtors get a fresh start.

Reasons for Bankruptcy

Only you and your bankruptcy attorney can determine whether filing is the right choice for you. But for many people, filing for bankruptcy is the opportunity to work toward long-term financial stability. People often file for bankruptcy after experiencing significant financial difficulties because of divorce, job loss, a major illness, or the death of the other wage earner in the household.

Cutler & Associates, Ltd. is the bankruptcy law firm of choice for families throughout the Chicagoland area. Our attorneys in Schaumburg, Skokie, and Aurora can help you determine if bankruptcy is the right solution to your financial difficulties. Call (847) 961-4572, and we’ll get you on the path toward financial freedom.