Chicago Bankruptcy Lawyer Can Help Discharge Your Debts

Chapter 7 and Chapter 13 bankruptcy both provide relief from debt. However, there are several differences in the two types of bankruptcy. Chapter 7 is the simplest form of bankruptcy and allows you to discharge most types of unsecured debt in about four months. Chapter 13 is often known as "reorganization" or "wage earner" bankruptcy. It allows you to create a repayment plan to pay back some or all of your debt.

North & Sedgwick Law is here to answer your questions about Chapter 7 and Chapter 13 bankruptcy. The firm's bankruptcy lawyer, Paul Camarena, serves individuals, families and businesses in Chicago and throughout the surrounding areas of Illinois.

What Is The Difference Between Chapter 7 And Chapter 13?

The following chart shows some of the main differences:

Chapter 7 Chapter 13
Eligibility To qualify, you must take a means test.You do not need to take a means test.
Automatic stay Includes automatic stay to protect you from creditor actions.Includes automatic stay to protect you from creditor actions.
Bankruptcy exemptions Some, but not all, of your assets are protected from creditors. If you have significant assets that aren't protected by bankruptcy exemptions, the trustee could sell them to pay your debts.All of your assets are protected.
Unsecured debts Most unsecured debts are discharged 100 percent.Unsecured debts are reduced to an amount you can afford to pay over a three- to five-year period.
Secured debts You have to pay back secured debts or you will lose the asset.You have to pay back secured debts. However, you can take three to five years to do so.
Homeowners Unless you are current on your mortgage, you could lose your home.You can put arrearages in your payment plan and pay them off over three to five years. In addition, you may be able to strip the liens from second mortgages.

Weigh Your Bankruptcy Options With A Skilled Cook County Attorney

For more information, request a free, no-obligation consultation by calling North & Sedgwick Law at 312-878-8429. You can also contact the firm via email.

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†The firm is a debt relief agency and helps people file for bankruptcy relief under the Bankruptcy Code.