PEORIA BANKRUPTCY LAWYERS
Usually you will only need to attend one hearing, a meeting with a court-appointed trustee who will audit your case. Our legal expertise will ensure the best outcome for your bankruptcy filing, and our compassionate team will ensure you understand all aspects of the process.
At Smith & Weer, Bankruptcy Attorney in Peoria, Illinois, we offer free consultations on Chapter 7 and 11 bankruptcy. At no charge to you, we’ll provide you with:
- Analysis of Your Financial Situation
- Understanding of Your Legal Options
- Preliminary Plan for Your Highest Benefit
- Alternatives for Avoiding Bankruptcy
- Preparation to Start Immediately If You Decide
Chapter 7 Bankruptcy
There are three possible bankruptcies that may apply to the needs of an individual debtor. Those are Chapter 7, Chapter 11, and Chapter 13. A Chapter 7 is commonly referred to as a straight bankruptcy, or liquidation bankruptcy. A Chapter 7 bankruptcy does not require a monthly repayment plan as do a Chapter 11 or a Chapter 13. Normally, a Chapter 7 can be begun and ended in a time span of approximately three months from the date of filing assuming there are no problems. In a Chapter 7, a debtor may retain his or her house if it is being purchased with a mortgage loan. The same is true of a car loan; if the debtor reaffirms either a house mortgage loan or a car loan, he or she will be permitted to retain the house or car so long as they are current on their payment and the debtor executes a reaffirmation agreement. Much like its name suggests, an agreement that reaffirms a debt says, in effect, “even though I filed bankruptcy, I agree to continue paying you, the creditor, in exchange for allowing me, the debtor, to retain the home or the car.” While a Chapter 7 may be less onerous than a Chapter 11 or Chapter 13 because it does not require a repayment plan, the disadvantage of a Chapter 7 is that is remains on a debtor’s credit report for ten years; a Chapter 13 bankruptcy remains on a credit report for only seven years. Some potential lenders of a debtor who filed bankruptcy may also view a Chapter 13 more favorably because the debtor made an attempt to repay a portion of her debt.
Chapter 13 Bankruptcy
As mentioned, a Chapter 13 requires a repayment plan that must be approved by the court by confirmation. A Chapter 13 is required to last a minimum of three years, and is allowed to continue, at most, for a period of five years. The purpose of a Chapter 13 is to permit the debtor to reorganize his financial affairs. In addition, there are many valid reasons for filing a Chapter 13 bankruptcy. A Chapter 13 is the only way a debtor may keep her home if she has fallen behind on mortgage payments in the recent past. The Chapter 13 allows the debtor to catch-up the mortgage by paying off the mortgage arrears at no interest during the life of the plan. Another reason for filing a Chapter 13 is if a debtor is behind on his car payments or if the car has actually been repossessed. With a Chapter 13, a debtor can catch-up his car payments much like catching-up a mortgage loan, and with a Chapter 13, a debtor can recover a car that has been repossessed if he acts quickly. Other reasons exist for filing a Chapter 13. If a debtor makes more than the medium income for his or her area where they live, a debtor will be required to remain in a Chapter 13 for a period of five years. If a debtor has filed a Chapter 7 within eight years, the only type of bankruptcy that can be filed is a Chapter 13 if the debtor feels it absolutely necessary to again seek the relief of a bankruptcy. As noted above, a Chapter 13 remains on an individual’s credit report for only seven years, while a Chapter 7 remains on a person’s credit report for ten years; that could mean substantial savings over a period of time if someone is able to obtain a loan for a lower interest rate because she filed a Chapter 13 instead of a Chapter 7.
How can we help you? To determine which type of bankruptcy is best for you, contact us for a free consultation. We’ll answer all your questions, and explain your options. There is no obligation.
WHAT OUR CLIENTS SAY
Avoiding foreclosure took time and effort but it was worth it…we saved our home!
Smith and Weer saved our home and saved our family. We couldn’t be more grateful.
There was no way we could negotiate with our creditor, or understand the complexities of our situation. Smith and Weer took care of all of this for us, and saved our home.