The basics about Chapter 7 bankruptcy

On Behalf of | Jun 7, 2021 | personal bankruptcy |

Many Illinois residents have experienced some difficult times over the course of the past year or more. For some, health problems have been the primary concern. But, for others, it is their financial situations that have deteriorated significantly. Anyone facing financial concerns is likely looking for potential solutions.

Bankruptcy as a solution

One possible solution for some people who are going through challenging financial issues is Chapter 7 bankruptcy – commonly known as “liquidation” bankruptcy. Understanding some of the basics about Chapter 7 bankruptcy may help our readers determine whether or not this path is right for them.

For starters, the essence of why Chapter 7 bankruptcy is known as “liquidation” bankruptcy is because, in most cases, a person’s assets will be sold off and the proceeds of those sales will be applied to satisfy existing debt. However, in practice, most people don’t “lose everything” when they file for bankruptcy protection. Many assets are “exempt” from the bankruptcy process – meaning that the filer gets to keep those assets despite the bankruptcy filing. Many types of debt remaining after the sale of assets is discharged.

Anyone interested in filing for Chapter 7 bankruptcy must meet certain eligibility requirements. But, once the case is filed, all creditor harassment is ordered to cease, and creditors cannot attempt to repossess your property or garnish your wages, for example. There are many different pros and cons to weigh when determining whether or not Chapter 7 bankruptcy is right for you. At our law firm, we work with Illinois residents who are trying to make this decision. For more information, please visit the bankruptcy overview section of our law firm’s website.