DuPage County Bankruptcy Lawyers
Wheaton Attorneys for Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure, and Debt Relief
To many, declaring bankruptcy seems like a last resort that only those desperate to ruin their future credit will attempt. However, bankruptcy can actually provide you and your family with much-needed debt relief and repayment assistance. According to the Federal Bankruptcy Code, bankruptcy is a court proceeding that provides help to those with unmanageable debt loads. At Davi Law Group, LLC, our experienced bankruptcy attorneys can assist you in creating a fresh start and prepare for a better tomorrow.
What is Secured or Unsecured Debt?
In general, debts are classified as secured or unsecured. A secured debt has property that serves as collateral; therefore, if the payments on the debt are not made, the lender can reclaim the property. The primary examples of secured debt are those associated with homes and automobiles.
The vast majority of debt, however, is considered to be unsecured. Common types of unsecured debt include credit card balances, bills for medical care, and utility bills. When a debtor owes an unsecured debt, generally the lender must file a lawsuit and obtain a judgment in order to seize any assets.
Chapter 7 and Chapter 13 Bankruptcy
If you choose to file for bankruptcy, it is important to know the different options available to you. Chapter 7 bankruptcy, for example, allows a person to liquidate his or her debts. An automatic stay goes into effect where collection activity is halted. Chapter 7 allows for the retention of some property and personal items. This type of bankruptcy is generally preferred, as it clears most debts without lengthy repayment requirements.
Chapter 13 is designed for those with steady income, yet very significant debt. The process consolidates and restructures the debt into a three to five year repayment plan with more manageable monthly payments. Most homeowners are able to retain their home by paying past due amounts under the new payment arrangement.
A New Financial Start
Following a Chapter 7 bankruptcy you will have the benefit of starting along a path to economic improvement. As you begin generating income, you will no longer be faced with massive debt and accumulating interest. It is best to start a savings plan. You may start modestly by putting a small amount towards savings each month. Over time, you can enjoy the feeling of having savings to rely on if you need it rather than going into debt.
Beginning to Rebuild Credit
You will want to consider ways to wisely rebuild your credit. Making purchases using a secured credit card and promptly paying the balance is one option. Automobile lenders will usually extend you a car loan if you have documented income; however, it is important to shop around to find the most reasonable interest rate that you can.