Illinois residents who are looking into bankruptcy options in order to relieve debts have two primary options. Chapter 13 and Chapter 7 bankruptcy both have their unique benefits, allowing different people in different situations to find use in them.
The United States Courts examines Chapter 7 bankruptcy, which tends to be a better option for people who have no way to repay their debts. This option will allow for the person filing to liquidate their assets in order to pay back certain debts. Some, such as school debt, is not able to be paid off. However, most debts like credit card debt and medical bills can be. Through liquidation, the debt can be forgiven much faster. However, Chapter 7 bankruptcy will stay on a person’s record for longer and they will usually not have a say in what items are liquidated.
FindLaw defines Chapter 13 bankruptcy as reorganization bankruptcy. This type of bankruptcy can be used by individuals who are able to create a repayment plan. In order to pay back debts, they work together to create a plan they can stick to that allows them to pay off their debt in increments over a certain period of time. While this allows a person to avoid liquidating assets and will remain on their record for a shorter period of time, it is also less forgiving. The debt must absolutely be repaid; there is no third option after Chapter 13 bankruptcy.
Which option works best depends on a person’s unique situation. Because of that, it is beneficial to carefully research both types of bankruptcy to see which holds a greater benefit.