When an individual or a business legally declares that they cannot satisfy outstanding debts, the process of doing so is bankruptcy. There are a number of different types of bankruptcy in Deerfield; depending on the type filed the bankrupt will meet with a judge in an effort to develop a payment schedule or to have a legal discharge of most, but not all, debt. When a business declares bankruptcy it will either cease to trade or continue to operate with reduced payments to the creditors.
There are three types of bankruptcies that are available for individuals or couples; Chapter 7 is the most common, Chapter 12 is restricted and is used by farmers or fishermen and Chapter 13 which is rarely used by individuals or married couples.
For businesses, they are limited to two types; Chapter 7 and Chapter 11.
Chapter 7 is commonly used by small business or single proprietorships as well as individuals where the objective is a clean slate. When a business files for Chapter 7 protection, it closes the doors as a result, for the individual who chooses this way, the court will declare that the incurred debts cannot be paid and almost all debts become null and void. There are certain debts that are not forgivable, student loans and federal debt being two of them.
When bankruptcy in Deerfield is declared the debtor must declare that his or her income is not enough to clear the debt. When Chapter 7 is declared, the individual risks losing most assets although the primary residence and primary vehicle are not included unless the home and auto are financed as well and the debt cannot be paid or payments cannot be kept up. When filing Chapter 7 the debtor must list all assets, these are then disposed of by the court; the proceeds are used to pay debts. Most people who take this route have few assets in the first place hence they have little to lose. Once the court declares the individual bankrupt, all credit card debts, doctor’s bills, hospital bills, etc are cleared and the person can start fresh with a clean slate.
Regardless of what Chapter bankruptcy is chosen there is a significant cost associated with it; a reduction in ones credit score is suffered and the fact that bankruptcy was declared may stay on the credit report for years which makes acquiring new assets difficult.
If you are considering filing for bankruptcy in Deerfield then you are invited to contact the law offices of Trepeck Law Group, LLC; Chicago Debt Solutions. You can like them on Facebook.
