There are no monthly payment requirements in a chapter 7. Chapter 7 is a case in which a person appointed by the Court meets with the Debtor and decides if there are assets to sell in order to distribute funds to creditors. A Debtor’s job is to be open and honest, disclose everything required and cooperate with the trustee. If everything goes as planned the case will be typically over in a few months.
Chapter 13 is significantly different and lasts three to five years, in contrast to the three to four months of a chapter 7. In a chapter 13 a Debtor will make monthly payments throughout the entire case, typically sixty months. Trustees in chapter 13 do not sell off assets, instead you make payments to ensure your creditor get at least the amount that the assets are worth.
Choosing the right chapter to file is complicated as there are many factors to consider. The best option n is to talk to an attorney because sometimes a risk is worth it, and sometimes it’s just not. Making quick decisions on partial information can have detrimental effects. Always carefully review the options, benefits and risks.
What Is A Chapter 11 Bankruptcy, And Who Is This For?
Chapter 11 bankruptcy is a very complex litigation process to help individuals with more than a $1,257,850 in secured debt, $419,275 in unsecured debt, or for any corporation that needs to liquidate assets or restructure. Sometimes corporations would use a chapter 11 to liquidate as opposed to doing a chapter 7 as this would provide more control over the process. Because of the complexity of a chapter 11, they are more expensive than chapter 7. However, the person in charge of the liquidating would be what’s called the debtor in possession, typically the company’s officer. They gain control over how the assets get distributed and any relevant negations with creditors.
Chapter 11 is an arduous process, and it takes a significant amount of time to conclude a case. There’s also a small business subset of chapter 11 that’s supposed move on a faster track; try to get relief less expensively and faster because a chapter 11 could get pricey depending on the negotiations with creditors. The small business has two subsets; one’s relatively new, making the process more streamlined.
What Debts Are Dischargeable In Chapter 11?
In chapter 11, you can either do it as the liquidation or do it as a restructuring. Either way, anything not paid to unsecured creditors would be discharged (or subject to the treatment in the approved plan). All debt has to be treated in the plan and the treatment is binding on creditors once the plan is approved.
For more information on Bankruptcy Law in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.
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