When a person or business is no longer able to pay their outstanding debt they can legally declare themselves to be bankrupt. Depending on the type of bankruptcy in Naperville that is chosen, the bankrupt will meet with a judge to either have most of the existing debt discharged or a repayment plan will be agreed upon. Basically the same thing holds true for a business, the business can cease trading and liquidate or it can continue to operate under a court approved rehabilitation plan.
When an individual or couple finds that they must declare bankruptcy they are given three choices. The most often used form is Chapter 7, Chapter 12 is only available to farmers and fishermen and Chapter 13.
When a business declares itself to be bankrupt it has two common options; Chapter 7 and Chapter 11. There is a form of bankruptcy that a business can use to clear international debt, this is Chapter 15 but it is uncommon. An agency of the state which means a town or city can also declare bankruptcy, this is Chapter 9.
Let’s discuss the more common forms of personal bankruptcy in Naperville.
Chapter 7: This is by far the most commonly used form of bankruptcy in the country. Chapter 7 is applicable to both individuals and small companies; it is used when the individual or the business wants a clean slate. For the individual this means that the courts declare that you are unable to pay your debts and after disposing of your assets which are used for partial repayment of the debt, the debts are then declared void. There are a couple of debts, student loans being one of them that must be repaid in full.
Chapter 13: This is a common form of bankruptcy in Naperville that is declared by an individual who has a steady income and has assets that he or she wishes to protect. In this type of bankruptcy the debtor is obliged to develop a restructuring program that the court will agree with. This restructuring must take place within five years at the outside but usually four years is more acceptable. The objective of the restructuring plan, which also reduces the debt to zero interest, is to take the total debt plus living expenses and deduct them from the person’s income. A court appointed trustee is then held responsible for taking the amount available for debt repayment and paying this monthly to the creditors.
All forms of bankruptcy are a costly way of gaining debt relief. The bankrupt will be hobbled for some years without access to credit, this makes purchasing a car or home very difficult.
If you are facing bankruptcy in Naperville you will need the advice of a good legal team who understand all the implications of the various bankruptcy plans available. You are invited to discuss the options with Chicago Debt Solutions. To see their business reviews visit BBB page.
