Debt Relief • Chapter 7 • Chapter 13
Bankruptcy is federal law, but the right choice depends heavily on the person’s income, assets, debts, mortgage status and Illinois exemptions. The goal of this page is to explain the framework—not teach someone to file a bankruptcy case without individualized advice.
What Is the Difference Between Chapter 7 and Chapter 13?
Chapter 7 is generally a liquidation process in which qualifying individual debtors may receive a discharge of many unsecured debts, subject to eligibility, exemptions and exceptions to discharge.
Chapter 13 is designed for individuals with regular income and generally involves a court-approved repayment plan lasting three to five years. It can be useful when someone needs time to address arrears or protect property while making required payments.
What Is the Automatic Stay?
Filing a bankruptcy petition generally creates an automatic stay that stops most collection actions, including many lawsuits, garnishments and collection contacts. The Bankruptcy Code contains exceptions, and repeat filings or particular proceedings can affect how the stay operates.
Can Bankruptcy Eliminate Every Debt?
No. A bankruptcy discharge eliminates personal liability for qualifying debts, but some debts are excepted from discharge or require special treatment. Domestic-support obligations, certain taxes, many student loans and other categories can survive bankruptcy.
A valid lien on property can also remain even when personal liability for a debt is discharged.
Attorney Wendi can review your debts, income, assets, lawsuits, garnishments and property before you decide whether Chapter 7, Chapter 13 or another approach fits.
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Can Someone Keep a House or Car?
Possibly. The answer depends on equity, available exemptions, payment status, loan terms and the bankruptcy chapter. Filing does not automatically eliminate a mortgage or vehicle lien.
Can Property Transfers Before Bankruptcy Affect the Case?
Transfers, gifts or concealment of property before bankruptcy can create serious disclosure and legal issues and may affect the case. The significance of a transaction depends on its timing, purpose, value and other facts.
Bankruptcy & Debt Relief in Belvidere and Northern Illinois
The Law Offices of Wendi J. Wade assists clients with bankruptcy and debt-relief questions from its Belvidere office.
Learn more about the firm’s Bankruptcy services.