Deciding Between Chapter 7 and Chapter 13

Both Chapter 7 and Chapter 13 bankruptcy can be used by individuals to pay off their debts. However, Chapter 13 bankruptcy has a number of advantages over Chapter 7.

Under Chapter 7 bankruptcy, the most common type of bankruptcy use by individuals, all of your assets except for a few protected assets will be collected by a trustee and sold for cash. The sale of your assets will go towards paying off your debts. Property that can be used to settle your debts includes your home and any vehicles, but personal items as wedding rings may be excluded.

Under Chapter 13 bankruptcy, assets are not sold off and liquidated in order to pay debts. Rather, people who have a steady income can use Chapter 13 bankruptcy to reorganize their debts and set up a repayment plan that usually takes 3 to 5 years to pay off that person's creditors. During a confirmation hearing, a bankruptcy judge will either approve or disapprove the plan that you and your bankruptcy attorney come up with.

Thinking about moving forward with bankruptcy? A Chicago bankruptcy attorney can help you determine which form of bankruptcy might be best for your situation. Contact Bizar & Doyle, LLC now to learn more about the different types of consumer bankruptcy.