When a person decides to file for bankruptcy protection, there are several different options to bankruptcy available. The most commonly filed form of bankruptcy is a Chapter 7 or a liquidation filing. This is generally the best option for consumers with limited assets, less than above-average income and an abundance of dischargeable debt such as credit cards and medical bills. Under this type of bankruptcy, a consumer must surrender their non-exempt assets like homes and cars. A bankruptcy lawyer in Marion Il should be consulted to learn more about what assets can be kept and those that are lost.
If your income is higher than the mean income level for your area or if you have assets that you do not want to surrender, then filing a Chapter 13 bankruptcy may be your best–possibly only–option. This type of bankruptcy is known as a reorganization of debt. Like a liquidation bankruptcy, a Chapter 13 bankruptcy immediately halts any repossession or foreclosure activity while the bankruptcy is active. This means if your bank is threatening to seize your home or if your car is about to be repossessed, the moment your bankruptcy lawyer in Marion, Il files, such actions stop. It is worth noting that a mortgage lender in the process of foreclosing on your home can petition the courts with what is known as a Motion for a Relief from Automatic Stay. This means that the lender is asking the trustee to acknowledge there is no equity in your home and therefore no reason to liquidate it and to release your home from the bankruptcy protection. Not all lenders exercise this, and if they do, your attorney will be able to respond to the petition.
The reorganization bankruptcy sets up a plan where you agree to pay a portion of your debt over a period of time, generally five years. How much you pay is based upon your income. The upside is you will be able to keep the things you own like your vehicles and homes, but whatever you owe on them doesn’t go away. So, if you are upside down in your mortgage, you will continue to be underwater in your home. It is important to compare your options by talking to a bankruptcy lawyer in Marion Il.
Back in 2005, a change was made to the U.S. Bankruptcy Code which made it a requirement for people filing for bankruptcy protections must also complete a credit counseling program within 6 months of filing for bankruptcy. The cost for taking this online course will set you back around $30 to $50, but you can ask the court to waive the fee if you do not have the money.
Finding a qualified bankruptcy lawyer? Get in touch with Law Office of Bradley P. Olson, who will review your unique situation and guide you through your bankruptcy protection in Marion, IL.
